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DAYTONA REAL ESTATE INVESTMENT NEWS ~ JULY 6, 2017

Daytona USA Economy and Markets showing signs of a Recession. 


NEWS BRIEF ~ JUST THE FACTS


Wall Street: 
Wall Streets 2017
Current High Investment Yields


US Federal Reserve Bank:
FED increases Interest Rates despite poor Economy
2017 USA economics on the Downtrend. FED invokes a Recession.

Slide Show:
America's Future June 2017

Real Estate: 2017


Real Estate:
Current Home Sales are up 1.1% for May 2017
Home values are down from a year ago.

Wall Street
America's Future
Statistics & Comments
Home Sales up Prices go down

 

WALL STREET: .

THE GLOBAL MARKET
Investors are questioning the strength of the Wall Street and Global Investments.


Simply put, the Bull investment market emerged when Trump was elected President.

The reality is that it is a Bear Market and is only being pushed forward by more red ink.

The infra structure of the Trump Plan "Make America Great Again" that Wall Street is relying on is continually being stifled by Washington Bureaucrats.

Wall Street currently is a hot air balloon, ride the wave.

GOVERNMENT:

RESERVE BOARD RATE HIKES 
FED Chair Janet Yellen a Democratic Appointee

of the past Administration reading her press release statement on the +.25% USA Interest Rate Hike on June 14, 2017 said:

" this reflects the progress the economy has made and is expected to make to maximize employment and price stability objectives"

FED Results:
USA Red Ink Zone January thru June 2017

0.08% Retail Sales
Off -4.92% USA Benchmark estimate
Result: Major Chains have Store Closures.


0.56% Real Estate Sales
Off -6.94% USA Benchmark estimate
Result: USA Home Sales are stagnet
Real Estate Loans are also down dramatically.

Auto Sales plummet in 2017 when compared to 2016.
Result: Auto Dealers have to reduce prices up to -20% on some or all makes and models.

The result of the FED's Interest Rate forecast is, mortgage interest rates are estimated at 5.0% by year end 2017 and 6.0% by year end 2018. Basic credit will also increase the same a percentages a +1.0% and +2.0% or more.

Euro Central Bank interest rates are and have been for over the last 12 months -0.0% and +0.0%.

Currently because of the Government controlled Conservatorship of Fannie Mae and Freddie Mac you are not seeing  the actual result of the FED's actions as it applies to the mortgage market..
_______________________________________

A FUTURE FINANCIAL OUTLOOK
Editors Viewpoint: 
The ongoing recession will continue indefinately as the FED moves in this direction.

RETV.News

The FED's viewpoint is that everything is OK because jobs are increasing at 160,000 per month as of May 2017. 


What appears not to be considered is that Jobs are still less than the 2008 figure. Many people hold 2 jobs instead of 1. Average employment income is about 30% less. Most jobs are at minimum wage. Therefore there is no purchasing power remaining.

The FED does not address the fact that if this job increase is a realistic figure why is the productivity "GDP Gross Domestic Product" of America projected to be -1/10th of a percent less for 2017 than 2016 by International Markets. This is a huge negative figure for the USA.

It would appear that if jobs increase then the productivity of products should also increase somewhat. This does not seem to be the end game at this time.

What significance does it have if you produce products that result in standing inventory or reduced productivity?

Is this just another cover to dismiss the FED's adverse actions? America is being priced out of the range of Americans affordability by Political Bureaucrats that are not being responsive to the "Make America Great Again" plan.

Partial Reprint of May 3, 2017 editorial.
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 the 3.50% 30 years rates as they were in mid 2016. Then look at easing them up annually at .25% if necessary, to maintain a healthy level of growth in the real estate market.
_______________________________________

REAL ESTATE FUTURES EXPANDED:
Prime Lending Rate: 4.25% ^
Mortgage Interest Rates edge up during June 2017 to 4.375%. ^

Speculation:
Is America downtrending into another Recession?


A recession may be on the forefront as economic indicators are displaying the USA economy is currently down in all three major financial areas.

