Monday, October 27, 2014

‘Student Society of Real Estate’ monthly meeting
When: Wednesday, October 29, 2014
Time: 5:00PM – 5:45PM
Where: PB 023 Conference Room (Peters Business Building)
Who: All students who are interested in Real Estate, Construction Management, Finance, Entrepreneurial and other related industries
Topics:  Updates on recent event networking experience, participation in internship opportunities and RE Bootcamp.  Review of the Spring 2015 classes that satisfy real estate license, entrepreneurial certificate and RE/Urban Land Economics degree.  Consideration of Spring officer elections.
Come join us and enjoy refreshments and good fellowship!
Look forward to seeing you this Wednesday,

Diane Ray
President, Student Society of Real Estate

Sunday, October 19, 2014

2014 Fresno Housing Market Symposium - Friday, 10/17/14

Gazarian Real Estate Center on the campus of California State University, FresnoSelma Hepp, Senior Economist, California Association of Realtors

  •  Low mortgage rates, lending loosening, affordability still good in our area
  • Distressed sales less than 10% of market
  • Investors leaving creating more opportunity for buyers needing financing
  • Overall home ownership rate has stabilized
  • International demand for housing in CA is strong from Chinese
  • Construction is up
  • Economic growth is accelerating
  • unemployment rate 5.9%
  • Constructions jobs up in last 12 months
  • 248,000 new jobs in Sept
  • affordability is worsening
  • home ownership rate for 18 to 34 yrs old still falling
  • household formation is VERY slow
  • US has become a Rental Nation
  • Millenials delaying "adulthood" and staying put longer, student loans, dim job prospects
  • Baby boomers delaying retirement, not selling and staying longer
  • Inventory low
  • lots of competition for existing housing stock
  • affordability constraints
  • lack of down payment
  • lack of information about the home buying process
  • fear of financing
  • unemployment fears
  • 2013 1.9%, GDP
  • 2014 4.5% GDP growth
  • Consumer spending has not recovered.  Big ticket items not  being purchased yet
  • Possible lack of spending in government spending
  • Unemployment in California has dropped more than any other state
    • labor participation rates dropping more than most states
    • we have more retirees retiring at a faster rate
    • younger people not working and staying home and not participating
    • largest % of people lost jobs in 2007 more than since 1948
      • we've recovered all the job loss of 8.9M jobs
        • it does not cover all the new people coming into the job force
        • most job recovery in Cali was in Bay area and technology jobs
  • Fresno is 4th in job growth in the state due to tech jobs
    • Fresno ranks 2nd in high job growth at 9.2% from 2010 v YOY at 4%
    • Types of Jobs
      • NR/Mining 31%
      • Admin Support 11%
      • State Gov 10%
      • Transportation, Warehouse 7.4%
  • In California, San Francisco #1 and San Jose #2 for retail jobs and e-commerce
  • Job growth in the order as follows for growth in the state
    • Construction
    • Admin & Support & Waste Services
    • Professional, Scientific & Technical Services
    • Information
    • Ed Services
    • Leisure & Hospitality
    • Real Estate Rental & Leasing
    • Retail Trade
    • Wholesale Trade
    • Health Care & Social Assistance
    • Durable Goods
  • Consumer confidence Uncertain
  • $47.3 Billion total value of ag crops
  • employment is record high
  • $2.2 Billlion cost of drought
  • Ag income has been growing
  • GDP 3% growth
  • Nonfarm Job growth 2.2%
  • Unemployment Rate 5.8%
  • Consumer Price Index 2.2%
  • Real Disposable Income % Change 2.6%
  • Nonfarm Job Growth 2.4%
  • Unemployment rate 6.7%
  • Population Growth .9%
  • Real disposable income 3.8%
  • 2009 TO 2012
  • young adults living with parents increased dramatically 23% are 18 to 24 and 19% are 25 to 34
    • average assets recovery
      • under 40 has not recovered
      • 40 to 61 somewhat recovered
      • 62 + has recovered
  • income had decreased for each age group
    • 15 to 24 -8.9%
    • 25 to 34 -12.3%
    • Boomers are good and up
  • Plans to buy a home are decreasing since summer of 2013
  • Residential mobility rates are on the decline even before recession
    • millennial especially
    • 35 to 44 next group
    • 45 to 60 next group
  • Real Estate still considered the BEST Long Term Investment
    • Real Estate
    • Gold
    • Bonds
  • Sales in California are slightly sagging below 400,000 which is the benchmark
  • 55.5% recovery in home prices in Fresno only
  • Equity Sales are at 90.6%
  • Short Sales are at 4.9%
  • REO at 4.1%
  • Fresno 15%
  • Glenn 19%
  • Kern 10%
  • Madera 19%
  • Merced 14%
  • Sacramento 12%
  • Tulare 19%
  • Stanislaus 12%
  • Price appreciation growing at a much slower rate allowing first time home buyers to compete
Demand Side
  • housing affordability was at historic highs
  • lot of investor purchases
  • low rates hurt investment alternatives
  • international buyers
Supply Side
  • little new construction for last 5 yrs
  • underwater people stuck
  • mortgage lock in effect
  • no inventory to move up
  • foreclosure pipeline drying up
  • investors renting instead of flipping 80%
  • off-market (aka "pocket listings") listings
  • 11% in California total = 275,000 homes
  • 2.2% near negative equity share

