Calculated Risk
Thanks!
Curtis D. Harris, BS, CGREA, REB
Bachelor of Science in Real Estate, CSULA
State Certified General Appraiser
Real Estate Broker
ASTM E-2018 Commercial Real Estate Inspector
HUD 203k Consultant
HUD/FHA Real Estate Appraiser/Reviewer
FannieMae REO ConsultantCTAC LEED Certification
The Harris Company, Forensic Appraisers and Real Estate Consultants
*PIRS/Harris Company and the Science of Real Estate-Partners*630 North Sepulveda Boulevard, Suite 9A, Number 702
El Segundo, CA. 90245
310-337-1973 Office
310-251-3959 CellWebSite: http://www.harriscompanyrec.com Resume: http://www.harriscompanyrec.com/CURRICULUMVITAENAME2011a.pdfCommercial Appraiser Blog: http://harriscompanyrec.com/blog/ We Make a Simple Pledge to
Communicate, in a timely fashion, each appraisal, analysis, and opinion without bias or partiality
Abstain from behavior that is deleterious to our clients, the appraisal profession, and the public
Hold paramount the confidential nature of the appraiser/consultant - client relationship
and
Comply with the requirements of the Uniform Standards of Professional Appraisal Practice and the
Code of Professional Ethics of the National Society of Real Estate Appraisers
IT'S THE LAW- Statement 7: Prohibition Against Discrimination
State agencies should be aware that Title XI and the Agencies' regulations prohibit federally regulated financial institutions from excluding appraisers from consideration for an assignment by virtue of their membership, or lack of membership, in any appraisal organization. Federally regulated financial institutions should review the qualifications of appraisers to ensure that they are qualified for the assignment for which they are being considered. It is unacceptable to assume that an appraiser is qualified solely due to membership in, or designation from, an appraisal organization, or the lack thereof. The Agencies have determined that financial institutions' appraisal policies should not favor appraisers from one or more organizations or exclude individuals based on their lack of such membership. If a State agency learns that a certified or licensed appraiser allegedly has been a victim of such discrimination, the State agency should inform the Agency which has regulatory authority over the involved financial institution. INCLUDING THE APPRAISAL INSTITUTE-MAICONFIDENTIALITY/PRIVILEGE NOTICE: This transmission and any attachments are intended solely for the addressee. The information contained in this transmission is confidential in nature and protected from further use or disclosure under U.S. Pub. L. 106-102, 113 U.S. Stat. 1338 (1999), and may be subject to consultant/appraiser-client or other legal privilege. Your use or disclosure of this information for any purpose other than that intended by its transmittal is strictly prohibited and may subject you to fines and/or penalties under federal and state law. If you are not the intended recipient of this transmission, please destroy all copies received and confirm destruction to the sender via return transmittal
From: [email protected] [mailto:[email protected]] On Behalf Of Calculated Risk
Sent: Thursday, June 28, 2012 9:33 AM
To: [email protected]
Subject: Calculated Risk
Calculated Risk
Kansas City Fed: Growth in Regional Manufacturing Activity Slowed in June Weekly Initial Unemployment Claims mostly unchanged Tomorrow: Unemployment Claims, Q1 GDP (third estimate) Number of Cities with Increasing House Prices Lawler on Lennar: Net Home Orders Jump, Pricing Improves in “Most” Markets Merle Hazard: "Fiscal Cliff" Kansas City Fed: Growth in Regional Manufacturing Activity Slowed in June Posted: 28 Jun 2012 08:04 AM PDT
From the Kansas City Fed: Growth in Tenth District Manufacturing Eased Further Activity Slowed Growth in Tenth District manufacturing activity slowed in June, and expectations eased as producers grew more uncertain.. ...
The month-over-month composite index was 3 in June, down from 9 in May and equal to 3 in April ... The production index eased from 17 to 12, and the new orders index fell back into negative territory after rising slightly last month. Order backlogs continued to ease. The employment index moved lower but remained positive, while the new orders for exports index decreased.