Under the projection of the FED to raise interest rates for the 3rd time in 2017, this in all probability will cinch a continuing and another America Recession. This recession is being orchestrated by the FED and Washington Bureaucrats.
_______________________________________

 

USA ECONOMIC DATA AS OF 
 up to July 6, 2017


July 6, 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 963 BILLION Down
180 DAYS  Down  -$17 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 is down in the last 180 days!

US GDP GROSS DOMESTIC
PRODUCT:

+$18 TRILLION 986 BILLION
Last 120 DAYS Up +76 BILLION

US DEBT TO GDP RATIO: -104.49%
Improved in last 120 days +1.88%
USA Debt exceeds USA Income.


Obama has increased the USA Dollar Supply
-963 Billion in 12/31/2016 
-754 Billion       7/06/2017 Improved
 209 Billion less dollars printed
in the last 180 days. IMPROVED 20% Lower

Cost to each Taxpayer 12/31/2017
an additional -$2,962.00  Annual.
Down to          $2,310.00  7/06/2017 est.
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 41 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.            2.45%    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
Total 1/10/2017     -48 Trillion 984 Billion

Unfunded Liabilities      -55 Trillion 777 Billion
National Debt:                -19 Trillion 954 Billion
Federal Reserve Deficit: -3 Trillion 200 Billion