Forecasts of 30 year Agencies
  • FNMA 4.4%
  • FDMC 4.7%
  • Mortgage Banker Association 5%
  • NAR 5.1%
  • CAR 4.5%
FICO scores are trending downward at 625 score

is the Achilles heel of the economy for California due to too high costs and especially impact on jobs, neighborhood growth, neighborhood stability and economic growth,
Down 30% in California and 57% in the US.  Most people moving to Texas.  More high paying jobs and people are coming to California.  For each percentage point equates to 25,000 homes.

Income required to buy a median priced home in CA (Peak v Current)
$93,593 for min income average which is up approx. $38,000 pushing people out of the market.

Under 35 dropped the most significantly

Fresno at 54%
Kings 64%
Madera 55%

First time buyers went from 38% to 30%

median price home for Fresno $204,000, up 10.8%
median time on market 28 days
residential home sales up YTY .7% and down .9% MTM.

Sales down annually and monthly, $205k median priced home, up 8% in pricing
City of Clovis Sales up $280,000

CAR is looking at a 5.2% increase in price change over the next 12 months


John Bonadelle, Bonadelle Neighborhoods
Jared Martin, Keller Williams
Rob Melfe, VP, Appraisal Manager, Rabobank
John Shore, Community Housing Council of Fresno
Selma Happ, Sr Economist, CAR

John Bonadelle, Bonadelle Homes - seeing a larger family home and lower rates are allowing them to purchase larger home.  He's having a hard time with land available to build.  Permitting still take a month or more and sometimes longer.

Unrealistic land prices are causing issues with building.  Cities are not widening their boundaries causing the dirt to increase in price.

Sanger and Madera growth occurring as a result of Fresno;'s non expansion.  Lack of skilled labor is slowing production and causing people to move out of the industry which is causing a slow down in production.

Builders are going to have to expand to new markets to survive.  Competition is going to be vicious.  Southwest Fresno will be noticed now.  Products and lots will become smaller due to the economic growth and the lack of affordable land and space.

Rob Melfe, Appraisal Manager, Rabobank

The median price range has to be compiled by a lot of information rather than one segment.  The most popular method of tracking is the median price.

There is NOT one price fits all.  The median value when used to measure trending is a mathematical distortion. 

The median price is a statistical point which fails to work in the analysis of any one price tier analysis of properties, much less an individual property.

1004 MC - worst form created!  Used as the precipitous of the appraisal.

A median price is nothing more than a line bisecting the total of all sales prices, one half above and one half below.  It NEVER represents the price movement of Any One Property.

John Shore, Community Housing Council -
Subprime ruined the market and HUD did not raise their loan limits at the time when the market was moving fast.  Congress could not enact quick enough to keep up with the market.

 The Role of the Housing Counseling Agency - Homeownership is the platform for a Quality of Life!