Price indexes moderated for the second straight month, including an actual decline in monthly selling prices. The month-over-month finished goods price index dropped from 0 to -4, its lowest level since mid-2010, and the raw materials price index also decreased. The regional manufacturing surveys were mostly weaker in June, especially the Philly Fed index.
Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
Click on graph for larger image.
The New York and Philly Fed surveys are averaged together (dashed green, through June), and five Fed surveys are averaged (blue, through June) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through May (right axis).
The ISM index for June will be released Monday, July 2nd, and these surveys suggest some decrease from the 53.5 reading in May.
Weekly Initial Unemployment Claims mostly unchanged Posted: 28 Jun 2012 05:37 AM PDT
The DOL reports:In the week ending June 23, the advance figure for seasonally adjusted initial claims was 386,000, a decrease of 6,000 from the previous week's revised figure of 392,000. The 4-week moving average was 386,750, a decrease of 750 from the previous week's revised average of 387,500.The previous week was revised up from 387,000 to 392,000.
The following graph shows the 4-week moving average of weekly claims since January 2000.
Click on graph for larger image.
The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims declined slightly to 386,750.
This is just off the high for the year.
And here is a long term graph of weekly claims:
This was near the consensus forecast of 385,000 and suggests some renewed weakness in the labor market.
All current Employment Graphs
Tomorrow: Unemployment Claims, Q1 GDP (third estimate) Posted: 27 Jun 2012 07:30 PM PDT
The focus tomorrow will be on the start of the two day European summit in Brussels, and also on the SCOTUS ruling on the health care law. The ruling on the Affordable Care Act is expected a little after 10 AM ET. (the SCOTUSblog is a good resource).
On Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for claims to decline to 385 thousand from 387 thousand last week.
• Also at 8:30 AM, the third estimate of Q1 GDP will be released. The consensus is that real GDP increased 1.9% annualized in Q1; no change from the 2nd estimate.
• At 11:00 AM, the Kansas City Fed regional Manufacturing Survey for June will be released this is the last of the regional Fed surveys for June, and three out of four have been below expectations. The consensus is for a decrease to 4 from 9 in May (above zero is expansion).
Number of Cities with Increasing House Prices Posted: 27 Jun 2012 05:03 PM PDT
The following graph shows the number of cities with increasing house prices on a year-over-year and month-over-month basis.
This graph is based on the Case-Shiller Composite 20 cities using seasonally adjusted data starting in January 2001.
Most cities were seeing month-over-month increases every month through 2005. In 2006, some cities started seeing year-over-year declines (red). There were still a few cities with increasing prices in early 2007. The increases in 2009 and 2010 were related to the housing tax credit (all of those gains and more are gone).
Recently prices have started increasing in more and more cities. Note: Case-Shiller data is through April.
Click on graph for larger image in graph gallery.
In April 2012, 17 cities saw month-over-month price increases (SA), and 10 cities saw year-over-year price increases.
I expect that the number of cities with a year-over-year price increase will continue to climb, and in a few months the Case-Shiller Composite 20 index will turn positive on a year-over-year basis.
Lawler on Lennar: Net Home Orders Jump, Pricing Improves in “Most” Markets Posted: 27 Jun 2012 01:29 PM PDT
From economist Tom Lawler: Lennar Corporation, the 3rd largest US home builder in 2011, reported that net home orders in the quarter ended May 31, 2012 totaled 4,481, up 39.9% from the comparable quarter of last year. The company’s sales cancellation rate, expressed as a % of gross orders, was 16% last quarter, down from 17% a year ago. Home deliveries last quarter totaled 3,222, up 20.1% from the comparable quarter last year. Lennar’s order backlog at the end of May was 3,970, up 60.7% from last May.
As with most other builders, Lennar reported that “pricing trends” were positive in “most” markets last quarter. Here are some comments by CEO Stuart Miller in the press release.
"Evidence from the field suggests that the 'for sale' housing market has, in fact, bottomed and that we have commenced a slow and steady recovery process. And while the housing downturn was broad-based and national, the recovery process continues to be very localized. Although highly conservative mortgage lending practices and challenging appraisals remain a constant headwind, we are experiencing net positive price and volume trends in most of our markets."
