Monday, October 23, 2006

CA Job Market Strong

More good news...excellent job growth in the California economy

Job market stays healthy

The statewide jobless rate in September fell a tenth of a percentage point, to 4.8 percent, while employers added 17,300 payroll jobs, the Employment Development Department said Friday.

EDD said greater Sacramento's unemployment dropped two-tenths of a point, to 4.2 percent, as the four-county region gained 3,000 jobs. The area encompasses Sacramento, Placer, El Dorado and Yolo counties.

Even adding jobs to the manufacturing sector bucking the trend in the rest of U.S.

Factories added 4,000 jobs last month, while the educational and health services sector added 4,600. Leisure and hospitality gained 3,900.
"It's really broad-based," Roth said.

  • Sac Bee Article

  • By Dale Kasler - Sac Bee

    Friday, October 20, 2006

    The Future of California Home Prices

    Home Prices

    United Kingdom As shown in Exhibit 4, U.K. home prices have accelerated to an unprecedented 20% annual price appreciation over the last 3 years from 8% annual appreciation over the last 20 years.

    Likewise, California home prices have followed a similar trend, increasing 15% per year over the last three years versus 7% annual appreciation over the last two decades.Exhibit 3 and Exhibit 4 compare the existing home price indices of California and the U.K. market. On a quarterly basis, prices have a surprising correlation at 99% since the beginning of our data series in 1983.

    As you can see above the UK and California have a 99% correlation in home price appreciation over the last 23 years with the UK leading 12-15 months. If you want to see the future of home prices in California, just look to our friends over the pond. The UK market has rebounded the latter half 2006 with appreciation in markets from 6-10% (see post from October 12th).

    The future of CA in 2007/8 bodes well

    Source Credit Suisse First Boston Sept 13, 2005

    Thursday, October 19, 2006

    California Rental Market Strong

    Looks like a strong economy to me................

    A Home Market That's Tight: Rentals
    Apartment rents climb 6% in California as they play catch-up with sale prices.

    Playing catch-up with the recent run-up in home prices, rents in large apartment complexes posted strong gains across California in the third quarter, according to data to be released today.Rents rose an average of 6% in most of the state's biggest markets, Novato, Calif.-based research firm RealFacts said. Southern California remained the West's most expensive place to rent, and the San Francisco Bay Area saw the highest rent increases, RealFacts said.

    The rental market is likely to tighten further with the state's stable job market attracting more people to move here, although rising rents could slow economic growth, analysts say."We have no trouble finding tenants," said Rafael Padilla, a commercial property broker who owns about 35 apartment units in West Los Angeles. "The influx of people is still tremendous. If I lose one tenant, there are three more behind them."The average rent in Los Angeles and Orange counties rose 7.4% to $1,546 during the third quarter, making the counties the most expensive among 28 Western markets, said RealFacts, which surveyed 12,000 apartment buildings of 100 or more units in 15 states.

    Rents increased 7.6% to an average of $1,452 in Ventura County. The Inland Empire is becoming more of a landlord's market as well, with rents in Riverside and San Bernardino counties rising 6% to $1,129.In Silicon Valley, the average rent jumped 10.4% to $1,450, the first double-digit increase in the high-tech heartland since the end of the dot-com boom in early 2001. Then, Santa Clara County's average rent peaked at $1,959. For all of Southern California, occupancy rose 0.4 percentage point from a year earlier to 96.2%. RealFacts analyst Chris Bates said occupancy above 96% was generally considered fully occupied — meaning that renters were having increasing difficulty finding vacancies.

    LA Times - By Annette Haddad, Times Staff WriterOctober 19, 2006,0,6721437.story?coll=la-headlines-business

    Tuesday, October 17, 2006

    Homebuilder Recovery signalling upcoming strength

    Is the Gloom Lifting for Homebuilders?

    Some good news on the housing front. Could all this jibberish about housing bubble be over done? The stock market could be signalling a spring fling in the housing market.........

    Investors drove up shares of the major U.S. homebuilders Oct. 10 after JP Morgan upgraded DR Horton (DHI), Toll Brothers (TOL), and Standard Pacific (SPF), citing stabilized inventories, while the Dallas Fed president suggested fears of a housing correction were overblown.
    "While pricing, orders, and starts may still show negative trends in the near-term, we believe inventories the leading driver of the market's pullback, in our view, as well as our prior cautious stance have begun to stabilize, and in turn should drive a market recovery," the bank said Oct. 10 in a research report.

    And the Fed thinks so too..........

    On the same day, in a question-and-answer session after a speech in London, Dallas Federal Reserve president Richard Fisher downplayed risks of a housing market correction, which he said was one of the "most over-anticipated in history."

