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Bedford Hills NY Homes

Yellen: Housing stakes a minor role in post-recession recovery | Bedford Hills Real Estate

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Economic recoveries are generally lifted by new housing consumption, but the post-2008 recession failed to gain significant tailwinds from housing, Federal Reserve Vice Chairman Janet Yellen said Monday.

In fact, housing overall became much less of a stimulus in the years following the subprime-market bust, the vice chair concluded when speaking at the “A Trans-Atlantic Agenda for Share Prosperity” conference in Washington D.C.

“After a lengthy recession that imposed great hardships on American workers, the weak recovery has made the past five years the toughest that many of today’s workers have ever experienced,” Yellen added.

An important tailwind in most recoveries is housing because residential investment creates jobs in construction as well as related industries, Yellen said. 

Before the Great Recession, housing investment added a half of a percentage point on average to real Gross Domestic Product (GDP) growth in the two years after each of the previous four recessions. This was considerably more than its contribution to growth at other times, the vice chairman noted.

“During this recovery, in contrast, residential investment, on net, has contributed very little to growth since the recession ended,” Yellen stated. “The reasons are easy to understand, given the central role that housing played in the Great Recession.” 

An extended boom in construction was driven in large part by overly loose mortgage lending standards as well as unrealistic expectations of future home price increases, leading to a housing market collapse complete with plunging home sales and housing prices as well as a sharp credit contraction, according to Yellen.

Thus, tight mortgage credit conditions are still making it difficult for potential homebuyers, despite record-low mortgage interest rates, creating housing affordability.

“I’m encouraged by recent improvement in the residential sector, but the contribution of housing investment to overall economic activity remains considerably below the average seen in past recoveries,” Yellen said.

Click on the graph to view the average contribution of residential investment to real GDP growth during past recoveries.

via housingwire.com

 

Justice Sues S&P; Is It Time to Rethink the Role of Ratings Agencies? | Bedford Hills Real Estate

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Most of the time, court cases are manna for journalists. The politicians and corporations we cover aren’t in the habit of dishing out information they don’t want the public to know. But along comes a lawsuit, and the parties are often forced to put a lot of juicy details on the public record. So when the Justice Department yesterday announced a joint federal and state lawsuit against the ratings agency Standard & Poor’s for defrauding investors in the run up to the financial crisis with its overly optimistic ratings of mortgage-related investments, I was excited to see what new dirt the complaint would unearth.

Much to my chagrin, however, the complaint is a fairly mundane read  for the simple fact that we have known for years that the ratings agencies were hamstrung by a fundamental conflict of interest: They are paid by the sellers of securities rather than the buyers. So during the inflation of the real estate bubble in the early 2000s, as investment banks scrambled to package mortgages into complex financial instruments, ratings agencies also scrambled to figure out how to get those investment banks to chose them to rate their securities. What was S&P’s strategy to entice investment banks to pay it rather than its competitors? Rate their securities higher.

The complaint does put this dynamic into sharper relief, as it provides us with the details of conversations, emails, and instant message exchanges that show the evolution of S&P’s ratings philosophy from one focused primarily on accurate

via business.time.com

California luxury market outpaces traditional home sales | Bedford Hills Real Estate

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California is known for its rich and famous property owners, but could they be getting richer? The number of California homes that sold for $1 million or more jumped to a five-year high in 2012.

Analysts believe a recovering economy, rising home prices and a record number of cash purchases are all driving factors behind this increase.

Taking things a notch higher, the number of homes sold for more than $5 million reached an all-time high. 

San Diego-based DataQuick reported that a total of 26,993 homes sold for $1 million or more in 2012, a 26.9% increase from the 21,267 sold in 2011.

It seems that the luxury-home market is outpacing overall sales in California. The 2012 luxury-home increase of 26.9% was significantly higher than the 8.2% increase in overall sales. 

“It should go without saying that buyers and sellers in the prestige market tend to respond to different motivations and incentives than the rest of the market,” said John Walsh, DataQuick president. “Job security, down payment sizes and mortgage interest rates don’t play the same role. Returns on investments in a low interest-rate financial environment and safe-haven investing do play a role.”

This shift in sales toward luxury homes has established itself within the past two years.

In the state of California, 697 homes were sold for more than $5 million in 2012, compared to the 491 sold in the Golden State in 2011.

For homes ranging from $4 million to $5 million, a record 460-homes sold, up from the 344 sold in 2011.

DataQuick reported that the most expensive confirmed purchase last year was an 8,930 sq. ft., 4-bedroom, 4.5 bathroom luxury-home in Woodside, Calif., selling for $117,500,000 in November. 

Richard Green, director of the USC Lusk Center for Real Estate, says it’s not surprising that luxury homes are flying off the market right now. 

“If you look at the 1%, they are doing better than everybody else since the recovery started in 2009,” said Green. “The most recent data I’ve seen shows that benefits of the recovery have gone 93% to the top 1%, so it’s not surprising that their demand for housing is stronger than everybody else.”

mhopkins@housingwire.com

via housingwire.com

Case-Shiller Downplays the Doubters | Bedford Hills NY Real Estate

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Weak prices in a number of late fall markets as evident in NAR’s latest pending sales index has been causing concern in the real estate circles, but Case-Shiller, the final word on prices, downplayed the doubters today.

Through November 2012, the S&P/Case-Shiller Home Price Indices showed home prices rose 4.5 percent for the 10-City Composite and 5.5 percent for the 20-City Composite.

