New Stimulus Dovetails With Shift at Fed

Whether they will or they won't depends in part on who "they" are.

One of the biggest questions looming for 2012 is whether the Federal Reserve will pursue more extraordinary measures to ease monetary policy, on top of its already lengthy list of efforts to stimulate the economy.

The better tone of economic data lately might suggest the Fed is due a breather. But the changing composition of the Fed's open market committee—the group that sets interest rates—hints at the opposite.

 

The voting members of the FOMC are constantly in flux. This is part design, part politics. The committee is composed of 12 members—the seven members of the Fed's board of governors plus the president of the New York Federal Reserve, and four of the 11 remaining regional presidents on a rotating basis. There are only 10 members serving at present because Congress has refused to confirm some of President Obama's appointees to the Fed board.

With the president having just nominated a new bipartisan pair of economists—Jeremy Stein and Jerome Powell—to help appease Congress, it is possible the Fed board could be filled next year. That may have less impact on the Fed's monetary-policy actions, however, than the rotation of regional bank presidents. Among the four losing their vote are the FOMC's three most hawkish members—Narayana Kocherlakota of the Minneapolis Fed, Richard Fisher of Dallas and Charles Plosser of Philadelphia—all of whom spoke against the Fed's latest bond-buying program and voted against it.

Those gaining a vote, meanwhile, are John Williams of the San Francisco Fed, Cleveland's Sandra Pianalto and Atlanta's Dennis Lockhart, all considered more dovish than the outgoing group. That leaves the final incoming member—Richmond's Jeffrey Lacker—as perhaps the lone uber-hawk in 2012. That is why many strategists are betting the Fed will ultimately green-light new measures if the economy remains lackluster.
Of course, officials could decide to resist further stimulus moves to avoid appearing too aggressive in an election year. But that seems unlikely given the concern core members like Chairman Ben Bernanke have voiced about high unemployment and the mediocre economic outlook.
If push comes to shove at in 2012, there will likely be fewer pushing back.

WSJ Ahead of the Tape | By Kelly Evans | Published December 30th, 2011

Why Real Estate Agents are at Risk for Theft and How to Prevent It

Open houses are becoming targets for thefts more often, and real estate agents are at risk of losing valuable items, as are the homeowners.

As a real estate agent, you’re inviting the public to a property, which is an invitation to anyone, from thieves to those who might want to harm you.

A common tactic thieves use at open houses is teamwork and distraction. Linda Powers of Specialists Real Estate in Las Vegas told her story of such an encounter on Realtor.org.

“Last year I was holding an open house on my listing, and four women walked in and said they were sisters and looking for a home for their mother. Two of them walked out to the yard while I stayed with the others.

“The two in the yard then called me outside because they had a few questions. When we walked back in, the gals stayed a little longer talking and asking more questions about the house.

“It wasn’t until the next morning that I noticed my debit card and a few dollars missing. They managed to spend a few hundred dollars before I canceled the card. I found out later that these ladies had been making the rounds around Las Vegas doing the same to other agents while sitting on their open houses.

“Needless to say, I now keep my wallet in the trunk of my car. It also helps to do open houses in twos, especially when the home is lived in and has things to steal. This economy is bringing out the worst in people.”

SAFETY TIPS

There are preventative actions, such as those mentioned by Linda, that will help you protect yourself from theft.

Promote security in your advertisements.
When you advertise the open house, note that identification will be required at the front door and video surveillance will be in use. “The bad guys will be less likely to show up,” Siciliano says.

Partner up.
When would-be assailants see two people at the front door, they’ll be less likely to go in. (Read one agent’s story how the buddy system protected her).

Introduce yourself to neighbors.
Let them know you’ll be showing the house so others know that you are there.

Watch for patterns.
At an open house, note any patterns in arrivals, particularly near the end of the open house. One common scam: Thieves come near the end of the open house, working as a team. They have “buyers” distract the agent as others steal valuables in the home. (Read what happened to one sales associate.)

