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DAYTONA REAL ESTATE INVESTMENT NEWS

Daytona USA Economic News ~ May 3, 2017

Money ~ Just The Facts


NEWS BRIEF


Wall Street: 
Bull Market Explodes with Euro Involvement
Blue Sky Investing at its Best - PE's 20 to 25%.

US Federal Reserve Bank:
FED ignores Retail Sales at -0.2% and a
Failing USA Real Estate Economy

Slide Show:
America's May 2017 Future

Real Estate: 2017


Real Estate:
Real Estate Sales are Flat at +1.33% Average
thru March 2017. Primarily Due Interest Rate Increases.

Wall Street
America's Future
Statistics & Comments
USA Home Prices Down and Flat with a Average +1.33% Sales for 2017

 

Wall Street: STOCK MARKET
The Stock Market goes wild and the Euro follows. High Price to Earning Ratio's are currently about 20 to 25 Times the Company Earnings. Years ago a 8 to 12 Times PE was considered High. The bottom line is, Ride the Wave, there is no equity or security for your investment.

THE GLOBAL MARKET
The Global market rebounds with the influence of Wall Street. Is there any instant value in the Global Market? Probably not it is just reacting to Wall Streets lead.

GOVERNMENT
FED Chair Janet Yellen a Democratic Appointee
of the past Administration buys off on a disastrous USA First Quarter of 0.7% Growth.

FED did not raise rates at May meeting as they look forward to June 2017.

The FED Chief chose to ignore the Interest Rate increases by the FED in December 2016 and March 2017 and increases to mortgage rates from August 2016 fueling the low 0.7% growth rate for the USA. 

The end result of the USA economy is also shown as lack of consumer confidence in Retail Sales ease below Zero, -0.2% with major retail stores closing some of their stores in 2017. Retail Sales in America is not only crucial to America but also Globally as over 70,000  USA Companies have moved over seas since the mid 1990's.

Real Estate growth of Home Sales for the First Quarter is barely above Zero at a 1.33% Average.
This result has a direct influence on the American Family and America's overall purchasing power.

History proves that when interest rates are moving up the thrust of the USA Consumers wait and do not buy.

Americans Personal Debt is Up 129% that includes Mortgages, Car Loans and Credit Card debt. More interest rates more debt may be a secondary reason.

Now that America is crashing from the FED  moves in the last 9 months the FED shifts there focus to the Unemployment Insurance Rate that eased down to 4.5% or to 7 Million 135 Thousand 256 Hundred American workers in April. The US Bureau of Labor Statistics "Actual Unemployment Rate" is 9.4% as of January 2017 or 14 Million 141 Thousand 460 Hundred American workers out of work today.
 
This is again being totally ignored by the FED.
The FED in the last 8 years has increased their debt from -800 Billion to a incredible -4 Trillion 500 Billion. The FED is planing to Write Down some of that debt. The FED's attitude is let's just erase it, now that the money is spent. Spent for what?

A FUTURE FINANCIAL OUTLOOK
Editors Viewpoint: 

The USA Economy is depressed except for the wealthy who have substantial cash to buy the impact of the USA Depression and add  American's loss to the wealthy plus column.

Unlike the stock market, real estate, under a normal set of circumstances takes a year or period of years to appreciate to a future value that can be used in exchange for purchasing power.

At the retail level, it appears there is no room for lowering prices and there is no demand for retail sales to develop at a normal growth rate for even the major retailers.

Why?

There is not enough wealth to support sales growth in America. The law of large numbers indicates a small amount of wealth spread among a large amount of people (153 million, USA work force) can result in more leveraged purchasing power for the Country. Americans need purchasing power to move the economy forward.

Adverse government action stifles future American growth.
 
_______________________________________

REAL ESTATE FUTURES 
Prime Lending Rates:
Higher interest rates is not the answer. Rates need to decrease under 4% to bring the market back to a growth level anytime soon. A possible scenario that may work would be back up to the growth level of rates 3.5% as they were in mid 2016 and then look at easing them up annually at .25% if necessary, to maintain a healthy level of growth in the real estate market.

_______________________________________

 

USA ECONOMIC DATA AS OF 
 up to May 3, 2017


May 3, 2017
The TRUMP Trek begins to Restore America.
Obama leaves a trail of Debt for Americans.

US NATIONAL DEBT: SINCE 1-20-2017

-$19 TRILLION 896 BILLION Down
90 DAYS  Down  -$84 BILLION
National Debt:  Notes
In 2008 the National Debt as of January 9, 2008 was 9 Trillion 719 Billion. The National Debt has more than Doubled in the last 9 years. The National Debt went down in the last 90 days!