Year-over-year prices rose in 19 of the 20 cities and fell in New York. In 19 cities prices rose faster in the 12 months to November than in the 12 months to October; Cleveland prices rose at the same pace in both time periods. Phoenix led with the fastest price rise – up 22.8 percent in 12 months as it posted its seventh consecutive month of double-digit annual returns.

“The November monthly figures were stronger than October, with 10 cities seeing rising prices versus seven the month before.” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices.

“Phoenix and San Francisco were both up 1.4 percent in November followed by Minneapolis up 1.0%. On the down side, Chicago was again amongst the weakest with a drop of 1.3 percent for November.

via realestateeconomywatch.com

US Economy Contracts .1% in 4th Qtr – Not Good for Real Estate | Bedford Hills Real Estate

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US ECONOMY SHRINKS: GDP FALLS 0.1% IN Q4

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Pete Souza/Official White House photo

The advance estimate for fourth-quarter U.S. GDP is out.

The economy contracted 0.1 percent in Q4 versus economists’ consensus expectations of a 1.1 percent expansion.

Personal consumption growth came in at 2.2 percent – slightly higher than consensus estimates of 2.1 percent – but was driven largely by a 13.9 percent advance in the consumption of durable goods.

Government spending was the largest driver of the economic contraction in the fourth quarter, subtracting 1.33 percentage points from Q4 GDP growth and falling 6.6 percent. Federal spending fell 15.0 percent, led by a 22.2 percent drop in defense spending. Federal spending on nondefense items was actually up 1.4 percent. State and local spending fell 0.7 percent.

The drawdown in private inventories was the second culprit behind the contraction, subtracting 1.27 percentage points from Q4 GDP growth after adding 0.73 percentage points to Q3 GDP growth.

via businessinsider.com

Homebuilder stocks outperform in January | Bedford Hills Real Estate

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Homebuilder stocks continued to outperform last week with Keefe, Bruyette & Woods reporting that homebuilder stocks jumped 4.1% for the week ending Jan. 25.

That is up from the S&P 500’s 1.1% increase in the same week and the S&P 500 Financial Index’s 1.3% jump, KBW said.

“Building products companies and mortgage insurers were strong, while non-agency REITs and mortgage servicers were weak,” KBW noted when comparing builders to other parts of the housing industry.

Homebuilder stocks are up 10.9% month-to-date, compared to only a 5.3% increase for the S&P 500 and a 6% increase for the S&P 500 Financials Index.

“In 2012, homebuilder stocks were up 122.8% vs. +13.4% for the S&P 500 and +26.3% for the S&P Financials Index,” KBW analysts said. “Historically, homebuilders have outperformed the S&P 500 in January by 3.5-6.0%.”

via housingwire.com

5 Must-Haves for Social Media Management | Bedford Hills Realtor

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5 Must-Haves For Social Media Management

Social-Media-Marketing

Social media has grown from a curiosity to an integral piece of corporate strategy in the space of only a few years. Nearly overnight, companies have brought on whole teams of specialists to craft effective social media strategies and manage multiplying numbers of social media accounts. Companies are hungry for better social media tools to engage their constituents. Below is a list of five features key to delivering on a social media strategy.

1. SCHEDULING
Social media doesn’t sleep, but that doesn’t mean you don’t have to! Ensure your social media management tool of choice allows you to schedule messages in advance. So, even while you are in meetings with clients in New York, you can schedule messages to go out to your customers in Tokyo during their workday.

If you want to take scheduling to the next level, look for a tool that offers the ability to schedule large batches of messages at once. This will be an incredibly useful time-saver when it comes to managing campaigns or contests that require heavy messaging around a certain period of time

2. GEO
When it comes to interacting with your customers, those in different locations may have different needs, speak different languages or follow different trends. You’re going to want a tool that optimizes your searches and filters your searches by language to help you curate relevant content for different demographics.

3. KEYWORDS
Social media is also an effective way for businesses to keep their finger on the pulse. Setting up keyword search streams provides insight into what your customers think is trendy. This can assist with the development of a marketing strategy that focuses on your customer’s lifestyles and personal preferences.

Keywords are useful for keeping track of competitors’ activities but they’re also useful for tracking brands that are complementary to your offering. If your product or service is often purchased in conjunction with another product or service, keep an eye on the complementary product’s social media activity to take advantage of promotions or recent sales, as these are potential leads ready to be converted.

4. COLLABORATION
It takes two to tango, especially when it comes to being social. Collaboration is key when it comes to developing and executing an effective social media campaign. Ensure your social media management tool enables you to seamlessly collaborate with your team to ensure you execute an integrated social media management strategy.

5. REPORTING
Gone are the days of social media purely being about “building buzz.” It is now a line item in budgets as companies invest resources in these channels and there is an expectation for reports which show ROI for social media outreach.

Make sure your tool has the ability to analyze important metrics such as click-through rates on shortened links, clicks by region and top referrers. It’s also important to have access to Facebook Insights and Google Analytics.

The most effective tools will provide the ability to access in-depth granular metrics on the efficacy of your social media programs. This will allow you to determine which messages resulted in the highest number of conversions, which platform is providing the greatest return and which time of day is most effective to drive traffic.

WHAT IT TAKES TO GO PRO
Social media is here to stay and to maintain a competitive advantage, businesses need to stay abreast of this ever-evolving space. I’ve recently completed the training and become a Certified HootSuite Professional and have found that HootSuite is a tool many find very useful. I am also familiar with TweetDeck and Adobe Social. The point is, there are products out there to meet your needs.

What are you using to satisfy these 5 Must-haves?

via socialmediatoday.com