  • 1968 HUD founded Housing Counseling Agency
  • 1972 HUD approved Housing Counseling Agencies
    • Pre purchase education and counseling
    • Preventing mortgage default
    • Non-delinquency post purchase
    • HECM (Reverse Mortgage) Mandatory Counseling
    • Locating, Securing & Maintenance Rental Housing
    • Shelter or Services for the Homeless
    • Help to find loans
  1. 2012 HUD establishes the Office and Housing Counseling as part of Dodd-Frank Act
  2. 2013 HUD mandated to establish certification requirements for counselors (Dodd Frank)
    1. Financial Management
    2. Property Maintenance
    3. Response
    4. Fair Housing Laws
    5. Housing Affordability
    6. Mortgage and Rental Default
  3. Benefits
    1. Not all lenders have or know about all programs
    2. Not all realtors are aware of all programs
    3. A Non-profit provides a trusted advisor
    4. HUD Agencies provide mandatory education classes
      1. HECM- Reverse Mortgage Counseling
      2. FHA - Back to Work Program
      3. FHA - HAWK Program - Homeowners Armed With Knowledge
      4. Most Bank CRA Proprietary loan programs (Community Reinvestment Act)
      5. Most City, County and State
  4. Where are we Headed?
    1. 2004 Homeownership 69%
    2. Zillow study shows March 2014 65%
    3. 80% of renters believe homeownership is a good financial decision
    4. 68% of renters believe its a good time to buy
    5. Affordability in Fresno 54% and 33% Statewide
  5. Barriers
    1. Credit Issues
    2. Lack of Down Payment
    3. Unsure of the Future
    4. Fear of Process
    5. Lender Regulations - CFPB
  6. Single Biggest Mistake
    1. I don't qualify
    2. Be prequalified by 3 lenders
    3. Get mortgage ready today
      1. enroll in a financial management class
      2. follow an action plan
Information gathered by Christine Cerda, Realtor at Guarantee Real Estate


Median Price of Home Listings Sold in Fresno & Clovis at a 12 Month High

The median price of home listings sold in Fresno & Clovis increased by 15% from September 2013 to September 2014.   

If you have any questions on his information or want specific information on the Fresno/Clovis Real Estate housing market, please contact Greg Maroot at 559-994-0254.

Maroot Properties herein deemed this information is reliable but not guaranteed; representations are approximate, individual verification recommended. Real property transactions information listed above is limited to Fresno MLS listings and may exclude total number of real property transactions which occurred in the marketplace

Saturday, October 18, 2014

2014 Housing Market Symposium - Fresno Bee article

Fresno Bee article:

Housing market slowing down, fewer millennials buying homes

For the full article please click here

Monday, September 29, 2014

Is the Housing Market Stagnating or Alternating? You decide.

Posted: Saturday, September 20, 2014 9:11 am


Although the return of stability to the housing market has helped lift many underwater homeowners back into positive home equity and encouraged other owners to move up to larger or more-costly homes, the recovery lacks the robust participation of one important group: young first-time buyers.

According to the U.S. Census Bureau, the share of homeowners 25 to 29 dropped to 34.1 percent in 2013 from 40.6 percent in 2007. It's tough to come by reliable data on first-time homebuyers, but real estate and mortgage experts say they are seeing fewer in the marketplace.

"There are multiple reasons for the lack of participation in the housing market by first-time buyers and, unfortunately, I don't think the situation is likely to change in the near future," said Rick Sharga, executive vice president of "The main culprit is that the age cohort of first-time buyers, who are normally 25 to 35, was hit the hardest by the recession. Unemployment is still high among that age group and the jobs they do have are often at low wages or are even part-time."

Jason Furman, chairman of the Council of Economic Advisers, said at a recent Zillow forum that the unemployment rate among millennials, generally identified as those born between 1980 and 1995, reached a peak of 14 percent in 2010. However, the unemployment rate in this age group now is 9 percent, still higher than other age groups.

Employment is not the only reason millennials are avoiding homeownership, however. Other factors such as tougher loan standards, student loan debt and a lack of affordable homes are having an impact. Researchers also are looking into whether a long-term attitude shift away from homeownership is occurring or whether millennials simply are delaying buying a home along with waiting longer to get married and start a family.

Obtaining a mortgage

"One of the biggest issues keeping first-time buyers out of the market is the difficulty in obtaining a mortgage," says Anthony Hsieh, founder, chairman and chief executive of "More than 90 percent of all loans today have support from the federal government, compared to 40 percent of all loans in 2003. This means that there's a lack of creativity and a lack of selection of loan programs that could help first-time buyers."

Hsieh points out that the average credit score for approved loans has risen above 750 for loans guaranteed by Fannie Mae and Freddie Mac. In the early 2000s, a credit score of 700 was enough to earn the lowest interest rates and fees; now that credit score barely is acceptable.

"The primary reason that first-time buyers aren't participating in the housing recovery is tight underwriting standards for home loans," says Lawrence Yun, chief economist for the National Association of Realtors (NAR). "FHA loans were traditionally available to help renters buy homes, but the FHA has drastically raised the mortgage insurance premiums on these loans so they're less affordable."

