Now that the chores are done, it’s time to kick-back, relax and enjoy the beautiful southern California weather!
New home sales continued to turn in disappointing performance, while lay-offs were at historic lows, and incomes were on the rise.
New Home Sales
New home sales took a plunge in March, with completed transactions of new, single-family homes dropping 1.5 percent to an annual rate of 511,000, according to a joint report from the Census Bureau and the Department of Housing and Urban Development. That said, compared annually, March’s new home sales marked a 5.4 percent increase over March 2015’s rate of 485,000.
Looking at price and supply, the median sales price of new homes sold in March was $288,000, and the average sales price was $356,200. The estimated number of new homes for sale at the end of March totaled 246,000, which represented a 5.8-month supply of homes at March’s sales rate.
The big hope was that seasonal sales increases will help turn around new home sales’ recent disappointments.
“While new home sales have lost some luster in recent months, we believe they will re-accelerate as we head into [the] spring season,” noted Gregory Daco, head of U.S. macroeconomics at Oxford Economics, in a public statement.
Initial Jobless Claims
Lay-offs ticked up, but remained at lows not seen since the 1970s. First-time claims for unemployment benefits filed by the newly unemployed during the week ending April 23 hit 257,000, a gain of 9,000 claims over the preceding week’s level of 248,000, the Employment and Training Administration reported. This marked the 60th straight week of initial claims below 300,000 — a level that economists associate with a growing job market — which is the longest streak at that level since 1973.
The four-week moving average — which is regarded as a more reliable measure of job losses — dropped to 256,000, a decline of 4,750 claims from the previous week’s average of 260,750 claims.
“We’re seeing things in the labor market hold up well,” Wells Fargo Securities LLC Economist Sarah House told Bloomberg. “Businesses are feeling pretty comfortable with where the economy is going, so they don’t feel like they have to make those cuts.”
Incomes and Spending
Personal incomes saw welcome news in March: a 0.4 percent increase to $57.4 billion for the month, with disposable personal income (DPI; income after taxes) also growing 0.4 percent to $50.4 billion, according to last week’s report from the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) grew 0.1 percent to hit $12.8 billion. Personal outlays — which combine PCE, personal interest payments, and personal current transfer payments — grew $11.2 billion in March.
Wages and salaries rose to $29.2 billion in March, with private wages and salaries growing $26.3 billion. Supplements to wages and salaries grew by $5.4 billion in March.
Personal saving — which is DPI less personal outlays — grew to $735.5 billion in March, with the personal saving rate — which describes personal saving as a percentage of DPI — increased to 5.4 percent. This week we can expect:
- Monday — Construction spending for March from the Census Bureau.
- Tuesday — Car and truck sales for April from the auto makers.
- Wednesday — First quarter productivity from the Bureau of Labor Statistics; March factory orders from the Census Bureau.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration.
- Friday — March consumer credit from the Federal Reserve; April payrolls, unemployment, average workweek and hourly earnings from the Bureau of Labor Statistics.
Military Service Academy Night
Want to know more about attending our nation’s service academies?
Interested junior high and high school students, parents, and school staff are invited to learn about what the service academies (United States Naval Academy, Air Force Academy, United States Military Academy – Westpoint, and Merchant Marine Academy) have to offer.
On Friday, April 22, representatives from Susan Davis’ office will join Congressman Vargas’ office for a Service Academy Night from 5:00PM – 8:00PM at the San Diego Community College District – Cesar E. Chavez Campus 1901 Main Street, San Diego, CA 92113.
Service academy representatives, ROTC representatives and service academy graduates will be on hand to help students learn about the application, nomination and appointment process.
Friday, April 22, 5:00PM – 8:00PM
Where: San Diego Community College District – Cesar E. Chavez Campus
1901 Main Street, San Diego, CA 92113
No RSVP needed – this is an open event. For questions, please call my office at (619) 280-5353.
Susan A. Davis
Member of Congress
From City Councilman Scott Sherman:
Recently, the City Council approved my measure to reform the City of San Diego’s Conditional Use Permit (CUP) to ease permitting requirements on San Diego public charter schools.
Public charter schools serve over 21,000 students in 51 schools within the City of San Diego. Public charter schools have become an important educational option for thousands of San Diego parents. Unfortunately, the City’s burdensome CUP is enormously complex, time consuming, and expensive.