Stow away your valuables.
Never leave your purse, laptop, or wallet unattended on the counter in plain view. Keep them in the trunk of your car. However, always keep your cell phone on you so you can call for help if you need to. Also, before the open house, tell your clients to put away all of their valuables, prescription drugs, and mail.

Home Sales Up in November

New home sales rose 1.6% in November, to an annualized rate of 315,000 units. This is the second highest rate in 2011. The video below from CNBC discusses this increase in sales:

Shadow Inventory Down by 16% From Last Year

The shadow inventory of distressed properties owned by lenders and not on the market decreased 16% from this time last year, according to a report released by CoreLogic today. The 1.6 million homes not on the market represent a five month supply.

A one month supply in a shadow inventory is more ideal for the housing market, but this is still an improvement over October 2010. This month last year there was a seven month supply.

California is among the six states that make up half of the current shadow inventory, along with Florida, Illinois, Texas, New Jersey and New York.

Fed Leave Rates Unchanged - What Does This Mean?

Wall Street Journal commentators discuss the effect of the Federal Reserve’s decision to leave interest rates unchanged in the video below.

Ten Ways to Volunteer with Your Kids This Holiday Season

The holiday season is filled with media messages to children that getting is more important than giving.

Contributing to your community and volunteering with your kids during this time of year can be a great way to give back, bond as a family, and teach your kids important life lessons.

Karen Bantuveris, CEO and Founder of VolunteerSpot, created a top ten list of volunteer activities to do with your family:

For younger children:

• Decorate reusable grocery bags and fill them with their favorite non-perishable food items.  Feeding America offers a  Food Bank locator, searchable by zip code.
• Stuff new, warm socks with water bottles and granola bars to give to homeless men and women you pass on street corners.
• Decorate holiday cards for soldiers overseas.
• Box up their gently used clothing to donate to your local foster care foundation.

Older Kids

• Donate their gently used books and DVDs to a local children’s hospital.
• Make holiday decorations and cards and then sing carols for nursing home residents. Call ahead to schedule a visit.
• Engage a team of secret friends to clandestinely rake leaves or shovel snow for an elderly neighbor for a whole month.
• Collect used towels and pet toys for the local animal shelter.
• Host a hot chocolate or cider stand and donate the proceeds to a charity of their choosing.
• Adopt a family for the holidays through a local business or faith group, and have your kids help shop for that family.

These activities suggested by Bantuveris are all great ways to give back during the holiday season, and to include your children in the giving spirit. If you are donating items, bring the children so they feel more involved. More importantly, talk to them about your family experience afterwards and how it feels to volunteer.

This could be the start of a new family tradition!

Three Quarters of Sellers Overvalue Their Homes

The majority of homeowners, 76%, believe that their home is worth more than the recommended listing price their real estate agent suggests. This is up 3% from last year, according to a recent study conducted by HomeGain.

This can be problematic for both sellers and their agents, with homes sitting on the market for far longer than necessary due to an unrealistically high listing price.

The same study showed that 68% of buyers think that homes are overpriced, as well. Almost a third of buyers believe that homes are more than 10% overpriced.

According to the general manager of HomeGain, Louis Cammarosano, “home buyers and sellers continue to remain apart as to home valuations with the vast majority of home owners thinking their homes are worth more than their agents and the market are telling them.”

FHA Loans Difficult for Condos Due to New Policy

A change in FHA policy has caused major problems for condo sellers, buyers, and home owner association boards across the country by making many condos illegible for FHA loans.

This little-publicized change in policy has led to decreased prices and the blockage of refinancing, according to an article in The Real Deal. Condo industry leaders, Realtors, and owners are upset by the series of rule revisions that have caused thousands of condo projects to be ineligible for FHA mortgages.

Many who hoped to refinance or buy a condo are being forced to obtain conventional bank loans with much higher interest rates.

