Remembering Labor Day

labor day

In my last blog post, I said I would next time discuss jobs in Maryland. With Labor Day just passed, I want to share some thoughts and information in a rather broad way in regard to jobs in this post.

Jobs and Labor Day have a direct relationship, after all. Labor Day became a national holiday with legislation passed by Congress in 1894. The Merriam-Webster Dictionary states that Labor Day is a day set aside for working people. An annual holiday devoted to the recognition of working people’s contribution to society.

I wondered, how is the working person in the US celebrated on Labor Day in the 21st century?

It was first celebrated in NYC in 1882 under the sponsorship of the Knights of Labor, founded in 1866, and the first important labor organization in the US.

Americaslibrary.gov says the day was celebrated with a picnic, a concert and speeches and 10,000 workers marched in a parade from City Hall to Union Square.

labor day paradeA Labor Day parade in Buffalo, New York in 1900
from Americaslibrary.gov

History also says labor unions were created in order to help workers with many work-related difficulties such as low pay, unsafe or unsanitary working conditions and long hours. Unions gave protection to a worker’s right to express political views.

But Lynn Parramore’s recently featured article in Business Insider urges a deeper view of labor history. She says going back 200-400 years you would find that most people did not work long hours. They relaxed during long holidays, took their time eating their meals, and days often included an afternoon nap.

She feels the more accurate perspective is that one of the goals of unions when fighting for the 8-hour day and 40-hour week was to restore what their ancestors enjoyed before industrial capitalists came on the scene. The ideas weren’t new or radical at all.

Although important ground has been gained for the worker, we can see that an antagonism between workers and employers still exist in the 21st century. According to Wikipedia, union density in the American workforce was 20.1% in 1983 and 10.7% in 2016. In the private sector, membership has fallen under 7%. Consider, in contrast, union membership in Germany is 18.1%, it is 27.1% in Canada and Iceland claims an 85.5% union membership.

Sadly, I would also report that the US is the only advanced country with no national vacation policy whatsoever.

vacation policies in the worldprovided by The Atlantic

Data supports, and to me it seems fairly obvious, that even though the New Deal provided a spectrum of support to working people, a changing economy with too much uninspired thinking and policies has resulted in generally downhill trends since the 1980s for the American worker. I have watched economics in the US since the 70s and I have certainly come to hold this view.

But let’s have an authority weigh in. This year on Labor Day The San Diego Union-Tribune Editorial Board shared reporting from The Pew Research Center that indicates the very wealthy, the very poor and the working poor now outnumber the middle class in America and that there is broad agreement among economists that the top 20% of wage earners are steadily pulling away from the bottom 80%. I find this to be a staggering statistic. Imagine for a moment how this is playing out in the marketplace. It is reflected, I believe, in some statistics the US Dept of Labor just reported on.

Their analyses indicate that young people hold an average of 9 jobs by the age of 32 – not exactly a reflection of workforce stability; that from 1969 – 1996, families, on average, experienced a decrease of 22 hours per week of available time to spend with their children; and that American workers get only 7 hours of sleep every night.  That is 365 hours a year less than recommended. And, 1 in 3 adults say their work has been affected by feeling drowsy on the job.

Many would agree we’re living in a world few could have imagined 50 years ago. But even with the dynamic changes that have occurred in this time frame, there are some things that remain important. The US Dept of Labor also reports on what they consider to be the 3 pillars that provide stability in a worker’s life:

Rising economic security over a lifetime – so a worker can have food on the table, a roof over head, health care when needed, and a secure income for retirement.

A work and family balance
– the resources and the time to enjoy family life and meet the needs of children and aging parents.

Workplaces that are safe and fair
– free from health hazards and from discrimination and other unfair employment practices.

If you’re concerned about the downward trends for the American worker like I am, then consider the ideas put forth in the Tribune’s Editorial Board’s article.

education

They propose the reframing of the education process so that it focuses on producing workers with 21st century job skills – and one that helps people throughout their lives, not just when they’re young.

ongoing education

Some of the details include: 1) computer science would become not a high school but a middle school requirement, 2) problem-solving and critical thinking would be emphasized much more and much earlier, and 3) free online, high quality, certificate-granting programs in coding and many other scientific fields could proliferate for adults and children alike. Revisions in America’s education system would give adults a safety net that cushions the blow of losing a job in mid-career and access to retraining.

political parties logos

They sum up by saying there are other solutions touted by politicians from both sides of the aisle – the left says higher minimum wages and free college; the right says tax cuts and regulatory relief  – but none of these, they say, will be the game changer that reorienting the education system would be for the American worker’s revival. I believe, too, that a game changer is, indeed, what is needed.

work in progress
Now, onto jobs in general, and in Maryland, specifically. In 2016, the Baltimore Business Journal  ran an article that featured Daraius Irani, the chief economist at Towson University’s Regional Economics Studies Institute. His data shows the annual average job growth for the next 3 years in Maryland to be 1.18%. Central Maryland will be at 1.09%.