My plan achieved the following:
- Revised municipal codes to reduce the permitting requirements to help charter schools obtain facilities
- K-12 schools with less than 300 students will be permitted in residential multi-family, commercial regional, commercial office, and commercial community permitting zones
- These revisions allow more money to go directly to education instead of navigating through the permitting process
We began working with public charter schools and affiliate organizations after being contacted by four charter schools in my district having trouble navigating the burdensome permitting process.
Thousands of San Diego working families depend on charter schools throughout San Diego to educate their children.
I applaud the City Council for approving this important measure. It will now be easier for charter schools to obtain quality facilities and allow for more funding to be directed to students instead of for consultants to navigate the complex bureaucratic process.
As always, if you see a problem in the community that needs to be fixed, please contact my office at 619-236-6677 or email ScottSherman@SanDiego.Gov and we will look into the issue right away.
San Diego International Mobile Film Festival by S. Botello Productions™ International Mobil Film Festival™ was created for every human in the world to realize their dream of being a filmmaker. Using mobile phones and smartphones as a camera you can submit your mobile film free to watch your film screen on the big screen in San Diego, network with other filmmakers, join workshops and walk the red carpet during an awards ceremony.
Click here for more info: Mobil Film Festival
The Federal Emergency Management Agency (FEMA) has issued revised Flood Insurance Rate Maps (FIRMs) for portions of San Diego County, primarily in the vicinity of Escondido, San Diego and Imperial Beach. The maps will become effective on Tuesday, April 5, 2016. These maps show areas that are considered to be in a floodplain, and therefore may require homeowners to obtain flood insurance. Disclosure of a Special Flood Hazard Area (Zone “A” or “V”) that affects the property is a statutory requirement in real estate transactions under California Civil Code 1103.
FEMA last updated flood maps in most of the county in May 2012. On the maps that will be effective on April 5th, approximately 5 parcels have been added to the Special Flood Hazard Area (“100-yr flood zone”) and about 146 parcels have been removed from this high-risk zone.
Prospective home buyers may wish to check with their insurance agent to see if the property’s flood zone, and insurance requirements, will be affected by the map changes.
For more information about…
– the flood map changes and how they may affect your clients
– insurance requirements which these changes may trigger
– opportunities that may benefit your clients with lowered flood insurance costs
– disclosure compliance
– how to view the new FEMA maps online
…give us a call and we will make sure that you receive the information you need regarding the changes.
A decade ago, most financial advisers would roll their eyes at the mention of reverse mortgages, loans that give homeowners an advance on their home equity and allow them to delay repayment until the home is sold. Such products, these advisers used to say, weren’t for their clients, but rather for those who didn’t prepare financially for retirement.
New safeguards in recent years, however, have led many advisers and researchers to change their minds about reverse mortgages. Indeed, many now are exploring when and how to use them in financial plans. One important change, the Reverse Mortgage Stabilization Act of 2013, prevents homeowners in most cases from taking all their equity at once—roughly 40% of the total amount that can be borrowed is unavailable until a year after the initial loan. Other recently enacted regulations require homeowners to demonstrate they are able and willing to pay their property taxes and home insurance. And there are new protections for the non-borrowing spouse.
Recent policy changes “should make the product safer for seniors in the future,” says Stephanie Moulton, an associate professor at Ohio State University and co-author of a 2015 paper on reverse mortgages published in the Journal of Urban Economics. Prof. Moulton estimates that such changes as limiting how much equity borrowers can extract upfront could cut the default rate on reverse mortgages in half. (In 2014, nearly 12% of reverse-mortgage borrowers in the federally insured Home Equity Conversion Mortgage program were in default on their property taxes or homeowners insurance.)
“Over time, these changes may encourage larger banks to re-enter the market, further increasing the credibility of the product and potentially lowering costs,” Prof. Moulton says.
Of course, there are still risks, including spending the proceeds too quickly and suffering losses if the proceeds are invested, as pointed out in a 2015 paper written by Wade Pfau, a professor at the American College of Financial Services in Bryn Mawr, Pa., that favored the use of reverse mortgages in a retirement-income plan under the right circumstances.
While acknowledging the risks, Prof. Moulton says that “one of the advantages of the federally insured reverse mortgage, the HECM, is that the government assumes some of the risk for the borrower.” For example, she notes that HECM borrowers can never end up on the hook for negative equity. If the balance on the reverse mortgage ever grows to exceed the value of the home, the federal insurance covers the difference.