Mr. Miller continued, "As the overall housing market has continued to improve over the last several quarters, our well located communities and product execution has allowed us to outperform the market. During the quarter, deliveries increased 20%, new orders increased 40%, backlog increased 61% and our operating margin increased over 100% to 9.2%, our highest margin percentage since Q2 2006. This operating leverage was driven by our ability to increase sales per community, raise prices and lower incentives, and control our overhead costs."
Lennar’s results easily beat “consensus.”CR Note: It helps to watch the builders. In early May, Tom Lawler sent me a chart on homebuilder sales, and Tom argued we'd see upward revisions to new home sales: "[R]ight now I estimate that revisions will lift Census’s estimates of new SF home sales last quarter from an average seasonally adjusted annual rate of 337,000 to a SAAR of 350,000."Sure enough, the Commerce Department has revised up Q1 new home sales to an average of just over 350,000.
Tom adds another key point today: While the new home sales report exceeded “consensus,” recent numbers might even have been stronger if builders on average had higher inventories for sale. After being burned several times with some “false” signs of recovery, most builders have been pretty conservative in both “spec” building and community-count growth.
Merle Hazard: "Fiscal Cliff" Posted: 27 Jun 2012 10:40 AM PDT
A new song from Merle Hazard called the "Fiscal Cliff"
This was debuted on PBS Making Sen$e this morning, see: A Q-and-A, Plus a Ditty and Contest as U.S. Races Toward the 'Fiscal Cliff'
They are having a contest for a new song. From Merle: Though I'm a country singer, I also love surf-style music. The only thing wrong with the genre is that these songs are always -- of course -- about surfing, as well as teenage romance and drag races. There should be more on macro-economic topics and political economy. So I'd like to do another one like 'Fiscal Cliff,' but I'm out of ideas. I'm hoping NewsHour audience might help. I have in mind a song contest. Submit a topic, a key phrase, or a whole lyric. Whatever you like.
You are subscribed to email updates from Calculated Risk
To stop receiving these emails, you may unsubscribe now.Email delivery powered by GoogleGoogle Inc., 20 West Kinzie, Chicago IL USA 60610
Thanks!
Curtis D. Harris, BS, CGREA, REB
Bachelor of Science in Real Estate, CSULA
State Certified General Appraiser
Real Estate Broker
ASTM E-2018 Commercial Real Estate Inspector
HUD 203k Consultant
HUD/FHA Real Estate Appraiser/Reviewer
FannieMae REO ConsultantCTAC LEED Certification
*PIRS/Harris Company and the Science of Real Estate-Partners*630 North Sepulveda Boulevard, Suite 9A, Number 702
El Segundo, CA. 90245
310-337-1973 Office
310-251-3959 CellWebSite: http://www.harriscompanyrec.com Resume: http://www.harriscompanyrec.com/CURRICULUMVITAENAME2011a.pdfCommercial Appraiser Blog: http://harriscompanyrec.com/blog/ We Make a Simple Pledge to
Communicate, in a timely fashion, each appraisal, analysis, and opinion without bias or partiality
Abstain from behavior that is deleterious to our clients, the appraisal profession, and the public
Hold paramount the confidential nature of the appraiser/consultant - client relationship
and
Comply with the requirements of the Uniform Standards of Professional Appraisal Practice and the
Code of Professional Ethics of the National Society of Real Estate Appraisers
IT'S THE LAW- Statement 7: Prohibition Against Discrimination
State agencies should be aware that Title XI and the Agencies' regulations prohibit federally regulated financial institutions from excluding appraisers from consideration for an assignment by virtue of their membership, or lack of membership, in any appraisal organization. Federally regulated financial institutions should review the qualifications of appraisers to ensure that they are qualified for the assignment for which they are being considered. It is unacceptable to assume that an appraiser is qualified solely due to membership in, or designation from, an appraisal organization, or the lack thereof. The Agencies have determined that financial institutions' appraisal policies should not favor appraisers from one or more organizations or exclude individuals based on their lack of such membership. If a State agency learns that a certified or licensed appraiser allegedly has been a victim of such discrimination, the State agency should inform the Agency which has regulatory authority over the