Hsieh says that FHA insurance premiums were raised as a result of problems with borrowers defaulting on loans, but that new buyers are paying the price for those mistakes.
"The pendulum has shifted from fast-and-loose to too-tight mortgage lending standards, and at the same time the economy is not conducive for young renters to become buyers," says Nela Richardson, chief economist for "Labor force participation among young people is lower than normal, and even those that are working are hurt because median income has stagnated while prices have risen."

Unable to save

Another issue that works as a double-edged sword for buyers is higher rents. According to research by Zillow, renters during the first quarter of 2014 spent 30 percent of their incomes on rent. In many high-cost cities, that number is higher.

"While higher rents are an incentive to buy, renters also have a harder time saving up for a down payment," says Stan Humphries, chief economist for Zillow.

Student loan debt also is holding back potential buyers because repayment of that debt sometimes precludes saving money to buy a home.

"People with student loan debt are much less likely to become buyers, in part because of the [federal government's] new ability-to-repay regulations that set a hard cap on borrowers' debt-to-income ratio at 43 percent," Sharga says. "Young adults with relatively low wages and high levels of student loan debt won't qualify for a loan."

It used to be that having a student loan meant you were more likely to buy a home because it meant you had a college degree and therefore a higher income, but now having a student loan reduces the likelihood of becoming a homeowner, Richardson says. The impact of the debt depends a lot on the size of the loan.

Many first-time buyers turn to FHA loans because of the low down-payment requirement of just 3.5 percent, but Hsieh says that the higher mortgage insurance premiums and low maximum loan amount in many areas make these loans less appealing to many borrowers. However, conventional loans are harder to qualify for and typically require a down payment of at least 5 percent. The median sales price in the D.C. region in July was $530,000. A minimum down payment of $18,550 would be required for an FHA loan or a minimum down payment of $26,500 would be required for a conventional loan. In addition, buyers need cash for closing costs and emergency reserves.

Inventory decrease

Even those borrowers who do have the income, assets and credit to qualify for a loan will find headwinds on the supply side, because fewer homes are available on the lower end of the market.
"Inventory for the lowest-priced homes has decreased while prices have increased," Richardson says. "At the same time, there's more competition with cash buyers, both individuals and investors, for less-expensive homes. The whole notion of a first-time buyer purchasing a fixer-upper and using sweat equity to build up an asset is pretty much gone because these buyers can't compete with all-cash offers."

"Builders are still building very limited numbers of homes, so they need to make them bigger to make them more profitable," Sharga says. "At the same time, they're not seeing a lot of demand from first-time buyers. As the job situation improves, housing prices will normalize and the builders will start building more homes for first-time buyers, but it could be years before that happens."

Zillow's Housing Confidence Index continues to show consumer aspiration for homeownership. In the most recent survey, 4 million people said they wanted to buy a home within the next year.

"While millennials marry later and have kids later, once they take those steps, they look a lot like earlier generations," Humphries says.

Government boost?

The FHA is piloting its Homeowners Armed With Knowledge (HAWK) program beginning Oct. 1, in which first-time borrowers who participate in housing counseling approved by the Department of Housing and Urban Development before they make an offer on a home, as well as before and after settlement, can get a reduction in their mortgage insurance premiums.

Hsieh says that although anything in the direction of making it easier for first-time buyers to qualify for and afford a loan is helpful, he thinks the changes are not coming fast enough.

"It could be very dangerous to have a lack of first-time buyers for five or six years, because it could be even harder for them to buy in a few years when affordability is lower because prices have risen and interest rates are higher," says Hsieh, who thinks the government should act quickly to encourage lenders to come up with creative solutions to the first-time-buyer problem. "If you can get a $7,500 tax rebate to buy an electric car, there should be some kind of incentive to focus on homeownership," he says.

"The best solution is a growing economy," Richardson says. "There's only so much any program can do to encourage first-time buyers until the labor market improves and wages go up."

Sunday, September 21, 2014

First 'Student Society of Real Estate' meeting of semester

When: Wednesday, September 24, 2014
Time: 5:00PM – 5:45PM
Where: PB 023 Conference Room (Peters Business Building)

Who: All students who are interested in Real Estate, Construction Management, Finance, Entrepreneurial and other related industries

Topics: Networking opportunities at upcoming Gazarian Real Estate Center events, real estate industry classes and internships, getting acquainted with other like-minded real estate students.
Come join us and enjoy refreshments and good fellowship!