Irani says the fastest growing jobs in Maryland are for carpenters, construction managers, cost estimators, anesthesiologists and registered nurses, in that order. Likewise, the fastest growing industries in Maryland are in construction, educational services, health care and social assistance, administrative and waste management services and accommodation and food services.

According to the US Dept of Labor, some of the fastest growing occupations in the US:

  • computer engineers
  • data processing equipment repairs
  • medical assistants
  • physician assistants
  • securities & financial sales workers
  • computer support specialists
  • dental hygienists
  • paralegals
  • residential counselors
  • database administrators
  • desktop publishing specialists
  • personal care & health aides
  • system analysts

The top 10 occupations with highest earnings:

  • physicians
  • podiatrists
  • dentists
  • lawyers
  • petroleum engineers
  • optometrists
  • aircraft pilots & flight engineers
  • physicists & astronomers
  • aerospace engineers
  • engineering, natural science, computer & information technology

There are factors that will typically influence outcomes and that couldn’t be truer than in a changing domestic economy coupled with the global economy. Consider the following points by US Dept of Labor and see if there may be some opportunities or openings for you in the following ways:

  • Baby boomers make up almost half (47%) of the workforce today. Imagine all the different jobs opening up for you to fill as boomers continue to exit the workforce into retirement.
  • Small businesses employ about half of the nation’s private sector workforce. Do you know who the small businesses are in your community and what they do? Exploring them may open up possibilities for those not interested in long commutes.
  • In 5 years almost half of all workers will be employed in industries that produce or are intensive users of information technology. Information technology AA degrees are reasonably affordable and available at most community colleges. Check into how this 2-year degree could be a launching pad for more advances in employment.

If you’re looking for advancement in your career, good luck and best wishes. I hope some of the info provided here will be useful to you. You may find the Occupational Outlook Handbook, published by the Bureau of Labor Statistics useful, too.

Comments on this or future articles or topics, please write to let me hear from you!

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Real Estate in 2017 – Outlook

the news

Real Estate Market News

Chaotic, exciting, unpredictable? Are these some of the words that come to mind as you try to describe the end of 2016 and the start of the New Year? It’s hard to know how the year will end but energy and movement in many directions are obvious. Anirban Basu, chief economist for a number of organizations around the country, believes chances have increased that the economy will either be unusually good or unusually bad this year.

What makes him feel this way? Donald Trump, newly elected president of the U.S., indicates the country will see a minimum of 3 percent economic growth. For perspective, from 2010 through 2016, economic growth varied from between 1.6 – 2.6%. At least for now, the equity markets are showing confidence in the administration’s pro-business agenda and the perceived ability to engineer a number of major policy initiatives. Economic data is upbeat and business confidence is surging.

How does all this translate for local conditions?

shape of MD

Monthly economic newsletter, Snapshot, reports a mostly positive forecast for Maryland this month. Employment figures are rising, household conditions remain stable and the housing sector continues to see improvements. Consumer confidence in the economy has been sustained by robust job gains and lower unemployment.

Across the state, the housing market has had a strong start. This is a relevant point and a strategic economic indicator because real estate transactions account for over 58 percent of local tax revenue in the state.  As the first quarter of 2017 came to a close, home sales ended on a high note with nearly all jurisdictions recording positive numbers, according to Maryland Association of REALTORS®.

Getting down to county statistics, Frederick County data is staying true in terms of the traditionally slow month of February but with an otherwise strong start in January and a continuing positive trending in March. Solid increases are seen in total sold volume, median sold price, number of homes sold and a decline in the average number of days on the market before going under contract. These are all solid indicators of a stable market.

Washington County has had mixed reviews over a number of years. January statistics were stagnant but February data raised optimism with significant improvements in total sold volume, median sold price and number of homes sold. March, while solid, behaved a bit more sheepish. There was positive gain in median sold price and sharp decrease in the average days on market before going under contract.

