December 22, 2024

San Diego housing market – Today’s video is about a rise in initial jobless claims. How does that affect the San Diego housing market? Actually, in two ways: #1, for the real estate market to build any kind of meaningful base, the unemployment numbers must improve;  #2, watch this video carefully, and you’ll see where the government admits that its’ cash for clunkers program was a failure. It has been my contention that the government’s home buyer credit of $8000, which was modeled after the cash for clunkers program, was also a dismal failure. I believe it’s just a matter of time before one of the regional Fed branches admits this fact like they did today with their cash for clunkers program.

In my June 2, 2011 post: Existing Home Sales Take Huge Drop I said “The problem is there was never any real recovery in the US economy or the US housing market. Both were boosted by artificial governmental stimulus. The $8,000 Federal housing rebate was nice for many San Diego home buyers. But, if that was their main impetus to purchase a San Diego home last year, they may now be sad to know that the value of their home has subsequently gone down well more that the amount of the tax rebate they received.”

In my 10-1-08 post entitled #1 EZ Fix to The U.S. Housing Market I stated:

“For the government to come in with this huge bail-out now, would just prolong the housing decline.  I’d rather see the government stand aside and let the market forces determine the true area average home selling prices.

“For those who think a government intervention is the only way out, I say do it without direct taxpayer money.  The undisputed key to this recovery is housing.  If the government truly wants to ignite a fire under the housing market, I personally would propose a very simplistic approach that would have immediate results.

“The government should pass a bill that allows any home purchaser, owner-occupied or investor buyer, who buys a residential property within the next two years and holds that property for a minimum of three years (and a maximum of ten) to be free of federal capital gains taxes upon selling the property.   The potential, tax-free profits on my idea would be a huge incentive for investors to jump back into the residential housing market.  This increased demand would clear the built up housing inventory in a matter of months for most areas.”

httpv://www.youtube.com/watch?v=e-XtgUl_Auo

CNBC Stock Market Squawk Box (Initial Jobless Claims).

Layoffs remain stubbornly high though longer term trends may be improving if only slightly. Initial jobless claims rose 10,000 in the July 16 week to a 418,000 level that’s slightly higher than expected (prior week revised 3,000 higher to 408,000). The July 16 week is the survey week for the household employment section of the monthly employment report and a comparison with the prior survey week of June 18 shows an improvement but a small one at 9,000. A comparison of four-week averages during the same two weeks shows a smaller 5,000 improvement, to 421,250 vs 426,250.

Other data include a 50,000 decline in continuing claims for the July 9 week to 3.698 million with the four-week average down 4,000 to 3.721 million. The unemployment rate for insured workers is down one tenth to 2.9 percent.

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