Look forward to seeing you Wednesday,

Diane Ray
President, Student Society of Real Estate

Wednesday, September 17, 2014

City of Fresno's General Plan Update


invites you to a town hall event to discuss

City of Fresno's 
General Plan Update

Date:    Monday, September 22, 2014 
Time:   5:30 P.M.
Location:  Bullard High School Theater
                     5445 North Palm Avenue 
                     Fresno, CA 93711

For more information contact 
Saulo Londoño at 559.440.8364

Saturday, September 13, 2014

Central Valley Real Estate Forecast and Reception

The Fresno Association of REALTORS®
invites you to attend 


Friday, September 19, 2014
5:00 pm – 7:30 pm
Fresno Convention Center, 848 M Street 

Featuring Special Guest

Leslie Appleton-Young 
Vice President & Chief Economist
California Association of REALTORS® 
Leslie directs the activities of the 
Association's Member Information Group. 
She oversees the analysis of housing 
market and brokerage industry trends, 
broker relations, and membership 
development activities. She is also closely 
involved in the Association's strategic 
planning efforts and is a well-known 
speaker in California’s real estate 

RSVP by calling FAR at (559) 490-6400 
Please RSVP by Sept. 15

Parking $7

Homeownership Fair

Homeownership Fair

Date:             Saturday, September 20, 2014 
Time:            9:00 AM - 4:00 PM
Location:      Fresno Convention Center 
                        848 M Street Fresno, Ca 93721

Presented by 
Fresno Association of Realtors
California Association of Realtors
Wells Fargo Home Mortgage

For more information click here.

Friday, September 12, 2014

Fresno Bee Article : 2014 Housing Market Symposium

Fresno Bee Article : 2014 Housing Market Symposium
Featuring Keynote: Selma Hepp

To view the Fresno Bee article please click here.

Friday, September 5, 2014

Gazarian Real Estate Center 2014 Housing Market Symposium

The Gazarian Real Estate Center  presents
2014 Housing Market Symposium

  Date:    Friday, October 17, 2014

  Time:   8:30 A.M. - 11:30 A.M.
                                                 *registration begins at 7:30 A.M.

 Location:  Alice Peters Auditorium
                      5245 North Backer Ave 93740 
                      Craig School of Business
                         California State University, Fresno

    Title Sponsor: Rabobank

  Sponsors:   Urban Land Institute - San Francisco
                          Northern California Chapter-Appraisal Institute
                          Fresno Association of REALTORS®
                          Fresno Economic Development Corporation

Keynote speaker:    Selma Hepp, 
                                       Senior Economist, 
                                       California Association                                                             of REALTORS®

Panel Session:        John Bonadelle, CEO, 
                                     Bonadelle Neighborhoods

                                     Selma Hepp, Senior Economist, 
                                     California Association of REALTORS®

                                     Jared Martin, Executive Committee 
                                     Member, Fresno Association 
                                     of REALTORS®

                                      Rob Melfe, Vice President 
                                      Residential Appraisal Manager

                                     John Shore, Executive Director, 
                                     Community Housing Council of Fresno

To register, please email Gazarian Center Associate Director Jacqui Curry at 

Saturday, August 30, 2014

High Negative Equity Among Gen-Xers Causing Housing Gridlock

To Recover or Not to Recover.... Creative Solutions is the future of real estate.... read on!

High Negative Equity Among Gen-Xers Causing Housing Gridlock

High Negative Equity Among Gen-Xers Causing Housing Gridlock

According to Zillow's latest Negative Equity Report, high negative equity among Gen-X homeowners is causing gridlock in the U.S. housing market.

Nearly 43 percent of homeowners between 35 and 49 are underwater on their mortgages. In contrast, only 15 percent of millennial homeowners (those between 20 and 34 years old) and 31 percent of baby boomers (50 to 64 years old) are underwater.

This storehouse of negative equity among the two older generations limits millennials from homeownership mainly because of the ripple effect created when underwater homeowners have trouble listing their properties for sale: baby boomers may not be able to find move-up buyers for their homes because Gen-Xers are stuck with troubled mortgages, Zillow reported. In turn, millennials can't move into the more affordable starter homes currently occupied by Gen Xers. In other words, the very types of houses young first-time buyers would be most able to afford are not hitting the market, and millennials are increasingly getting priced out.

