Gary's Blog

Sunday, January 31, 2010

Fourth Quarter Data Very Encouraging

Check this out, the economy boomed in the fourth quarter of 2009, growing at the fastest pace in more than six years. The GDP expanded at an annual rate of 5.7% in the fourth quarter, the second straight quarter of growth.

Many analysts predict slower, but positive growth for the upcoming year. They expect a rate closer to 2.5 to 3% in the current quarter, and 2.5% for the year.

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Thursday, January 28, 2010

Federal Reserve to Keep Record-low Rates

The Federal Reserve pledged yesterday to keep rates at the record lows (of ZERO PERCENT!) for the Federal Funds rate, the rate banks charge each other for overnight loans.

The Fed did say that business spending on equipment and software seems to be rising. And it said economic activity "continues to strengthen". If these assessments prove accurate, we will soon see small increases in this rate.

Now is the time, if you qualify, to borrow money, at these record-low rates. Maui real estate buyers, if on the fence, now is the time to get off!

Home Sales UP 5% for 2009

Total sales of previously occupied homes closed the year at 5.16 million units, up about 5% from 2008! That was the first a nnual sales gain since 2005. Granted, we all know prices dropped for the year. The average was 12.4% for 2009 vs. 2008. We actually did see home prices on a nationwide basis rise last summer.

In another report, inventory of unsold homes on the market fell about 7% to 3.3 million units. That's a 7.2 month supply at the current sales pace, close to a healthy level of about six months.

This is great news for owners and sellers of Maui real estate. For prospective Maui real estate buyers, it appears there will be no better time than now. Sellers are still anxious, and discounting dramatically. Inventory is still high enough that there is a good selection. Interest rates are at the lowest level on record. The Canadian dollar is stronger than it has been in decades.

I see the perfect storm, and I am ready to help all those who want help!

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Sunday, January 24, 2010

Leading Indicators Index Up Again

The U.S. Conference Board announced Thursday that December's Index of Leading Economic Indicators rose 1.1%, over 50% higher than economists projected. This is the latest suggestion that growth could pick up this spring.

China declared it is over the global crisis and signaled a shift in focus to controlling inflation. Economic growth accelerated to 10.7% in the final quarter of 2009, driving the full-year expansion to 8.7%. The strong numbers keep China on a course to replace Japan sometime later this year as the world's second-largest economy after the U.S.

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Thursday, January 21, 2010

More Signs of Recovery

Wells Fargo sees signs of life in lending, but they are way ahead of their competition. Wells said it earned $394 million, or 8 cents per share, in the 4th quarter of '09, which surprised analysts who were expecting a loss of 1 cent per share. This is partly because Wells has already aggressively written down bad loans made before the downturn.

Banking analysts say that losses from failed loans historically peak six months after the end of a recession. That could mean lending will pick up again in the second quarter of this year.

Great news for Maui real estate buyers!

On the national real estate front, housing construction may be making a comeback as well. We have seen two consecutive months of growth in applications for new building permits. December saw an 11% increase to an annual rate of 653,000, a far stronger showing than economists had predicted.

If these economists would just get out of the way with their dire predictions, I think our economy could rebound even faster!

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Tuesday, January 19, 2010

Recovery Stronger than Expected!

That is the title of the top of the business section of today's Maui News. The article explains how the Asian economies are near pre-crisis growth. Great news for the U.S., as we export to those booming economies.

We all know everything moves in cycles, and thanks to God that you and I have survived this one!

Ok Maui, I am ready for a great 2010 in real estate!

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Friday, January 15, 2010

Fed Survey- Good News

The survey of the Federal Reserve's twelve regions painted a picture of a growing economy. Ten of the Fed's 12 regions reported that activity had increased or conditions had improved. The remaining two- Philadelphia and Richmond- described economic conditions as mixed. In the Fed's previous survey one month ago, eight regions said activity had increased, or conditions improved.

This helped lift the DJIA again.

The survey also found the manufacturing activity increased or held steady in most Fed regions.

To sustain the recovery, the Fed is expected to leave the key bank lending rate at the record low near zero when it meets next on 1/26-27.

The housing market is healing, though most sales involved lower-priced homes. And in most parts of the country, home building stayed at low levels.

What does that mean? With still growing U.S. population, we should be seeing housing shortages in years to come.

One of my prospective clients quoted some wise words recently: "If you invest in the stock market, you live like a king and die like a pauper. If you invest in real estate, you live like a pauper, and die like a king!"

I resemble that remark!!

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Wednesday, January 13, 2010

Four Seasons at Wailea Wins Five Diamond Rating

For the 19th year in a row - ever since the resort opened- The Four Seasons at Wailea has won the AAA Five Diamond rating, including 2010. Only one restaurant, La Mer at the Halekulani, has a longer string of the coveted and hard-to-attain ratings - 20. Only one other resort on Maui won the award - the Ritz-Carlton, Kapalua, for the 14th time.

We are proud to represent some of the finest real estate in the world here in Wailea, with the top-notch resorts right there for our enjoyment just a few minutes from home!

I'm sure you can understand why people often ask me, after I come home from a vacation: "Where does a person who lives and works in Wailea, HI go for a vacation?!"

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Monday, January 11, 2010

Maui Real Estate is Cheap!

I am looking at comparable sales, doing Broker Price Opinions for lenders, and see the prices are hitting below values of 2003-2004.

And the future looks bright:

The number of people claiming first-time unemployment benefits barely rose last week, after falling to its lowest level in 18 months the previous week. And the four-week average of claims fell for the 18th straight week.

On another report, retail sales in December displayed signs of life, rising 2.8% compared with a year earlier.

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Thursday, January 7, 2010

Stock Rally Suggests Strong Year

The stock market posted robust gains on the first trading day of 2010. That was a result of a very encouraging report on manufacturing activity released Monday. The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index read 55.9 in December after a 53.6 in November. A reading above 50 indicates growth.

What is interesting is when the S and P index rises over 1% on the first day of the year, 86% of the time it finishes the year higher. The Standard and Poor's index rose 1.6% on Monday.

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Friday, January 1, 2010

Happy New Year to Maui Real Estate Owners!

I am spending Christmas and New Years Day in California, and am very encouraged by what I am hearing and seeing from my associates here in Orange County. As we all know, if we want to know what is to come in Maui's real estate economy, we can just look at what is happening in Orange County.

The buyers are finding it difficult to find a good deal here in Orange County. The "fixer-uppers" are getting multiple offers as soon as they come on the market. The buyers are feeling confident that the economic woes of '08-'09 are coming to an end.

Wall Street apparently feels the same way. 2009 ended the Dow Jones Industrial Average down only 1.1% for the year.

Also, Jobless benefit claims fell to the lowest level since 2008 last week, sparking hope that the job market could be on the mend.

Happy New Year, from your resident Maui Optimist!

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