Homeownership continues to be an important and sought after goal in the U.S. It provides stability and predictability to families and individuals whereas renting cannot. Homeownership endows an enhanced sense of security. It encourages a higher degree of care-taking of properties – something that benefits all surrounding property owners in terms of preserving values and the ability to have value appreciation that’s on par with overall market conditions. And it lends itself to positive self-esteem and a sense of accomplishment.

homeownership

Mortgage rates are predicted to rise this year but so far the effort has been inconsistent. In historic terms interest rates continue at all-time lows and are currently hovering around 4 – 4.28%.

Assistance in getting started in homeownership is available in many places for those that need the boost and meet the qualifications. Starting with the state, Maryland has an informative guide for its diversity of programs. Read more about it here. Some of the benefits include loan assistance, grant assistance for down payment and closing costs, rate assistance, home credits and homebuying education, to mention a few.

The Washington County area has a diversity of support, some of which comes from The Home Store, and Open Doors.

You can find homebuying assistance in Frederick City and County through such programs facilitated by The Housing Authority, Frederick County and The Dept of Housing and Community Development.

right direction

New loan and assistance programs tailored to meet prospective buyer needs continue to surface each year. The choices can be confusing and overwhelming so it’s important to choose professionals to partner with that will keep your best interests a top priority.  I am a REALTOR® with 20 years experience with condos, single family and town homes, new construction and land purchases. Life may be fast-paced but I still value relationships and I treat your business as if it were my own. I recommend only those lenders that will provide that same level of service and protection of your interests.

Inventory shortages will continue to frustrate some home seekers this year. With more millenials entering the market, there is an increase in the numbers of home shoppers, too. One of the keys to overcoming this problem is to be pre-qualified and ready to make an offer on a home should you find “the one.” Chances are it will not be around long enough for you to start the process once you find it. You should be prequalified and know the specific loan types you qualify for, know your price point and comfortable mortgage payment amount before you even start shopping.

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2016 — a Defining Year

It can’t be said enough, home loans are really cheap. Take a look at this chart:

freddiemac30yrmortgchart 2016
I am overdue on a report on how I feel the 2016 real estate market is doing – it’s the life of a Realtor. When you’re busy, you can’t find time to eat let alone sleep.

2016 seems to be the discernible turnaround year. It’s the year that seems to mark the shift to better, more reminiscent days of economic durability.

The July labor market hiring was strong, wages for private-sector jobs matched their strongest annual pace of growth in 8 years, rising by 2.6%, and more joined the labor force, maintaining a 4.9% unemployment rate. Many economists expect that the gains in incomes, adjusted for inflation, will accelerate later this year and into 2017.

“This was everything you could have asked for, maybe more,” Michelle Meyer, head of U.S. economics at Bank of America Merrill Lynch said.

As a Realtor who has worked through a number of different market dynamics during a nearly 20-year career, I feel the discernible shift to a time more memorable as a healthy market pace. We may have arrived. So much so that I haven’t found my way to my blog all these months.

But vulnerabilities remain.

There will be global concerns over Brexit, the U.S. election, Fed meetings in September, November and December.

If we have learned anything in this slow slog back to more “normal” economic times, it is that patience is a virtue and hope is another. Thoughtful and truly meaningful actions by the American public in ways where we can make some difference are crucial. So vote with your conscience in the presidential election. Continue to demand better wages, work conditions and benefits. Unions should be encouraged – problems may exist with them but they protect livable wages.

I close with this thought, and following resource links:

“It’s been a really good summer for hiring all across the country,” said Tom Gimbel, chief executive of LaSalle Network, a recruiting and staffing firm in Chicago. “Business has been great. Kids coming out of college are getting hired and we’re seeing a lot of activity in the $50,000 to $150,000 category.”

Relevant links:

Forbes.com: Mortgage Rates and Brexit June 23, 2016
The Wall Street Journal: Robust Jobs Report August 5, 2016
The New York Times: Reframing the Economic Outlook August 5, 2016

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Exploring Home Ownership – Steps to Take

There are several steps you can take in your exploration of owning a home. Knowing what will be expected and taking some initial steps can make the process go more smoothly in the long run.

CHECK YOUR CREDIT

Credit companies provide annual free credit reports to anyone requesting one. There are 3 companies (Experian,  Transunion, Equifax) so get a report from each one.

Review the reports for mistakes, unpaid accounts or collection amounts. Paying accounts on time is important. It’s also important to understand the calculation of the amount of credit you’re using relative to your available credit limit, or the credit utilization ratio. The lower the ratio the higher your credit score will be.