Zillow found that among all homes with a mortgage nationwide, 28 percent that are valued within the bottom third of home values were underwater in the second quarter. This compares to about 16 percent of homes in the middle tier and 9 percent in the top tier.

All ages combined, more than a third of homeowners with a mortgage are effectively underwater and unable to sell their homes for enough profit to comfortably, meet expenses related to selling, and afford a down payment on a new home, the report stated.

Zillow's chief economist, Stan Humphries, said the recession is largely to blame, having most crippled the homes the majority of Gen-X bought.

"On the surface, the housing recession did not overtly impact millennials' housing wealth to the degree it did Generation X and the Baby Boomers," Humphries said. "Most millennials were likely too young to have purchased a home during the bubble years. But as this huge generation begins to consider buying homes, they're entering a market still very much in recovery and far from anyone's definition of normal."

Because so many homes are stuck in negative equity or are effectively underwater, the inventory of homes for sale is severely constrained, Humphries said. This leads to increased competition for homes and the frank reality that many millennials are simply too young and too new to the workforce to have saved up significant money to compete with more established older buyers.

"The reality is, negative equity is part of the new normal," Humphries said. "Finding creative solutions to keep homes affordable, available, and accessible to [millennials] will be critical going forward."

About Author: Scott Morgan

Scott Morgan
Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.

Thank you!

Thank you 

Lance-Kashian & Company 
Tracy Kashian and Nick Kazarian

for a great presentation on 
"The Square at Campus Point"

For the article in the Collegian please visit: 
The Collegian

For the article in the Fresno Bee please visit: 

Fresno Bee

Lance-Kashian & Company "The Square at Campus Point" description please visit: 

The Square

Please join us for the next Gazarian Real Estate Speaker Series 9/24/14 featuring Darius Assemi, President of Granville Homes. For more information or to register, email Gazarian Center Associate Director, Jacqui Curry at 

Friday, August 29, 2014

Next Gazarian Real Estate Center Speaker Series 9/24/14

The Gazarian Real Estate Center Speaker Series presents

Westlake Master Planned Project
Granville Homes
Darius Assemi, President

Date:             Wednesday, September 24, 2014

Time:             11:30 A.M. - 1:00 P.M.

Location:     PB 192 University Business Center
                         Craig School of Business
                         California State University, Fresno

Series Sponsor:    Central Valley Community Bank

Lunch will be provided and seating is limited. 
To register, please email Gazarian Center Associate Director Jacqui Curry at 

The Square at Campus Pointe - Gazarian Real Estate Center Speaker Series

Collegiate article:

Campus Pointe retail phase the core of creating ‘college-town,’ developer says

For the full article please click here

The Square at Campus Pointe - Fresno Bee Article

Campus Pointe construction moving quickly, main street open to walkers – 

Construction of The Square at Campus Pointe is moving along quickly with the retail center’s main street already open to students walking to class. The shells of five buildings flank the street and tall palm trees tower over the sidewalks. Parking will eventually surround the center.  Fresno Bee article

Monday, August 25, 2014

Number of New SFR Property Listings for Sale in Fresno & Clovis at a 12 Month High

The total number of new SFR home listings for sale in Fresno & Clovis has seen an increase of 8% from July 2013 to July 2014.

If you have any questions on this information or want specific information on the Fresno/Clovis Real Estate housing market, please contact Greg Maroot of Properties at 559-994-0254.

Maroot Properties. herein deemed this information is reliable but not guaranteed; representations are approximate, individual verification recommended. Real property transactions information listed above is limited to Fresno MLS listings and may exclude total number of real property transactions which occurred in the marketplace.

Friday, August 22, 2014

Econometer: The Question Of The Week: What Do Falling Yields Mean For The U.S. Economy?

EconoMonitor : EconoMonitor » The Question Of The Week: What Do Falling Yields Mean For The U.S. Economy?

The benchmark 10-year Treasury yield closed under 2.35% last week, the lowest in more than a year. Oil prices are soft as well these days, with the spot price for West Texas Intermediate slipping into the mid-$90 range for the first time since early February. Some pundits are also pointing to last week’s flat retail sales report for July as a signal for arguing that the US economy is headed for trouble. The New York Post over the weekend “reviewed” the numbers and decided to invoke the “R” word, advancing this gem of empirical analysis to drum up fear on Main Street: “During recessions and weak growth, energy prices do fall.”

