Following the report this week of another strong month of job growth in February the noteworthy news for This Week in Real Estate centers around the increasing speculation of just when the Fed will raise interest rates. Also, a very fascinating report offered by Goldman Sachs about millennials and how they will impact the economy. Below are a few of the highlights from the first week in March that influence our business:
* U.S. labor market flexes muscles as February payrolls soar. The jobs report released Friday confirms that the U.S. labor market is continuing an impressive, if not historic, favorable run. The 295,000 gain in payrolls for February solidly outperformed the consensus expectation of 235,000. This is particularly impressive when you take into account the range of recent headwinds confronting the U.S. economy, from disruptive weather to a relentlessly stronger dollar. February was the 12th straight month of job gains exceeding 200,000, the longest such run since 1994. Equally impressively, this report increases the three-month moving average to around 290,000. The unemployment rate dropped two-tenths of a percentage point to 5.5 percent, the lowest since May 2008. Full Story… http://www.reuters.com/article/2015/03/06/us-usa-economy-idUSKBN0M20E620150306
* Wall Street firms more convinced of June rate hike. Many of Wall Street’s biggest banks are more convinced the Federal Reserve will raise interest rates in June after a strong February jobs report on Friday pointed to sustained economic growth and as the jobless rate hit a more than 6-1/2 year-low. “The strength of the jobs data today argues in favor of the Fed allowing itself the flexibility to soon drop the word ‘patient'” from its statement, said Dana Saporta, economist at Credit Suisse, who expects a June rate hike. Full Story… http://www.reuters.com/article/2015/03/06/us-usa-fed-reuterspoll-idUSKBN0M22DB20150306?feedType=RSS&feedName=businessNews
* Property tax rates highest for homeowners who have owned between five and fifteen years. It seems that taxes on real property reflect not only the value of the property itself, but also how long the owner has held title. That was one finding of a study released this week by RealtyTrac, which it called its ‘first-ever U.S. Property Tax Rates Report.’ RealtyTrac cut the data in several ways and came up with some interesting findings. First, it found that owners of very high end and very low end homes pay the highest property tax rates. The report found significant correlation between years owned and tax rate. The report found that homeowners who have owned 5 to 15 years had the highest effective property tax rates while those who have owned more than 20 years had the lowest effective property tax rates. The average effective property tax rate was 1.35 percent for homeowners who have owned between 10 and 15 years, and it was 1.34 percent for homeowners who have owned between 5 and 10 years. Meanwhile, the average effective property tax rates was 1.18 percent for homeowners who have owned less than 1 year, and it was 1.15 percent for homeowners who have owned more than 20 years. Full Story… http://www.realtytrac.com/news/home-prices-and-sales/property-tax-rates-highest-for-homeowners-who-have-owned-between-five-and-15-years-own-high-end-or-low-end-homes/
* Goldman Sachs just nailed millennial homebuying. The Millennial generation is the largest in U.S. history and as they reach their prime working and spending years, their impact on the economy is going to be huge. Millennials are poised to reshape the economy; their unique experiences will change the ways we buy and sell, forcing companies to examine how they do business for decades to come. “As millennials enter their peak home-buying years, their reluctance to enter the housing market could change. The cohort’s sheer size, plus its desire to settle down in the future, could lead to a surge in home sales.” Millenials have come of age during a time of technological change, globalization and economic disruption. That’s given them a different set of behaviors and experiences than their parents. Full Story… http://www.goldmansachs.com/our-thinking/outlook/millennials/index.html?cid=tw-or-mil-3
Have a productive week!