involved financial institution. INCLUDING THE APPRAISAL INSTITUTE-MAICONFIDENTIALITY/PRIVILEGE NOTICE: This transmission and any attachments are intended solely for the addressee. The information contained in this transmission is confidential in nature and protected from further use or disclosure under U.S. Pub. L. 106-102, 113 U.S. Stat. 1338 (1999), and may be subject to consultant/appraiser-client or other legal privilege. Your use or disclosure of this information for any purpose other than that intended by its transmittal is strictly prohibited and may subject you to fines and/or penalties under federal and state law. If you are not the intended recipient of this transmission, please destroy all copies received and confirm destruction to the sender via return transmittal
From: [email protected] [mailto:[email protected]] On Behalf Of Calculated Risk
Sent: Thursday, June 28, 2012 9:33 AM
To: [email protected]
Subject: Calculated Risk
Calculated Risk
Kansas City Fed: Growth in Regional Manufacturing Activity Slowed in June Weekly Initial Unemployment Claims mostly unchanged Tomorrow: Unemployment Claims, Q1 GDP (third estimate) Number of Cities with Increasing House Prices Lawler on Lennar: Net Home Orders Jump, Pricing Improves in “Most” Markets Merle Hazard: "Fiscal Cliff" Kansas City Fed: Growth in Regional Manufacturing Activity Slowed in June Posted: 28 Jun 2012 08:04 AM PDT
From the Kansas City Fed: Growth in Tenth District Manufacturing Eased Further Activity Slowed Growth in Tenth District manufacturing activity slowed in June, and expectations eased as producers grew more uncertain.. ...
The month-over-month composite index was 3 in June, down from 9 in May and equal to 3 in April ... The production index eased from 17 to 12, and the new orders index fell back into negative territory after rising slightly last month. Order backlogs continued to ease. The employment index moved lower but remained positive, while the new orders for exports index decreased.
Price indexes moderated for the second straight month, including an actual decline in monthly selling prices. The month-over-month finished goods price index dropped from 0 to -4, its lowest level since mid-2010, and the raw materials price index also decreased. The regional manufacturing surveys were mostly weaker in June, especially the Philly Fed index.
Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
Click on graph for larger image.
The New York and Philly Fed surveys are averaged together (dashed green, through June), and five Fed surveys are averaged (blue, through June) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through May (right axis).
The ISM index for June will be released Monday, July 2nd, and these surveys suggest some decrease from the 53.5 reading in May.
Weekly Initial Unemployment Claims mostly unchanged Posted: 28 Jun 2012 05:37 AM PDT
The DOL reports:In the week ending June 23, the advance figure for seasonally adjusted initial claims was 386,000, a decrease of 6,000 from the previous week's revised figure of 392,000. The 4-week moving average was 386,750, a decrease of 750 from the previous week's revised average of 387,500.The previous week was revised up from 387,000 to 392,000.
The following graph shows the 4-week moving average of weekly claims since January 2000.
Click on graph for larger image.
The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims declined slightly to 386,750.
This is just off the high for the year.
And here is a long term graph of weekly claims:
This was near the consensus forecast of 385,000 and suggests some renewed weakness in the labor market.
All current Employment Graphs
Tomorrow: Unemployment Claims, Q1 GDP (third estimate) Posted: 27 Jun 2012 07:30 PM PDT
The focus tomorrow will be on the start of the two day European summit in Brussels, and also on the SCOTUS ruling on the health care law. The ruling on the Affordable Care Act is expected a little after 10 AM ET. (the SCOTUSblog is a good resource).
On Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for claims to decline to 385 thousand from 387 thousand last week.
• Also at 8:30 AM, the third estimate of Q1 GDP will be released. The consensus is that real GDP increased 1.9% annualized in Q1; no change from the 2nd estimate.
• At 11:00 AM, the Kansas City Fed regional Manufacturing Survey for June will be released this is the last of the regional Fed surveys for June, and three out of four have been below expectations. The consensus is for a decrease to 4 from 9 in May (above zero is expansion).
