HARRY’S WEEKLY UPDATE

A CURRENT LOOK AT THE COLORADO SPRINGS RESIDENTAIL real estate MARKET 

 

GOOD NEWS !!! U.S. EMPLOYMENT REPORT SHOWS JOB CREATION IMPROVING - THAT'S GREAT FOR real estate

From IHS Global Insight

October's employment report was the best for months, as payrolls rose 151,000 and prior months were revised up. But the unemployment rate remained stuck at 9.6%.

The October payroll report was much better than expected, with 151,000 jobs added, a longer workweek, and positive revisions (totaling 110,000) to previous months. Private payrolls rose 159,000, and we now have four months in a row of private employment gains of more than 100,000—for the first time in this recovery. The new jobs were overwhelmingly in the private service sector, the economy's primary jobs engine. The jobs weren't enough to lower the unemployment rate, though, which remained stuck at 9.6%.

Government jobs did not move the headline number much this month. There were 8,000 federal government jobs lost in total, of which 5,000 were temporary Census workers (that leaves only 1,000 temporary Census workers still in place). State and local governments lost another 7,000 jobs (the smallest decline since April).

Manufacturing did not contribute to the jobs improvement. Manufacturing payrolls fell 7,000, their third consecutive monthly decline.

Construction helped a little, with 5,000 jobs added in October and only 8,000 lost in September (originally a 21,000 loss). There were 6,000 jobs lost in residential construction, but 6,000 gained in nonresidential construction and 4,000 added in heavy and civil engineering.

The key improvement was in private services, where 154,000 jobs were added this month, the best gain since April, and up from 111,000 in September. The sectors that did much better this month were retail trade (up 28,000, instead of up 12,000 in September), business services (up 46,000, instead of up 19,000), and education (up 19,000, instead of down 12,000). Health services added 24,000, the same as in September. Food services and drinking places added 24,000 jobs, their third straight strong month, suggesting that there has been some loosening in consumer wallets for eating out.

Within business services, the majority of the jobs added were temporary (35,000). But it is worth noting that the vast majority of jobs added this month were permanent hires.

The unemployment rate was steady at 9.6%. Household employment actually fell by 330,000, while the labor force fell by 254,000. It is pointless to try to interpret month-to-month movements in household employment (it is far more volatile than the payroll employment measure). But it is worth noting that the labor-force participation rate fell from 64.7% to 64.5%, its lowest level in this cycle, and implying that the improvement in jobs has been insufficient to attract potential workers back into the labor force.

The most comprehensive measure of underemployment (U-6)—which includes workers who would like a job but are not currently looking, plus those working part time who would rather work full time—edged down from 17.1% to 17.0%.

The payrolls report suggests that the economy has entered the fourth quarter with more momentum, so that GDP growth will beat the 1.5–2.0% pace seen in the second and third quarters. Rising employment, hours, and wages all give a welcome boost to consumer spending power as the holiday season approaches.

One upbeat employment report does not change the picture that this will be a slow, drawn-out recovery. And there were strong private employment gains back in March and April that did not continue. But today's news does further reduce the likelihood of the dreaded "double-dip" downturn, and as that risk is seen to recede, businesses and households may become more confident to hire and spend.

The report comes just two days after the Federal Reserve launched its new program of quantitative easing (QE2). If the Fed had seen this report before its decision, it probably would have moved ahead anyway, since the labor market remains too weak and the rate of inflation too low to meet the Fed's dual mandate of high employment and price stability. But it would have allayed some of the Fed's fears of the downside risks.

 

AND ..AS ICING ON THE CAKE….OUR NEW GOVERNOR IS ALSO FOCUSING ON JOB GROWTH

A good sign that our new Governor, John Hickenlooper, understands and agrees with the need for new jobs in our state, was the tone of his first speech as Governor. He spoke for 30 minutes to 300 civic leaders in Colorado Springs at the 13th annual Mayor’s Breakfast at the Fine Arts Center. First of all, he emphasized the need for setting aside the traditional barriers between Denver and Colorado Springs and between our two political parties and promised that he will work to heal the political rift that has developed between our two cities. The very fact that he scheduled his first speech in Colorado Springs is a hopeful sign that he is serious about this commitment. Secondly, he spoke about the fact that our state must be managed as a business, rather than as a governmental entity.

