By Tony Stevenson/SWBC Mortgage
Economic News Week: February 7, 2011
Last Friday the DOW ended above the 12K mark which was the first time to reach such levels in about 2 1/2 years. With the current Egypt crisis and concerns about oil prices, reaching such levels is a great feat all being considered. The three "E"'s--- -Egypt, Earnings, and the Economy are affecting U.S. and worldwide markets. Here in the U.S. all seems to be heading in the right direction as the U.S. has the most improved economy in the world as reported by the Wall Street Journal. Strong corporate earnings are prevailing and beating most predictions. Auto sales are up across the board. GM reported an impressive 23% increase. Exxon, Visa, and UPS reported way better than expected earnings too. What's happening in Egypt was bound to happen sooner or later when you take into account that folks over there spend 78% of their income dollars on food alone. What's impressive is how the U.S. markets responded in the 'positive' last week. One positive point is that unemployment fell to 9.00% which is proving once again that our economy is on the mend. That is the best level since April 2009. Most economists expected just a 1% decrease for the whole year in 2011 and already it has fallen almost that amount in just the last 2 months. For our economy to keep growing at a faster pace, corporate America has to start hiring more folks. With corporate earnings being what they are, then more hiring shouldn't be too far off. One economist put it this way, "our economy is on track---warts and all." Fed chief Ben Bernanke said, "there is increased evidence of a self-sustaining economic recovery." The Fed chief was unusually upbeat on the U.S. economy's outlook in a speech last week at the National Press Club.
Local Economic News
In his weekly article in the SBJ (San Antonio Business Journal), economist M. Ray Perryman wrote: Although Texas is known as a place of wide open spaces, it's the state's metropolitan areas that drive the economy. The Lone Star State is home to three of the 10 largest urban centers in the U.S. (Houston, San Antonio, and Dallas) and others in the top 20 (Austin and Ft Worth). Mr Perryman also stated that the San Antonio area's relative economic strength include the ongoing contributions of health care, bio science, and cyber security. Austin has recently been noted as among the 10 cities best situated for economic recovery and has been cited by Newsweek for its job growth over the past decade as well as during 2010. These large urban centers are linked to communities across the state through vendor and supplier relationships. Growth in these cities provides opportunities for all Texans Mr. Perymann concluded.
Real Estate and Mortgage Industry News
As mentioned above, I can attest to the fact that what happens in San Antonio has an affect in the Texas Hill Country. One positive affect is that some folks want to buy homes in the Hill Country and commute to San Antonio/Austin. Boerne, Blanco, Bandera, Kerrville, Fredericksburg, Johnson City, New Braunfels are those communities best suited for folks who want the country lifestyle but work in the metropolitan cities. All are within an hours drive to San Antonio and/or Austin. The positive job growth that San Antonio/Austin provide, are welcome and appreciated by Texas Hill Country folks. Finally, "Texas Ranks High For Small Businesses" was a headline in the S.A. Express News. Texas is ranked third-best state for small business by the Small Business and Entrepreneurship council as part of its recent annual Small Business Survival Index. All these factors are reasons why our Real Estate markets should be on the rise sooner than later.
Mortgage rates increased slightly for the 30 year index to 4.81% last week according to Freddie Mac. Once again, rates remain at historically low levels. In my quest to search for Mortgage clients, most Realtors I have talked to have told me that their phones are ringing more and they have had an increase in showings. With lots of inventory remaining and the low mortgage rate environment, home buyers seem to be getting more serious. Buyers are realizing that rates and home prices may not remain this low forever. If this is you, find a local Realtor and Mortgage Loan Officer and let them show you how easy it is to still afford the American Dream of homeownership.