    Source: Business WeekPublication date: October 11, 2006

    Saturday, October 14, 2006

    Dow Even Higher

    Dow Sets Another Record
    As 12000 Level Nears,Gut Check for Bears;'Yesterday's Trade'

    October 13, 2006 11:57 p.m.

    There's little question a shift has taken place on Wall Street in recent weeks. The bears are on their heels.
    Only a few months ago, many market watchers were forecasting sharp declines for stocks. A sagging housing market, record-high oil prices and an implacable Federal Reserve on a mission to crush inflation with higher rates made the bearish argument for stocks convincing.
    A lot has changed.
    A gauge of the shift -- as well as a catalyst -- has been the record-setting run by the Dow Jones Industrial Average, which cracked its all-time high last week and set several more records this week. The Dow finished higher again on Friday, gaining 12.81 points to 11960.41, another record that put it closer to the 12000 level. The blue-chip average gained 110.30 points this week, leaving it up 11.6% for the year.
    The Standard & Poor's 500-stock index gained 2.78 to 1365.61 Friday, putting it up 9.4% for the year, and the Nasdaq added 11.11 to 2357.29, up 6.9% year-to-date.
    More and more investors are growing upbeat about the market. And as stocks continue to advance, bearish portfolio managers, often measured against one of the major benchmark indexes, are being dragged into the market, sometimes almost against the will.
    "People are feeling like they have to be fully invested because they're all being measured against their peers," said Michael Panzner, vice president in sales trading at Collins Stewart.
    Mr. Panzner, a self-professed bear, admits the
    rally has confounded his expectations for a sharp downturn.


    Thursday, October 12, 2006

    British Housing Market Strong Again

    Remember California and Great Britain have a 99% Housing Market Price Correlation. We're just a year or so behind..............

    RICS UK Housing Market Survey September 2006
    12 October 2006

    45.1 percent more Chartered Surveyors reported a rise than a fall in September, up from 34.9 percent in August, and more than double the long run average of 21 percent. RICS estate agents reported that price rises are being driven by a combination of would-be buyers returning to the market and the limited availability of property.

    Price increases were again led by London and the South East, boosted by the a booming City economy, with rising investor confidence pushing the stock market to its highest level since May. Estate agents report that ‘gazumping’ is taking place amid prices in the capital rising at the fastest pace since January 2000. Elsewhere, a ripple effect is taking place across the country with house prices in the North West and East Anglia picking up sharply, while Wales, Yorkshire and Humberside also recorded price rises.Buyer enquiries rose for the sixteenth consecutive month, the longest run on record.

    Above trend economic growth combined with a strengthening employment market continued to boost buyer confidence but the rise is the smallest since April 2006. New instructions to sell property fell for the fourth month in a row, at the fastest pace since June 2002, indicating that households feel under little pressure to put their property on the market.Optimism in price rises is at its highest since October 2004. However, surveyors expect a modest slowdown in sales activity as interest rates are expected to rise again.

    RICS UK Housing Market Survey September 2006

    It's all about how confident the buyer feels, and once the fundamentals kick in, the U.S. should see stabilization and growth again.

    Tuesday, October 03, 2006

    Dow Hits All Time High

    To quote Larry Kudlow, this is the greatest story never told. The economy is strong despite the main stream media's lack of acknowledgment................

    Dow Industrials Close at a Record
    Falling Oil Lifts the Mood,Which Is Far TamerThan at High in 2000
    Hope for Goldilocks Economy

    When the Dow Jones Industrial Average last closed at a record, on Jan. 14, 2000, it was a time of exultation. A lot has changed since then.
    After flirting with the record for days, the Dow Industrials finally topped it yesterday, pushed higher by the hope that falling oil prices will support consumers and the housing market. The average rose 56.99 points to squeak past the old record close of 11722.98 with a finish of 11727.34. Throughout the market, the mood was more skeptical than during those heady days more than six years ago.

    "A lot of people who were bearish are throwing in the towel and turning more positive," said David Briggs, head of stock trading at Federated Investors, a Pittsburgh mutual-fund group. "A lot of people have been sitting out this dance, and before we top out, I think we are going to get them in."

    By E.S. BROWNINGOctober 4, 2006 -WSJ

    Monday, October 02, 2006

    New Homes Sales up 4.1%

    It's Not All Bad News On The Housing Front

    "The Census Bureau reported that sales of new homes rose 4.1% in August from a month earlier, to a seasonally adjusted annual rate of 1.050 million. The unexpected jump ran counter to other recent data depicting slowing sales."

    From WSJ 9/27/06