Governor Hickenlooper emphasized that, “There is no hidden money” in the state budget and said improving Colorado’s business climate is the only way the state will overcome continued budget shortfalls that have hamstrung programs. He said he wants to launch a “bottom-up” economic development plan for the state by having all 64 counties create their own plans which would then form the backbone of the state’s plan. This is a dramatic improvement over the traditional process in which the state develops an economic development plan and then sends it down to the counties.

Governor Hickenlooper pledged to back military growth in El Paso County, to cut red tape and streamline state government. He said, “I think state government has to be smaller with fewer employees”.

He also emphasized that the key to business growth will be marketing the state.

The Governor’s speech was interrupted by 3 standing ovations, and was followed by very positive comments by attendees. “He sounded more like a successful businessman, rather than an elected bureaucrat” said one attendee.

As a matter of fact, our Governor Hickenlooper now sounds a lot like Rick Perry, the Governor of Texas, who managed to attract 90% of all new non-governmental jobs created in the U.S. in 2009, to Texas. How he accomplished this, while managing to keep existing businesses in his state, is outlined in his new book, “Fed Up”, the blueprint of how a state can succeed, in spite of Washington.

We are very encouraged by our new governor’s words and we hope he can deliver on this dramatic new approach to running our state.



SOME OTHER POSITIVE INDICATORS

On November 6, 2010, the Wall Street Journal noted the new 151,000 October jobs cited above. This represents the largest number of new private-sector jobs since April, which produced 159,000 jobs. WSJ also reported that the price of Treasuries fell. In addition, on Friday, Nov. 5, the stock market closed at a 2-year high. WSJ noted that these three indicators point to an improvement in the economy. 

Traditionally, the stock market leads the business cycle by 2 quarters, so, we should look for positive signs of business and job growth by the end of this coming June. Combine all of these factors with the recent rise in interest rates and it’s obvious that, if you are considering the purchase of a residence or an investment property, now is the time to buy. Call us.

 

LATEST LOCAL STATISTICS ALSO SHOW ENCOURAGING TRENDS

Click here for the latest Sales and Listing statistics for the Pikes Peak area. As you can see in the monthly PPAR statistics, in October, 2010, there were 631 sales in the Pikes Peak area, a decline of 18.4% from Oct. 2009. Total annual year-to-date sales for 2010 were 7005 as compared with 7328 in 2009. These declines can be attributed to the expiration of the Income Tax Credit for home purchasers, which expired in June.

What is very interesting about this month’s statistics is that, in spite of the declining number of sales, prices actually increased in 2010. (Average price in 2010 was $240,326 vs $213,352 in 2009, for an increase of 12.6%. Median price for sold homes in 2010 was $200,000 vs $187,995 in 2009 for an increase of 6.4%). These increases represent the twelfth straight month of sales price increases, a very good sign for the local real estate market (and a very unusual increase, compared to most other communities in the country).

The decline in the number of listings can probably be attributed to Homeowners who have removed their homes from the market until activity increases.

Note that the ratio of average selling price to listing price was 97.4%, a reflection of the fact that successful Sellers are being very realistic in establishing their asking prices. Those Sellers who are overpricing their homes are not selling in today’s tight market. You will note that the data breaks down the local area into separate neighborhoods, so you can see exactly how your home fits into the big picture.

One sad note in the data shows 3966 foreclosures so far in 2010. While this number is lower than 2009 (4540), it is still the third highest number of foreclosures since 1981. We all hope this number declines in 2011.

Bottom line: Home prices, large inventory, low mortgage rates, looming inflation and common sense all lead to one conclusion ….The time to buy your new home or investment property is now !!! Call us

And, please remember, I would be honored to serve as your Broker for all of your residential real estate needs. I want to help you, my reader, make the most prudent and accurate Real Estate business decision.

Also if you know of anyone who desires to buy or sell local real estate, or, who is moving in or out of the Pikes Peak region, remember that, with over 37 years of providing relocation and Real Estate services to clients throughout the country, I am uniquely qualified to assist them with the relocation process, including buying and/or selling their homes on both ends of their move. Please allow me to implement my negotiating skills on your behalf.

Just click on the icon at the top of this email to listen to my latest podcast. ….And, if you would like to learn more about our Job Loss Protection Program, or, about our CyberHomes Complete Market Analysis of a property, please contact us. 

 

JOKE OF THE WEEK