Here’s a look at some of the reverse-mortgage strategies financial planners suggest:
Taking a lump sum
Borrowing enough of the equity in a house in a lump sum to pay off an existing mortgage is one of the most frequent uses of a reverse mortgage, says Prof. Moulton. More than 60% of reverse-mortgage borrowers have used the proceeds for this purpose, according to her research. “This actually may be a pretty smart strategy,” she says.
Prof. Moulton cites a recent report by Harvard University’s Joint Center for Housing Studies that found that nearly 40% of seniors age 65 and older carry a mortgage today, a rate that has more than doubled since 1992. “Using a reverse mortgage to pay off a forward mortgage frees up monthly cash flow to a household,” she says. “Essentially it has the same effect on a household budget as receiving a monthly annuity payment.” But lump-sum borrowing can go wrong. Harold Evensky, chairman of Evensky & Katz/Foldes Financial, a wealth-management firm based in Lubbock, Texas, generally advises against using a lump sum as leverage to increase debt—as a down payment on a second home or vacation home, for instance. “There may be circumstances that justify the strategy, but it’s not something that should be considered without carefully considering the potential risk,” he says. “The risk is overleveraging,” he says—taking on more debt than you can afford to pay off.
And even if that isn’t the case—if the homeowner spends the borrowed money without incurring additional debt, say on a vacation or a car—spending the equity in a home this way deprives the homeowner of a valuable financial cushion, he says.
Opening a line of credit
Increasingly, advisers are suggesting that homeowners establish a line of credit through the HECM program whether they need the money immediately or not, because it can be used in several ways, as the need arises, to protect savings or even increase income in retirement.
A line of credit makes more sense than borrowing a lump sum and keeping it in reserve, says John Salter, an associate professor at Texas Tech University who has co-written papers with Mr. Evensky on reverse mortgages. That’s because, due to the intricacies of reverse-mortgage terms, the unused portion of a line of credit grows over the years, giving the homeowner access to more cash.
Shelley Giordano, chairwoman of the Funding Longevity Task Force, a Washington, D.C.-based industry group that promotes the use of home equity as a tool for retirement income, suggests setting up a reverse-mortgage line of credit as a way of protecting retirement funds from fluctuations in the financial markets.
Here’s the idea: In a bear market, homeowners can borrow funds as needed through the line of credit rather than withdrawing money from their investment portfolios. Withdrawals from a portfolio in down markets lock in losses and leave less money to grow when markets rebound. By borrowing instead, homeowners give the portfolio a better chance to recoup its losses when markets turn around.
Once the portfolio recovers, it can be used to pay off the line of credit, which is then fully available the next time cash is needed in a bear market. Ms. Giordano notes an HECM line of credit “cannot be canceled, frozen or reduced regardless of what the home value does in the future.”
An HECM line of credit also can be used as a source of income for those who want to delay applying for Social Security benefits and so increase their monthly payout when they do start taking benefits, Ms. Giordano says. After you apply for Social Security, you can stop taking money from the line of credit and, if you want, pay the loan back.
Because income from a reverse mortgage isn’t taxed, experts say an HECM line of credit can also be used—in place of taxable withdrawals from retirement accounts—to avoid tax-bracket creep, as well as the higher Medicare Part B and Part D premiums that can result from higher incomes. Ms. Giordano also suggests using a reverse-mortgage line of credit to pay taxes due on Roth IRA conversions. In the conversion process, distributions from IRAs are taxed as ordinary income, and experts often recommend paying those taxes with funds outside the IRA, because using money from the IRA for that purpose generates even more taxes.
Mr. Evensky says the usefulness of reverse mortgages belies the negative impression some people still have of them.
“I believe most criticisms relate to a myopic view of the product that has not been reviewed for decades,” he says. “Unquestionably there can be misuses of the product. But the problem is the use, not the product.”
Article provided by Wall Street Journal
No Joke…. the ugliest dog contest happens right here in April. Check out the schedule below and we hope to see you at one of the events this month. Get out of the house and enjoy the fun and sun of San Diego!
San Diego Farmers Markets Ongoing
San Diego Food Trucks Ongoing
San Diego Gulls Ongoing – check website for schedule
Giant Automotive Festival Apr 1-3
Explore over 2500 of the finest hot rods, customs, muscle cars, tricked-out trucks, and classics in the country on display both indoor and outdoor as they compete for a shot to win the coveted Goodguys 2016 Street Rod D’Elegance Award. With hundreds of vendor exhibits, the “Nitro Thunderfest” vintage dragster exhibition, the AutoCross timed racing competition, a Swap Meet & Cars 4 Sale Corral, live music, and Kids’ Zone.
