Costa Mesa Real Estate Week In Review

Forecast for the Week: A busy week is ahead, with key reports on inflation, the job market, and more. Plus, the Fed meets.

View: “If you don’t have anything nice to say, don’t say anything at all.” Find out why that old adage is a great rule of thumb for social media.

 On the positive side last week, the Labor Department reported that Weekly Initial Jobless Claims fell 35,000 in the latest week to 353,000, much lower than expected. Durable Orders rose by 1.6%, much higher than expected, while Consumer Sentiment for July also increased. In addition, the first reading on Q2 2012 Gross Domestic Product (GDP) grew by 1.5%, just above expectations.

However, there was some disappointing news: New Home Sales fell 8.4% in June, while RealtyTrac reported that foreclosure activity picked up in the first half of 2012 in 125 of 212 metro areas surveyed. However, 129 of the cities saw year-over-year declines.

The real question to ask is whether the news will cause the Fed to act with additional stimulus (that is, another round of Quantitative Easing or QE3), something they may do if the job market and growth don’t pick up. Remember if an official announcement of QE3 is made, Bonds could suffer (as could home loan rates, which are tied to Mortgage Bonds) since Stocks would likely rally. But at the same time, we live in a complicated world right now. At the end of the day, sluggish U.S. economic growth and global uncertainty will likely continue to support low home loan rates here in the U.S.

The bottom line is that now is a great time to purchase or refinance a home, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

This is a key week for economic data, since the ADP Employment Report and the Labor Department’s monthly Jobs Report will be released. But those are just two of the influential reports due out this week:

• The week’s calendar is packed and the data begins to be disseminated on Tuesday with Personal Income and Spending.
• In addition, the Core Personal Consumption Expenditure will be released on Tuesday. Remember: This is the Fed’s favorite gauge of inflation, so the markets will be watching it closely.
• The Case/Shiller Home Price Index will also be released on Tuesday.
• The hits keep coming on Tuesday with the Chicago Manufacturing Index and Consumer Confidence report.
• On Wednesday, the ADP Employment Report will be delivered along with the ISM Manufacturing Index.
• Thursday’s weekly Initial Jobless Claims report will set up for Friday’s important jobs data.
• Last, but not least, will be Friday’s closely watched monthly Jobs Report, which includes Non-farm Payrolls and the Unemployment Rate.

In addition, the next Federal Open Market Committee (FOMC) meeting is this week, and the statement that will be released on Wednesday could move the markets.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

  When you see these Bond prices moving higher, it means home loan rates are improving — and when they are moving lower, home loan rates are getting worse.

To go one step further — a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds and home loan rates continue to reach record best levels, though they did falter in the latter part of the week. I’ll continue to monitor this situation closely.

Last week, Greek Olympian Voula Papachristou was removed from her country’s Olympic team. Why? Because she tweeted a racial joke using her personal Twitter account. Papachristou apologized, but the damage had been done. The Greek Olympic Committee stated that Papachristou was “placed outside the Olympic team for statements contrary to the values and ideas of the Olympic movement.”

That’s not the first time an offensive tweet has ended badly for a person or business.

Remember the Motor City tweet by Chrysler last year? An employee at Chrysler’s social media agency (mistakenly) tweeted a disparaging remark about drivers in Detroit. The problem? Chrysler had just spent $9 million on a Super Bowl ad as well as an “Imported from Detroit” advertising campaign that promoted Detroit and its people. In the end, the employee lost his job…and the social media agency lost its contract with Chrysler, which means the agency lost several million dollars—all because of a tweet.

While the stakes may not be that high for most people, the fact remains that an offensive tweet can be devastating…and, sometimes, damage cannot be undone.

So how can you avoid such a problem in the first place? Simple. Just follow the old adage: If you don’t have anything nice to say, don’t say anything at all.

Admittedly, that can seem a little restricting. But the idea behind it is to tweet the positive. That advice isn’t new in light of the Greek Olympian or Chrysler examples. In fact, an article on Tech N’ Marketing back in 2009 offered similar advice to business people who were navigating what to say and what not to say on Twitter. The article stated: “Just like you would not share extreme political views, sexist, or offensive views of any kind at an office event, so to on Twitter.”

In other words, if you wouldn’t say it out loud during a business event or meeting, you should think twice about tweeting or retweeting. Just because you read a joke or have a moment of frustration, doesn’t mean you should share it. After all, you may end up offending (and turning away) clients and business associates.

So, instead, tweet about relevant news, answer questions, share tips, and so on. Keep your tweets positive…and Twitter will be a positive experience for you and your business.

  For more tips on using Twitter for business, check out the Ultimate Guide to Twitter Marketing, which features links to numerous topics and articles.

Economic Calendar for the Week of July 30 – August 03