US GDP GROSS DOMESTIC
PRODUCT:

+$18 TRILLION 986 BILLION
90 DAYS DOWN -7 BILLION

US DEBT TO GDP RATIO: -104.78%
Improved in last 90 days +.80%
USA Debt exceeds USA Income.


Obama has increased the USA Dollar Supply
-963 Billion in 12/31/2016 
-813 Billion       5/03/2017 Improved
 150 Billion less dollars printed
in the last 90 days. IMPROVED 15% Lower

Cost to each Taxpayer 12/31/2017
an additional -$2,962.00  Annual.
Down to         -$2,428.00  3/28/2017
With no apparent Benefit to the USA Taxpayer.

As of 1/31/2107
The above negative ratio indicates that
the USA is spending more money than produces. The Obama Administration and Congress is -$592 BILLION OVER THE 1 TRILLION 100 BILLION US 2016 BUDGET. Expressed as a percentage that is
53.81% ^
over budget. The Obama, US War chest is 548 Billion. The USA is not a healthy economy at this time. Americans Living in Poverty exceed 42 Million or 12.96%. Americans Living off Food Stamps is also over 42 Million. Both sets of number encompass different Americans with some duplication.


December 31, 2008 Comparison (year end)

US NATIONAL DEBT:

-10 TRILLION 447  BILLION

US GDP GROSS DOMESTIC PRODUCT:  

+13 TRILLION 976  BILLION  

US DEBT TO GDP RATIO: +35.46%

The above positive GDP Ratio reflects a USA economy that has produced more than it has spent.   


BOTTOM LINE:    1/31/2017

WORSE   2008 TO 12/31/2016      -41.83%
January 31,2017                            -41.15%

THE USA ECONOMY IS OVER     -40.00%
WORSE AS OF JANUARY 31, 2017  THAN
IT WAS IN DECEMBER 31, 2008. Improving
This does not include random Money printing.


AVERAGE INFLATION RATE
COMPARISON

YEARS                INFLATION RATE AVERAGE
2017  Average.            2.5%    Moderate Low
2009 TO 2016              1.4%    Recession

2000 TO 2008              2.9%    Moderate


America as a Democracy powered
by Capitalism should have a positive
"Growth At A Rate".
In order to do so a 2.5% Inflation Rate is Low and a 3.5% Inflation Rate is Moderate when compared to USA history and the current Global Economy. See World News page grid.
_______________________________________

EXIT BENCHMARK: 3/28/2017
USA Full Time Employment Needed:
1 Million 215 Thousand Americans
To get back to 2008 Actual Unemployed Level
_______________________________________
As of 1/10/2017:      EXIT BENCHMARK
US Budget Deficit: -5 Trillion 645 Billion
Social Security:    -15 Trillion 619 Billion
Medicare:              -27 Trillion 720 Billion
Additional Unfunded Liabilities+ National Debt
                               -55 Trillion 777 Billion
Liability Per USA Taxpayer
$875 Thousand 156 Dollars as of 1/10/2017


 

USA HOME BUYER AND SELLERS
The overshadowing effect of the FED in comparison to the TRUMP USA recovery plans is slowing any potential rebound that could be started this year.

TRUMP and the FED Chair Janet Yellen have two different points of view. The FED Chair Yellen indicates the FED is independent of America political tone.

This is true to some degree. But also we need to keep in mind that the Federal Reserve Bank is the Central Bank of the USA.

Let's also look at the fact that the Central Bank is out of control with it's lending, spending and accounts receivable.

Simply put, basically the  FED's negative balance  has increased -3.4 Trillion Dollars since 2007. Today it is -4.5 Trillion dollars and should be around -1.1 Trillion approximately the US budget for the year.

Probably the best FED Chairman the USA has ever seen is Alan Greenspan who presided as the FED Chair for 19 years. 1987-2006

He adjusted America's focus in the Ronald Reagan, George Bush, William Clinton, Geaorge W. Bush Administrations. In each of these Admins he adjusted the FED's focus to America's future based on the current administrations goals.

Greenspan had Main Street America, USA Housing and Wall Street in the forefront. After Greenspan left office in 2006
Main Street  America was abandoned for Wall Street and Global Market influences to date.