EVALUATE ASSETS AND LIABILITIES

So, you don’t owe too much money and your payments are up to date. How do you spend your money? Do you have leftover money every month or are you on a tight budge? You should have a good idea of what is owed and what is coming in and going out.

You should have a minimum employment history of 2 years but less is okay if you have transferred to another job in the same field. Self-employed or independent contractor individuals will need to show a 2-year earnings history.

ORGANIZE DOCUMENTS

When you apply for a mortgage you will need several documents. Use this list from Bankrate to help you compile them: documents for mortgage application.

Buying a home can take some time and patience but knowing what you need can save you time later.

QUALIFY YOURSELF

Ideally, you already know how much you can afford to spend before the lender tells you how much you qualify for. A mortgage calculator from Prosperity Home Mortgage can help you here: estimate mortgage amount.

Find out what you can afford, know how much money you can put down and the third piece, home price, can be worked out with the lender.

FIGURE OUT YOUR DOWN PAYMENT

Most loan programs will require that you, the home buyer, contribute an amount of down payment based on a percentage of the home price. Additional forms of down payment funds may be available to you from a variety of sources such as a gift, borrowing from a 401k or local, state, or federal funds that may be available to assist buyers with qualifying incomes and situations.

You’re now ready to speak with a lender and further explore the home ownership possibility. Check with friends, family or the real estate agent you plan to use to find out which lenders they enjoy working with and why. You will want to ask the lender the questions you have about the process and they should provide you with complete and satisfactory answers. There will be other steps involved in the process and they should give you a basic idea of what you should expect.

This article composed with the help of Bankrate and Prosperity Home Mortgage information and articles.

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Housing Trends in 2016

We look forward to 2016 by looking back at 2015. And in the case of housing forecasts, we typically look back to 2007 for a benchmark view.

2015 housing sales were the highest over the past 9 years. Steady job growth and low interest mortgages helped to maintain a flow of home buyers into the market and for prices to climb.  5.26 million homes were purchased in 2015, a 6.5 percent increase over 2014. At the market’s peak in 2005, sales were at 7.08 million homes, but we shouldn’t expect to return to such a heated volume. The median sales price rose 6.8 percent in 2015. Average hourly earnings are still relatively tepid but are improved by 2.5 percent from 2014.

So, as a result some projections for 2016 feel solid. The optimism factors in the economic engine starts and stalls that were experienced in 2015. There is a weakness we are still working our way through. It is expected to continue and a recession is spoken of as a real possibility now. Previous hints about one have changed to actually expecting it. Inventory is expected to remain tight. Lawrence Yun, National Association of REALTORS economist, forecasts continuing job growth in 2016. His forecast of 2.7 million jobs would exceed 2015 numbers of 2.5 million created jobs.

What else looks good?

  • Gains in housing values should continue,
  • Negative equities should continue to fade. At its worst 17 million homeowners were underwater. By the end of 2016 the number of homeowners experiencing negative equity should be reduced to about 5 million,
  • Mortgage rates should continue to be low and credit guidelines will be easier. Buyers wishing to make home purchases with FHA loans will find friendlier terms because the agency cut its fees last year and there is talk of cutting more soon,

Rents will continue to rise in most parts of the country as demand continues to outstrip supply. This will be a difficult situation for those would-be buyers trying to save money toward the costs of a home purchase.

In addition to the easing of costs in the use of FHA loans for mortgage financing, some lending institutions are coming out with conventional programs that have easier terms and qualifying conditions. These programs may be worth checking out.

If you are interested in making a move this year, it is a good time to do it. There is no obligation to sell when you obtain a market value evaluation on your home. Nor is there an obligation to buy when you find out what your mortgage qualifications are and investigate houses for sale in your stated areas of preference.

For professional real estate service in Maryland counties of Frederick, Carroll, Washington and Montgomery, call Grace Borell, REALTOR with Long & Foster Real Estate office in Frederick, Maryland. Providing serve that seeks to exceed expectations for 19 years.

AgentGrace@mris.com
301-514-3772
MDRealEstate.house

 

 

 

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Starting a New Year: Outlook

Funny what a difference a day makes. While forecasters were feeling all warm and fuzzy about where the stock market would end in 2015, the predictions had a glow about them, too. That was not to last.

As we begin the new year, we now look back on 2015 and the stock market as the worst year since 2008. “It’s a lousy end to a pretty lousy year,” said Edward Campbell, Prudential Investment Management. Although preliminary calculations indicate a total return of 1.4 percent, that is the worst return since 2008 and it is down sharply from the 13.7 percent return in 2014.

