Posted by: Clayton-Paul Cormier, Jr. | October 2, 2010

2010 Q3 Vermont Real Estate Update

Emerson

The Tables, They’re A Turnin’

Ralph Waldo Emerson, American 19th Century lecturer, essayist, poet & champion of individualism wrote that “A political victory,a rise in rents, the recovery of your sick, or return of your absent friend, or some other quite external event, raises your spirits, and you think good days are preparing for you. Do not believe it. Nothing can bring you peace but yourself. Nothing can bring you peace but the triumph of principles of “Self-Reliance””

Sound words in a season of struggle for so many Vermonters, a time in which month after month, in spite of scattered signs of recovery, local and national economic gurus pull back on their reigns on premature predictions of the revamping of the American Dream.  Despite the murky waters and the loss of equity for so many homeowners across the state and country, opportunists are capitalizing on extraordinary and plentiful options that such a dramatic shift offers. Interest rates at 4.375% on a 30 year note without rising substantially for months in spite of what is inevitable. Sellers finding reasons to move on and get to the closing table, buyers with historic breadth of choice and favorable purchasing conditions. Whether or not we’ve hit bottom, once past a certain point, it becomes a less and less valid question. Action now, sparks that lead to fire, agents of change. Confidence in the face of adversity.

Lawrence Yun, NAR (National Assocation of Realtors) chief economist, says home sales still remain subpar. “The housing market is trying to recover on its own power without the home buyer tax credit. Despite very attractive affordability conditions, a housing market recovery will likely be slow and gradual because of lingering economic uncertainty.”

And Yun, on fallout from the recession continuing to impact commercial real estate markets:

“Vacancy rates are beginning to level off in some sectors, but rent discounts and moderate levels of landlord concessions are widespread,” he said. “This is very much a tenant’s market, which is quite favorable for businesses that are considering expansion. It’s also encouraging that there is a modest improvement in the sentiment of commercial real estate practitioners.”

Timothy Geithner, US Treasury Secretary , a week ago: “You had this huge growth in leverage in the financial system, huge over investment in real estate in parts of the country, and those things made the crisis much more acute. But more relevant for us now, they make the recovery harder,”

unemployment rate, seasonally adjusted

Vermont Unemployment Dropping

“The momentum behind the national recovery seems to be waning. While we are encouraged by the local economic indicators available to us – such as early taxable receipts data and a stable, low unemployment rate relative to the current environment – the economic recovery remains uneven and uncertain. We continue to watch the national front for indications, as well as trends here in Vermont.”    Valerie Rickert, September 21, 2010, Vermont Department of Labor

A major indication?  Check this news out:

DOW up 15%, best third quarter since 1939! The stock market confounds skeptics in the third quarter, ending near its highs for the year with many of the riskiest stocks leading the charge, according to the Wall Street Journal.

Best 3rd Quarter since 1939! Picasso's Bull Market.

The rally that began in early spring gained steam over the summer. The Dow Jones Industrial Average jumped 15% in the latest three months for its biggest quarterly gain since the fourth quarter of 1998 and its best third quarter since 1939.

The Standard & Poor’s 500-stock index gained 137.76 points, or 15%, to 1057.08, in the third quarter, leaving it up 17% for the year and up 56% from its March low but off 32% from its October 2007 high.

The powerful rally came as the economy overall showed signs of stabilization. Corporate profits have come in above reduced expectations, in large part due to cost cutting. It steamrolled concerns that consumers remain hobbled by debt, high unemployment and depressed home prices.

Existing Home Sales, completed transactions that include single-family, townhomes, condominiums and co-ops, increase 7.6 percent to a seasonally adjusted annual rate of 4.13 million in August from an upwardly revised 3.84 million in July, but remain 19.0 percent below the 5.10 million-unit pace in August 2009.

The big gains followed a brutal bear market that hit hardest those companies with the shakiest balance sheets, heavy debt loads and high fixed costs. The Fed responded by cutting interest rates essentially to zero and flooded the credit markets with additional money, buying up Treasurys, government-backed mortgage securities and agency debt.

“There was a lot of talk this summer about a double-dip recession, and while it’s true things have slowed down, the technicals have really changed and it’s a much more healthy environment now.”  Kenny Landgraf, principal at Kenjol Capital Markets.

Maple Sweet Real Estate

Connect to www.maplesweet.com, e-mail info@maplesweet.com or call toll-free 1-800-525-7965 to list your property, arrange for showings, or look further into the real estate market.


Vermont Required Consumer Information Disclosure: please note Vermont  real estate agencies represent Sellers directly or indirectly by default. Buyer representation can be gained for properties not already listed by Maple Sweet Real Estate. To better understand the merits of or arrange for buyer representation, please email or call for further details.
If your property is already listed for sale with another real estate agency, this is not intended as a solicitation of that agency’s listing.

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