Liability Per USA Taxpayer
$875 Thousand 156 Dollars as of 1/10/2017
NEXT ANALYSIS 1/10/2018
_______________________________________
Not counted above:
US Government IOU's to the American Public +2 Trillion 600 Billion + Yield for all Monies Removed from the Social Security Trust Fund completed without voter approval.
US Goverment War Chest:            +633 Billion
National Debt Annual Interest  is:  225 Billion
_______________________________________
~~~~Forecast from 1/20/2017 to 7/8/2021~~~~

TRUMP ADMINISTRATION
OFFICIAL PROJECTIONS FOR "2021"
BASED ON FIRST 180 DAYS IN OFFICE

US Budget Deficit:  -4 Trillion 984 Billion
Social Security:     -22 Trillion 765 Billion
Medicare:               -28 Trillion 311 Billion
Total 7/8/2021:       -56 Trillion 060 Billion
Unfunded Liabilities:   -49 Trillion 416 Billion
National Debt:              -22 Trillion 734 Billion
 ~~2021 estimates are Subject to Revision~~
US Debt 2017:              -67 Trillion 572 Billion
US Debt 1990:              -13 Trillion 385 Billion


 

USA HOME PRICES:

BUYERS AND SELLERS  
Real Estate Growth and a healthy Buyer and Seller Residential market began disappearing in September 2016 with Fannie Mae and Freddie Mac premature Home Loan Rate increases.


This was in anticipation of the FED increasing rates by the end of 2016. In addition to the December increase the FED indicated it would increase Interest Rates 3 more times in 2017 without any apparent economic cause. 

The USA economy has been at recession and depression economic levels since 2009.

The December 16, 2016 Prime Rate increase by the FED began the current recessionary trend of the USA economy.

This appears to be another Political ploy focusing on the current Trump administration by Washington Bureaucrats appointed to strategic offices such as the FED by the out going 2016 Administration.

The projection for Mortgage Rates by the FED at this time, based on the current FED actions is: 5% by year end 2017 and as high as 6% by year end 2018. This will drive the housing market to be more static than it already is at a 0.56% no growth level for 2017. The 2016 Year end average was 0.40%.

Retail Sales are at a all time low a Major Retailers are closing some of their stores nationwide. It appears that there is less buyers of merchandise.
Retail Sales Average for 2017 is 0.08%.

Auto Sales are below 2016 levels causing Auto Retailers to offer up to a -20% Sticker Price "MSRP" reductions to move standing inventory. 

American do not have money to spend because of the past 8 years of a ill USA economy that is now worsening.

Nothing is being done to correct these issues.
As history will show, Americans will probably stay on the sidelines until the economy begins to emerge in their favor at some time in the future.

______________________________________
Trump Speculation per Thousand Dollars:
Trumps Initial Personal Income Plan Per:
$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 +2.45% Base of Moderate
2016 +1.3% Recession
2015 +0.1% Depression
2014 +1.6% Recession


2017 is a 5 Month Average
for January through May 2017.
Courtesy of
RETV.News

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

_______________________________________

Compass

Market News

House

 EURO MARKET INVESTMENT YIELDS 
RUN UP WITH WALL STREET
MORTGAGE INTEREST RATES 2017  
UP TRENDING AS OF JULY  2017
HOME SALES  PRICE 2017 DOWN
 COMPARED TO JUNE 2016

EURO BANK MARKETS EXPERIENCE
-0% AND +0%
   0% AVERAGE
  INTEREST RATES IN THE LAST 12 MONTHS


Worldwide Negative Growth
2016-2017


FED RAISES PRIME RATE
3 TIMES IN LAST 10 MONTHS,
 
RETAIL SALES DIMINISH TO 0.08%

 US FED Rate Hike to 4.25%, June 14, 2017
Mortgage Loan Underwriting tightens.
  


USA HOUSING SALES DOWN +1.1% 
FOR MAY 2017

 USA HOME SALES FOR  2017 IS + 0.56%

USA Real Estate Growth Non-Existent as Home Prices go Lower

USA AVERAGE HOME
QUICK QUALIFIER INFO
6/30/2017

Median Individual's Income
2017 - $30,125. v
2000 - $28,408. =
Estimated Average Family Income
2016 - $56,516
USA Home Median Price
5/30/2017 $252,800
Loan Amount $202,240

Income to Qualify with 20% Down $4709.66 Month (or $56,516. Annual)
Loan Rate 4.375% 30 due in 30 Yrs.
Payment $1010.00 a Month
Taxes and Insurance $249.00
Other Debt $533.33
$1792.00 PITI and Debt per Month
Ratios
26.73 / 38.05

The dollar difference in the loan payment amount for a 4.375% mortgage is $1010.00 vs. $894.00 or +$116. more per month when compared to a 3.375% interest rate from a year ago.

In addition underwriting guidelines have tightened as rates are planned by the FED to go up to about 5% by 2017 year end.

Underwriting Variance is estimated
upward at +2%
Ratios
33.00 / 38.00

Cash Down Payment required is
estimated at $50,560. plus closing cost and cash reserves of approximately $12,640.00. Total cash required $63,200.00.

Note: 
Average Family Savings of $8,670.00 v
indicates a potential financial ability deficiency to purchase any home over $75,000.
Average USA Familily has exited the home ownership market.

Home Loan Point Cost Est Retail Rate
30/30 - 417K 0% 4.15%
5/25  - 417K 0% 3.25%
15/15 - 417K 0% 3.42%
30/30 +418K 0% 4.07%
Point Cost Lowers Rate
FNMA FHLMC
Retail
Averaged Rate
Commercial 7 Yr. Fixed Due in 20 $6,000,000. 0%  5.65%
Prime Rate    4.25% ^    7/05/2017
Fannie Mae
60 Day Rate Delivery 30/30 YR.
3.62%
3.65%
2.94%
  7/05/2017
  1/09/2017
  7/27/2016

USA HOME FORECLOSURES REPORTED

Foreclosure Filings as of July 2017  501,620 v
Note:The above figure does not include defaults,auctions and repositions as shown  in the annual figures below.
         Courtesy of RETV.News. 6/1/2017

Foreclosure Filings in 2016 -    933,045
Foreclosure
Filings in 2015 - 1,100,000

Foreclosure Filings in 2014 - 1,100,000 
              Courtesy of Realty Track


SPECULATION JUNE TO DECEMBER 2017:

Americans are in the tight squeeze as the governments controls basically minimize the ability to have the of Home Ownership. Middle income or working Americans are finding out that Home Ownership is really becoming an "American Dream" as Americans are not being allowed to participate in a USA Democracy and Capitalistic economy.

The FED and its resources including Fannie Mae and Freddie Mac that are still under government conservatorship after 8 years of the resolved  mortgage crises. The government is manipulating the numbers, apparently, utilizing interest rates primarily to deflate the Home Sales Market since Mid June 2016.  


These measures have been used as a control during the preceding socialist focused administration from 2009-2016 and have not worked to stimulate growth.

Partial Reprint of May 2017
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 mortgage interest rates are not in really moving with the market. They are moving under the control of the Government.

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