According to the FHA, of the 25,000 condo projects whose certification for FHA eligibility expired between last December and the end of September, only 8.4% have been approved or re-certified.

Some condo boards have faced rejection on simple technicalities in their applications for re-certification. Board members are also facing legal problems due to these new FHA rules. They must sign certification documents that recognize compliance with all local statutes and that they have no knowledge of anything that could lead to a condo owner becoming delinquent. If they are incorrect in this mandatory certification, they can face up to $1 million in fines and 30 years in jail.

The major takeaway from this for unit owners, buyers, and sellers is that if an FHA loan is a part of your plan, check with a mortgage professional and the condo board to make sure the condo project is certified.

70th Anniversary of the Attack on Pearl Harbor - Chapter 23 Pearl Harbor Survivors

Ed McDougall Age 90 USS Oglala



Herb Louden Age 94 USS Solace



Jesse Love Age 89 Ford Island NAS

Larry Petretti Age 88 USS Whitney

IPOs Affect the Bay Area Real Estate Market

Recent successful start-ups becoming IPOs in the Bay Area have improved the real estate market in San Francisco. According to Reuters, San Francisco home prices, especially those in the southern neighborhoods, have benefited from these IPOs.

Tech companies such as Twitter, Zynga and Yelp based in the area have reignited the tech-related identity of the area. Not only are employees suddenly made richer by the IPO, but this tech-hub identity has returned to San Francisco, which it hasn’t truly grasped since the dot-com era.

Competition for modern homes in the southern San Francisco neighborhoods has risen home prices. According to the San Francisco Chronicle, the rise in prices is for three main reasons.

“First, we have the new crop of millionaires finally able to afford what they want from the San Francisco real estate market, all competing against each other. Next, we have the upcoming crop, such as those who stand to make millions from Zynga and Yelp IPOs, about to enter the playing field, making those home-seekers already on the field more nervous–compelling them to bid now, buy now.”

Finally, current homeowners in the area are holding on to their property as they see it rise in value.

Do you think this real estate boom due to successful tech IPOs will continue?

Creative Ways to Retire Without Savings (Who Me?)

Like many baby-boomers today, you may be faced with an upcoming retirement and a lack of a retirement savings account due to the rough economic times of the past few years.

A recent CBS MoneyWatch article tackles this problem by suggesting resourceful ways to make retirement work for you.

One bold idea is to pair up with another married, retiring couple, pooling together Social Security income for a manageable budget. Social Security income at age 66 will be $2,000 per month, with an additional $1,000 per month for the spouse, resulting in a $36,000 per year income.

If you find a like minded couple, consider moving into a three bedroom house together, making the combined household income $72,000. This is higher than the 2009 national average income.

Another tactic is to delay retirement until age 70, in which case your monthly Social Security income will increase to $2,640 per month. In this situation, your spouse would not need to delay past age 66 to receive the $1,000 per month. “You’d want to file and suspend your Social Security income at age 66, so your spouse can start the $1,000 monthly spousal benefit income at age 66,” advised the article.

At age 70, your combined income would be $43,680 per year following this plan. If you were to pair up with another married couple, that Social Security income would increase to $87,360 per year.

Your circumstances may not be right for such an arrangement, but this is just one example of creative and resourceful ways to head into retirement in this economic climate.

The Housing Problem Isn't Getting Better - Maybe it's Time for Scary Thinking

Mortgage banking executive Jerry Selitto, CEO and President of PHH Corporation, questions the approaches currently being taken towards the problems in the housing market. He published an opinion piece, “The Housing Problem Isn’t Getting Better —Maybe it’s Time for Scary Thinking,” in which he suggests thinking outside the box for solutions.

“Sometimes, when nothing else is working, you have to try something that had previously been simply unthinkable,” wrote Selitto in his editorial.

He presents bold ideas for starting over with a new beginning, including government new programs to help distressed homeowners.

Read his thoughts here. Do you agree or disagree?