Tuesday, November 25, 2014

November 25, 2014 Real Estate Report - Happy Thanksgiving

It is hard to believe that another year is just about to pass, but the end of the year holidays are already here. It has been an interesting year. We began with one of the harshest winters ever to hit the United States and it seems as if we are ending the year with the same weather pattern, as the "polar vortex" hit much of the nation in the middle of November. It is interesting that the cold weather hit the same week that there was an announcement of a climate deal between the U.S. and China. How can there be global warming when the weather is so extraordinarily cold? Well, we can't get into the scientific arguments regarding the debate, but we will note that one of the effects of global warming is supposed to be more extreme weather, including precipitation. And these extremes did affect our economy this year. So, we will not be thankful for the colder weather and extreme storms, but we will be thankful that the economy has moved forward in spite of these obstacles. As a matter of fact, the last employment report was the best evidence that we have had that the economy is getting better. Why do we believe that? Well, the numbers were assessed as disappointing. We think that we have come a long way in order for a month in which the unemployment rate went down and we added over 200,000 jobs to be labeled disappointing. Just five years ago the economy was losing 200,000 or more jobs per month and the economy has not averaged 200,000 jobs growth per month since before the recession. Sure, there are disappointing statistics associated with the report. There is still a low labor force participation rate and stagnant wage growth, which means that many of the jobs being created are lower paying. However, the solution to both of these problems is the creation of more jobs. When there is a shortage of labor, then wages will increase. And if 200,000 jobs added per month is our "low-point" for the next year, there will be plenty of jobs created which will help these numbers. And continued low interest rates and falling oil prices are two additional things to be thankful for with regard to the economy. Yes, things are not perfect, but when you compare where we are today to five years ago, we are in a much better position to move forward with regard to a healthy economy. If it doesn't snow all winter! Keith Stewart 773-529-7000

Tuesday, November 11, 2014

November 11, 2014 Real Estate Report - Veterans Day

The election is over. The October employment report has been released. But these important events should not obscure the real importance of this week. Today is Veterans Day, the day we give homage to those who have served our country by defending our freedom throughout our history. We only need to look at what is happening in the Middle East to be reminded as to how important those who have served are to each and every one of us. Many don't realize how extensive the population of veterans is in this country. There are well over 20 million veterans and active military, comprising approximately 10% of the adult population of the United States. For those in business, this makes veterans a very important demographic. For example, did you know that over 15% of the new home sales in the United States are being financed through the Department of Veterans Affairs VA Loan Program? Veterans also own around 10% of all U.S. businesses and have an income which is approximately $10,000 higher than the average American. So, we should not only thank veterans for serving, but also as veterans come back from overseas, helping them assimilate into society is not only the right thing to do, it makes great business sense. Of course, we could not completely ignore the events of last week. As for the election, the results are important because we will no longer have a "divided" Congress; however, this does not mean that all gridlock will be removed. The employment report was also newsworthy, as this report followed our strongest month of job creation in quite some time. The numbers released Friday were slightly below forecast, but were still strong and included an upward revision of the job gains for the previous month. Plus, the unemployment rate moved down to 5.8% while the labor force participation rate increased slightly as well. All in all, a report that shows the jobs recovery continues to be on track. Keith Stewart 773-529-7000