Hops on the Harbor Apr 1, 15, 22, 29
Two-and-a-half-hour cruise features multiple food stations, picturesque bay views, and a full bar with rotating local brews and craft beer flights. After-dinner music and dancing. April’s featured brewery is Coronado Brewing Co.
Craft Beer Relay Apr 2
The Craft Beer Relay is a four-person relay, a challenge to you and your teammates to navigate a race course filled with games, obstacles, and challenges. Twelve local craft beer stations along the course will keep you motivated — before and after your race, enjoy a craft beer festival with live music, food trucks, and local craft breweries.
Tartan Day San Diego Apr 2
Tartan Day San Diego, presented by the House of Scotland and the House of Scotland Pipe Band, is a celebration of the culture, food, and music of Scotland. There will be clan and vendor booths, food and desserts for sale at reasonable prices, and the music and dance of Scotland.
Chocolate Festival Apr 3
With vendors focusing on chocolate edibles. Crafts for kids include making their own chocolate pizza. Mars Chocolate History Ambassadors will be onsite to demonstrate the historical bean-to-beverage story of 18th-century chocolate using authentic tools including cocoa pods, cocoa beans and nibs, a hot stone metate, winnowing baskets, chocolate drink pots, and stirrers throughout the day. Observers will be able to touch, taste, smell, and experience chocolate as it was enjoyed in early America.
Tour de Cure Apr 9
Participants have the opportunity to participate in the one mile kids ride, 15 mile, 29 mile, 62 mile, and 100 mile-rides. The 15-mile ride is a new element to this year’s event. Waiting at the finish line will be more than 25 vendors, live music, healthy street tacos, and organic beer. Proceeds go toward critical funds for diabetes research and advocacy.
Healthy Living Festival Apr 9-10
Listen to experts share new ideas about lifestyle changes that can help you prevent disease and lower stress. Take part in free medical testing and screening. Watch chefs prepare and then sample healthy and ultra-tasty dishes with take home recipes. Catch the belly dancing show, join in a yoga, Zumba or dance class, or receive a massage. 30 free workshops, seminars, and cooking demos. 200 exhibitors.
Ugly Dog Contest Apr 10
Hosted by San Diego Coastal Chamber and the Del Mar Kiwanis. Cutest dog, best trick, dog who looks like their owner, and more. Gift basket with dog products will be given to the first, second, and third place winners in each category. Gift bags with samples handed out to the first 100 to check in that morning.
Oceanside Jazz Fest: Vocal Festival Apr 14-16
The Oceanside Jazz Festival consists of educational and performance opportunities for school and community jazz bands and choirs, and featured concerts by internationally recognized performing artists.
Parkinson’s 5K Walk/Run & Expo Apr 16
USATF-certified and chip-timed 5K course on the San Diego Bay, Medical Expo and Health and Fitness Village, Paws for Parkinson’s Pet Festival, Kids’ Zone, and food trucks and beer garden. Hosted by the Parkinson’s Association, the event proceeds fund programs and services local to Parkinson’s families.
Rhythmic Gymnastics Championship Apr 23-24
One of the biggest rhythmic gymnastics competition in the West Coast, the Level 7 to 10 Region 1 Rhythmic Gymnastics Championship. Enjoy the best rhythmic gymnasts from California, Nevada, Arizona, New Mexico, and Utah. And be amazed by their grace, flexibility and mastery of the ball, ribbon, clubs, hoop, and rope.
Autism 5K/10K Apr 30
5K, 10K, and 1-mile courses and a festival with live music, 30+ vendor booths (including an autism resource fair), beer and wine garden, kids’ zone, and more. Entry includes a T-shirt, entry into the post-race raffle, and two drinks in the beer and wine garden.
Fiesta del Mar Apr 30
A cross-border Celebration of Friendship between the cities of Imperial Beach and Rosarito, Mexico with live musical acts from both the Rosarito and San Diego areas as well as interactive family activities hosted by the Boys & Girls Clubs of both cities.
My wife Pia and I were invited to an exclusive “Family and Friends” screening of a new TV show on the SyFy Channel “Wynonna Earp”. We saw the first two episodes and met the cast, producers, creators, etc. It was very well done and I’m super excited to have a new show on SyFy…. check it out starting April 1st!
Click on the pic to check out the show!