There are always many factors that can influence market movement. U.S. employers added jobs at a solid pace in 2015, but with no growth in wages it is a nuanced kind of influence that leaves investors concerned. Consumer confidence, nevertheless, improved. While you will hear no complaints from consumers, the continued low prices in oil, coupled with continued low usage levels, threatens big economies like Saudi Arabia and Russia, whose economy is largely dependent on its processing of oil and gas products. The slowdown in China’s economy makes the news several times each week. ISIS, North Korea’s recent bomb test – all and more play into the activity we see in the stock market.

Analysts say we should expect more of the same in the new year. Recession fears were raised in 2015 but not seen. In 2016 there are no concerns about recession. That means that although the volatility is expected to continue, investments should not experience sustained slides.

Economic growth around the globe remains weak. China’s sputtering economy will keep our eyes focused on it. But resiliency in the U.S. is evident in the consistently strong job numbers throughout 2015. It was the second-best year for hiring since 1999.

Do we focus too much on the stock market? I think so. It is as much  a part of our day as going to work. It is a part of our everyday activity. But it sends pangs of panic with every downward shift and calls for jubilation the following day. It’s a roller coaster and I’m not convinced that’s healthy. The daily grind of its every movement wears on people and makes it hard to relax. But I understand it is an important piece of information we all want to know about.

I want to turn the conversation to the core reason I write this blog – the housing market. How did it do in 2015 and what does it look like for the new year?

I read an interesting piece recently, published by Maryland Association of Realtors economist, Anirban Basu. He feels the slow but steady housing recovery will be sustained in 2016. Because he feels the U.S. is only halfway through its economic recovery, those hoping to get started in homeownership should not be facing sticker-shock because they’ve waited this long to get moving on this goal.

Mortgage interest rates were projected to rise closer to 5 percent by the close of 2015. They didn’t. While appreciation in home values did occur, it did so in a more traditional manner we are accustomed to seeing historically. With slow and steady home value appreciation, sellers will see gains in equity resulting in buyers continuing to see new home sale listings flowing into the market.

Rents are expected to continue to rise because availability is at all-time lows. This will make it difficult for some potential buyers to save money for closing and down payment costs. But new programs are entering the marketplace with these potential buyers in mind. Relaxed credit requirements, use of compensating factors, unlimited use of gift funds and expanded qualifying ratios are some of the new and friendly features of these programs.

I can help. If you need to talk to a professional and find out out more about programs or what the inventory of the kind of home you seek looks like, check with me. My goal is to help you better understand how right or possible homeownership might be for you. I offer my help with a no-pressure mannerism. I know people appreciate it, you may, too. Connect with me today and let’s find out.

 

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Mortgages and the New Fed Bank Rate

I’ve been asked about the Federal Reserve’s recent increase in bank rates by a few clients currently home shopping. They wonder how it’s going to affect the cost of a mortgage. The Fed finally raised the benchmark fund rate on December 16 to between 0.25 and 0.5 percent after nearly 7 years of a near zero rate. The answer is that this increase does not directly impact long-term consumer loans like purchases or refinances. So mortgage rates will not necessarily increase as a result.

The benchmark fund rate is used when banks lend money to each other overnight. It has been held at nearly zero to support the economic recovery  following “the worst financial crisis and recession since the Great Depression,” MLend Financial Group states in a recent newsletter quoting Fed Chair, Janet Yellen.

So if you recently applied for a pre-approval, or soon plan to, don’t expect any surprises. Rates are projected to stay in the approximate ranges they have been for the last 6 months with new programs rolling out on a regular basis in the hopes of enticing more buyers into the market.

One of these new programs, for instance, just out from Prosperity Home Mortgage is offering conventional terms on a fixed rate, with relaxed credit requirements, use of compensating factors, unlimited use of gifted funds and increased qualifying ratios.

The particular program offers an excellent opportunity for many potential first-time home buyers that have found it difficult to save enough money for a down payment and closing costs. Or for those that had some financial trouble during the economic recovery and have been left wondering if they would qualify for a mortgage now.

With better-than-expected data in today on consumer confidence in the economy, the job market and housing, these kinds of programs can be a real boost to those ready to get started in homeownership. They deserve a close look as the stock market is poised to end in 2015 with a gain over 2014. The Associated Press is reporting today that gains will be seen more broadly in other markets, too, such as Germany, France, Britain and several Asian markets.

 

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