Yeah, the title is so sexy, right? Well, see for youselves...okay folks, let’s talk turkey about the housing market – for those of you that own homes in the NY/NJ area…and for those that are THINKING ABOUT buying a home here – you may want to read this. What the hey, information is a good thing, right?
First of all, a very Happy New Year to you all – 2010 was a tough year for many of us – I myself had a very symbolic end of year moment. A couple of days before Christmas, a neighbor of mine had a severe car accident and lost his life – a terrible tragedy that saddened our entire community. Two days after Christmas, a friend of mine delivered a beautiful baby, and I couldn’t help feeling like life was delivering all too much for my emotions to process – great joy and such sadness, all turning on a dime. And I think my psyche may have just had enough – because this is what my year has been like. This is what it has been like for all of us – as …Americans in this mudslide of an economy. The ups and downs have us reeling and we just need to slow down the ride so we can catch our breaths and make the room stop spinning.
So this posting is a quiet look at some statistics and what we may think they mean for the housing market in NJ/NY – not because I am such a great predictor of the economy, but because trends and statistics offer insight into the way things MAY be going…and like I said, more information is NEVER a bad thing, right?
Statistics of interest: Reuters & Forbes are reporting a 12-15% increase on online holiday sales in 2010. This is good new, because most importantly, it is not to the detriment of in store holiday sales – the posting for November sales statistics are starting to arrive, and we have some great results for lots of stores that traditionally carry holiday items. Barnes and Noble, Target, among other big box, wholesale to public and mall based clothing stores are up anywhere from 4%-14%. Oh, and if those numbers feel arbitrary, at least we know that spending may be up in general, as Mastercard reports holiday spending up 5.5% from last year.
Also, according to the National Retail Federation’s BIGResearch Christmas Holiday Consumer Intentions and Actions Survey, there was a slight increase in Americans’ intended spending habits for the holidays this year over last year. This, if nothing else, seems to indicate a little more pocket money, perhaps better budgeting and planning with money, or at least a perception that things are improving ever so slightly:
Average Amount Consumers Planned to Spend For Gifts: $688.87 (2010) / $681.83 (2009) / $694.19 (2008) / $755.13 (2007)
Average Amount Consumers Planned to Spend for Holiday Decorations: $41.51 (2010) / $40.70 (2009) / $42.90 (2008) / $46.01 (2007)
Total Amount Consumers Planned to Spend for Winter Holiday-Related: $688.87 (2010) / $681.83 (2009) / $694.19 (2008) / $755.13 (2007)
Average Amount Consumers Planned to Spend For Gifts: $688.87 (2010) / $681.83 (2009) / $694.19 (2008) / $755.13 (2007)
Average Amount Consumers Planned to Spend for Holiday Decorations: $41.51 (2010) / $40.70 (2009) / $42.90 (2008) / $46.01 (2007)
Total Amount Consumers Planned to Spend for Winter Holiday-Related: $688.87 (2010) / $681.83 (2009) / $694.19 (2008) / $755.13 (2007)
Now, let us discuss – holiday spending is just that…for the HOLIDAYS, so we should expect an immediate slump in retail numbers for the first quarter of 2011 – people usually tighten up their belts after the holidays anyway – we diet with our budgets as much as we do with our food intake. The question is going to be do we see a stable spending number as the winter months pass and people need to purchase for commercial holidays (like Valentine’s Day) and simply because they need to replace and purchase new retails goods. We’re not looking for the numbers to shoot up – just stay on an even keel.
On the job front, according to the US Bureau of Labor Statistics, 39,000 jobs were added in November of 2010, although those may be holiday based. And as Friday, December reports will be out and apparently, if you believe ADP, 297,000 jobs were added in December (seasonally adjusted)! Because employment tends to be a lagging indicator of the market, we have to hope that it stablilizes over the next 18 months – once again, let’s just hope we don’t lose more jobs, and maybe even continue to add them. Initial jobless claims are down, and the word on the street is that big banks are hiring again and are adding 6000+ jobs back on the roster. Lastly, according to CNNMoney.com, there has been a 2% increase in childcare employment – an unofficial sign that people may be returning to work and therefore require more childcare.
On the home sale front, November 2010 existing home sales jumped 5.6%, according the National Association of Realtors (although that followed slumpy sales July-October). I know that with many buyers, there is a sense of wanting to find a home before the interest rates threaten to rise. I have clients right now who are eagar to find a home quickly in order to lock in lower interest rates for their mortgage – this sense of urgency seems to have driven a tiny boost in the fall market. I do think that we will have a winter slump (as per the season), but I do anticipate that spring will bring us a decent market for sellers and buyers. And with a tiny 0.4% increase in median home prices in November, there is a glimmer of hope for the spring. I think NAR would argue that low home prices, stable family incomes and low interest rates make this the perfect time to buy a home.
I have decided that statistics, in some ways, are meaningless. While they seem to provide us with a sense of hopefulness for 2011, they still indicate a lengthy journey back to our “days of wine and roses.” Our perception of homebuying has been distorted from years of homeowners using their homes as primary investments – looking for short term gains buying and selling, renovating and flipping. Homeownership traditionally has been about the decision to set your roots in a community to live – I say, you buy a home when you need one – if your life takes you down that path. A home is, after all, a place to live your life and raise your family, celebrate memories and feel safe. You get a tax break for your mortgage interest, and we should all be so lucky if we make some money from the home in which we have invested our time, love and lives.
If you or anyone you know is searching for a home in the NJ area, please don't hestiate to contact me at http://us.mc328.mail.yahoo.com/mc/compose?to=nancychu_homes@yahoo.com or 917-992-3098. And if you want to check out the most updated home search website, have a look at http://nancychusellsnj.findbestnjhomes.com/.