Number of Cities with Increasing House Prices Posted: 27 Jun 2012 05:03 PM PDT
The following graph shows the number of cities with increasing house prices on a year-over-year and month-over-month basis.
This graph is based on the Case-Shiller Composite 20 cities using seasonally adjusted data starting in January 2001.
Most cities were seeing month-over-month increases every month through 2005. In 2006, some cities started seeing year-over-year declines (red). There were still a few cities with increasing prices in early 2007. The increases in 2009 and 2010 were related to the housing tax credit (all of those gains and more are gone).
Recently prices have started increasing in more and more cities. Note: Case-Shiller data is through April.
Click on graph for larger image in graph gallery.
In April 2012, 17 cities saw month-over-month price increases (SA), and 10 cities saw year-over-year price increases.
I expect that the number of cities with a year-over-year price increase will continue to climb, and in a few months the Case-Shiller Composite 20 index will turn positive on a year-over-year basis.
Lawler on Lennar: Net Home Orders Jump, Pricing Improves in “Most” Markets Posted: 27 Jun 2012 01:29 PM PDT
From economist Tom Lawler: Lennar Corporation, the 3rd largest US home builder in 2011, reported that net home orders in the quarter ended May 31, 2012 totaled 4,481, up 39.9% from the comparable quarter of last year. The company’s sales cancellation rate, expressed as a % of gross orders, was 16% last quarter, down from 17% a year ago. Home deliveries last quarter totaled 3,222, up 20.1% from the comparable quarter last year. Lennar’s order backlog at the end of May was 3,970, up 60.7% from last May.
As with most other builders, Lennar reported that “pricing trends” were positive in “most” markets last quarter. Here are some comments by CEO Stuart Miller in the press release.
"Evidence from the field suggests that the 'for sale' housing market has, in fact, bottomed and that we have commenced a slow and steady recovery process. And while the housing downturn was broad-based and national, the recovery process continues to be very localized. Although highly conservative mortgage lending practices and challenging appraisals remain a constant headwind, we are experiencing net positive price and volume trends in most of our markets."
Mr. Miller continued, "As the overall housing market has continued to improve over the last several quarters, our well located communities and product execution has allowed us to outperform the market. During the quarter, deliveries increased 20%, new orders increased 40%, backlog increased 61% and our operating margin increased over 100% to 9.2%, our highest margin percentage since Q2 2006. This operating leverage was driven by our ability to increase sales per community, raise prices and lower incentives, and control our overhead costs."
Lennar’s results easily beat “consensus.”CR Note: It helps to watch the builders. In early May, Tom Lawler sent me a chart on homebuilder sales, and Tom argued we'd see upward revisions to new home sales: "[R]ight now I estimate that revisions will lift Census’s estimates of new SF home sales last quarter from an average seasonally adjusted annual rate of 337,000 to a SAAR of 350,000."Sure enough, the Commerce Department has revised up Q1 new home sales to an average of just over 350,000.
Tom adds another key point today: While the new home sales report exceeded “consensus,” recent numbers might even have been stronger if builders on average had higher inventories for sale. After being burned several times with some “false” signs of recovery, most builders have been pretty conservative in both “spec” building and community-count growth.
Merle Hazard: "Fiscal Cliff" Posted: 27 Jun 2012 10:40 AM PDT
A new song from Merle Hazard called the "Fiscal Cliff"
This was debuted on PBS Making Sen$e this morning, see: A Q-and-A, Plus a Ditty and Contest as U.S. Races Toward the 'Fiscal Cliff'
They are having a contest for a new song. From Merle: Though I'm a country singer, I also love surf-style music. The only thing wrong with the genre is that these songs are always -- of course -- about surfing, as well as teenage romance and drag races. There should be more on macro-economic topics and political economy. So I'd like to do another one like 'Fiscal Cliff,' but I'm out of ideas. I'm hoping NewsHour audience might help. I have in mind a song contest. Submit a topic, a key phrase, or a whole lyric. Whatever you like.
You are subscribed to email updates from Calculated Risk
To stop receiving these emails, you may unsubscribe now.Email delivery powered by GoogleGoogle Inc., 20 West Kinzie, Chicago IL USA 60610
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