The Greenspan economies are the best long term economy the USA has seen. Greenspan's two successors have not been successful in strengthening the USA economy to date. This is also a role of the Federal Reserve Board Chair and Governors.
______________________________________
Trump Speculation per Thousand Dollars:
Trumps Initial Plan:
$1000.00  Earnings
  +280.00. Inflation at 3.5% over 8 years
$1280.00   Earnings in 8 years
______________________________________
   $500.00   Expenses for the $1000. Earnings
   +140.00    Inflation at 3.5% over 8 years
   $640.00    Expenses in 8 years
______________________________________
   +$13,440. End Game per $1000.00 of Income
______________________________________
                    Benchmark for Real Estate                               Appreciation 7.5% Annual
______________________________________

$100,000     Home Value 1/1/2017
$178,347     Estimated Value 1/1/2025
+$78,347     End Game Per $100,000
                    Real Estate Invested
______________________________________
$100,000     Stock Market Investment
$152,308      Yield Estimated at 5.4% Annual
+$52,308      Per $100,000 Invested in the market.
or
+   $5,230      Per $10,000 Invested in the market.
_______________________________________

PRODUCTIVITY JOB GROWTH

USA ANNUAL INFLATION RATE
Trump Target 2.5% to 3.5%

2017 +2.5%  Base of Moderate
2016 +1.3% Recession
2015 +0.1% Depression
2014 +1.6% Low Recession


2017 is a 3 Month Average
for January and February.
Courtesy of
RETV.News

Inflation Rates 2014-2015
Courtesy of
US Bureau Of Labor Statistics

_______________________________________

Compass

Market News

House

WILL EURO MARKET INVESTMENT YIELDS  RUN  UP WITH WALL STREET LOW MORTGAGE INTEREST RATES EDGE UP 1% OVER LAST 9 MONTHS  HOME SALES ARE CRUSHED BY FED AND MORTGAGE RATE HIKES 

REAL ESTATE APRIL 2017
  HOME PRICES LOWER AS
RATES ARE UP 1%
4.25%


FED MAY RAISE PRIME RATE
TWO MORE TIMES IN 2017
CRUSHING REAL ESTATE SALES AND RETAIL SALES GROWTH

  

USA HOUSING SALES DOWN
 FOR FIRST QUARTER AVERAGE
OF 1.33% FOR  2017

USA AVERAGE HOME
QUICK QUALIFIER INFO
4/30/2017

Median Individual's Income
2017 - $30,125. v
2000 - $28,408. =
Estimated Average Family Income
2016 - $56,516
USA Home Median Price
3/31/2017 $236,400
Loan Amount $189,120

Income to Qualify with 20% Down $4709.66 Month (or $56,516. Annual)
Loan Rate 4.20% 30 due in 30 Yrs.
Payment $925.00 a Month
Taxes and Insurance $249.00
Other Debt $533.33
$1707.33 PITI and Debt per Month
Ratios
24.92 / 36.24
The reason the model above still qualifies with the higher interest rate of +1.0% is because home prices have decreased about -$9,600 since July 2016

Underwriting Variance is estimated
upward at +2%
Ratios
33 / 38

Cash Down Payment required is
estimated at $47,280. plus closing cost and cash reserves.

Note:
Red indicates a Potential Deficiency
Average Family Savings $9,550.00 v

Home Loan Point Cost Est Retail Rate
30/30 -417K 0% 4.20%
5/25 -417K 0% 3.22%
15/15 -417K 0% 3.46%
30/30 +418K 0% 4.15%
Point Cost 0%
FNMA FHLMC
Commercial 7 Yr. Fixed Due in 20 $6,000,000. 0%  5.95%
Prime Rate 4.00%
Fannie Mae
60 Day Delivery 30/30 YR.
3.57%
3.65%
2.94%
  5/03/2017
  1/09/2017
  7/27/2016

USA HOME FORECLOSURES REPORTED

Foreclosure Filings in 2016 -17  507,141 v
    Courtesy of RETV.News. 5/3/2017
Foreclosure Filings in 2015 - 1,100,000
Foreclosure Filings in 2014 - 1,100,000 
              Courtesy of Realty Track


SPECULATION:

The FED and its resources are manipulating the numbers, utilizing interest rates primarily  that they did use as a control during the proceeding socialist focused administration from 2009-2016.

This is keeping Americans in the tight squeeze they are in and controls basically middle income or working Americans from participating in a USA Capitalistic economy.

Fannie Mae and Freddie Mac are the two largest Mortgage Banks in the USA. Both are still under the US Government Conservator ship.

The result is, that they are not in really moving with the market. They are moving under the control of the Government.

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