The pessimists conveniently ignore industrial production’s better-than-expected gain for last month, but a dark outlook isn’t easily distracted. It may be tempting to assume the worst in some circles, but it’s still premature to claim that the US economy is slumping. Sure, you can torture the data to say anything you want, but the old game of cherry-picking numbers in the short term is as unreliable as ever for analyzing the business cycle. In fact, a broad, diversified set of indicatorstells us that the US economy was growing at a moderate pace through July, and the latest batch of figures doesn’t challenge the trend. Looking at retail spending through a meaningful prism, for instance, suggests a middling performance relative to recent history. The year-over-year change for retail sales is a moderate 3.7% gain through last month–a touch above average based on annual changes over the past year.

The initial macro profile for July is nearly complete and the data still look encouraging, including the all-important growth in payrolls of late. Will August tell us otherwise? Probably not, at least based on the early clues available so far.

The 10-year yield is sliding primarily because demand for safety around the world is on the march again–for reasons closely linked to elevated geopolitical risk beyond American shores. The US dollar is still the world’s reserve currency and so the return of a risk-off environment draws investors to the world’s proxy for “risk-free” bonds.


Sure, the US economy may ultimately stumble, but there’s no sign of that yet. There’s always a plausible scenario that could wreak havoc. Meantime, the cold, hard reality is that making high-confidence decisions about major turning points for the business cycle takes time and requires more than a handful of discouraging economic releases. Keep in mind that there’s always a weak sector to raise doubts about the overall trend. For the moment, the main slice of wobbly behavior is housing. But even here, there’s little to suggest that residential real estate is in high-risk territory as it relates to the economy overall.

All of this could change, of course, which is why monitoring the business cycle requires constant attention. Europe’s latest macro troubles represent a new risk. So, too, does the new wave of turmoil in the Middle East and the smoldering Ukraine crisis. It’s all raw material if you’re trying to write a dramatic column for the local tabloid. But history suggests in rather strong terms that you’re better off watching a broad set of economic and financial indicators before declaring that recession risk is high. This is one of the few lessons that stands the test of time in macroeconomics.

It’s also true that a robust econometric model for analyzing the business cycle is more or less worthless for columnists. Sure, there’s another recession coming. But it’s pretty clear that it didn’t start in July 2014. August probably won’t be a turning point either, unless we see a horrific reversal of fortunes in the yet-to-be published data for this month. Possible? Yes. Probable? No.

This piece is cross-posted from The Capital Spectator with permission.

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Wednesday, August 6, 2014

Fed and FDIC Complete Review of Bank “Living Wills”

To be or Not to Be, such is the question we ask of our 11 Banks says the Federal Government on the topics of Crisis Management and Bank Failure
Resolutions... read on!

Fed and FDIC Complete Review of Bank “Living Wills”

Fed and FDIC Complete Review of Bank “Living Wills”

The Board of Governors of the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) announced Tuesday that they had completed the review of the second round of resolution plans submitted by 11 large banks.

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that banking organizations with total consolidated assets of $50 billion or more periodically submit resolution plans to the Federal Reserve and the Federal Deposit Insurance Corporation. The plans are commonly referred to as “living wills”.

Each plan must describe the company's strategy orderly resolution in the event of the failure of the company or severe financial distress. The 11 firms in the first wave of filers include Bank of America, Bank of New York Mellon, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street Corp., and UBS.

The agencies noted that the review of the resolution plans highlighted some improvement on from the first submissions in 2012. However multiple common failures still remain that must be addressed in the submissions next year.

These common failures include: “assumptions that the agencies regard as unrealistic or inadequately supported, such as assumptions about the likely behavior of customers, counterparties, investors, central clearing facilities, and regulators.”

Another defect noted was “the failure to make, or even to identify, the kinds of changes in firm structure and practices that would be necessary to enhance the prospects for orderly resolution.”

The letters to each first-wave filer detail the specific shortcomings of each firm's plan and the expectations of the agencies for the 2015 submission. The next installment of plans is due no later than July 1, 2015.

About Author: Derek Templeton

Avatar of Derek Templeton
Derek Templeton is an attorney based in Dallas, Texas. He practices in the areas of real estate, financial services, and general corporate transactional law. His experience includes time as an Attorney Adviser for the U.S. Small Business Administration and as General Counsel for a nonprofit organization in Dallas. A self-avowed "policy junkie," he has a keen interest in the effect that evolving federal policy has on the mortgage, default servicing, and greater housing industries.