Real Estate, Home Loan Mortgage Rates, and the Economy

Did you know that a simple kitchen timer could be the key to keeping you on-task and making the most of your time? It’s true. Named for a tomato-shaped kitchen timer, the “Pomodoro Technique” (pomodoro is Italian for tomato) can help you fight off workday distractions that otherwise pry you from your agenda and priorities.

Francesco Cirillo, an Italian software developer, created the technique in 1992 when, as a student, he was frustrated with his inability to sit down and focus on his studies. Searching for a way to nix his procrastination and sharpen his study habits, he concluded that the “ticking clock” of deadlines is what triggers procrastination in many people, and that the key to beating it was to focus on your work, not your anxieties.

The technique is exceedingly simple:

Take a standard wind-up kitchen timer and set it for 25 minutes. For that 25 minutes, focus on nothing but the task at hand. Don’t take calls, answer emails or tend to any other business. Focus on only that task. When the timer rings, set it for five minutes and take a very short break.

Those 30 minutes represent a “pomodoro.” When you have finished four pomodoros, take a longer, 30-minute break.

Cirillo arrived at the 25-minute/five-minute time block for two reasons. First, it is a reasonable amount of time in which to place interruptions on the back burner. Nearly anything — a call, an email, a request from a coworker — can wait 25 minutes. Second, the five-minute rest period conforms to most peoples’ need to take a quick mental break from the task on which they are concentrating.

There is one additional element to the pomodoro technique: a to-do list. Use your list to outline your work, and, as you accomplish each task, log how many pomodoros it took you to accomplish each one. This will help you track the time required by each task, which will help you improve your future performance for similar work.

Use the list to also note any attempted interruptions during each pomodoro. This will not only help you get back to people in a timely fashion, but also help you identify the times in your schedule when interruptions are at their worst.

Cirillo has written a 45-page guide outlining additional tips and strategies for using the pomodoro technique that can be downloaded for free at www.pomodorotechnique.com. Try it out and see if you can drastically improve your focus — 25 minutes at a time

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It you have been listening to the national media talk about the continued decline in home prices and think it is safe to wait for the bottom a little longer, think again. There are two major components: price and payments.
For price, you need to forget the national media, and even the local news, and consider your specific neighborhood of interest and your price range. We have hit bottom in many areas of San Diego already. In fact, for homes priced under $430,000, it is an extremely hot market throughout most of San Diego. Supply and demand are reasonably balanced up to $900K and then prices get weak due primarily to the difficulty in getting a loan.
For payments (what it is actually going to cost you to live in the house), you need to pay close attention to interest rates. The table below shows the differences. A few short weeks ago, you could get a loan at 4.375% and pay $2,082 per month in principal and interest on a loan of $417,000. Today, the same loan will run about 5%. To make the same monthly payment, you can now only get a loan of $387,842. A decrease of 7%.

San Diego home values are not going to drop faster than interest rates will go up. If you’ve been thinking about getting into your first home or especially if you want to buy up in a down market, now is the time to take action. Get pre-approved by your lender first so that you and your Realtor are only looking at homes you can afford.

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Consumer credit saw its largest increase in more than two years during October, according to the Federal Reserve’s latest report released last week. October’s consumer credit increased at an annual rate of 1.75 percent for the month, marking the second straight monthly increase.

Non-revolving credit, such as home and student loans, increased at an annual rate of 6.75 percent to $1.59 trillion, while revolving credit, such as credit cards, decreased at an annual rate of 8.5 percent, dropping to $800 billion. This was the 26th straight monthly drop for credit cards.

The largest segment of the non-revolving debt’s growth was student loans, which may suggest that Americans are seeking degrees that could improve their job-hunting prospects.

Bearing that in mind, the Department of Labor reported last week that for the week ending Dec. 4, the advance figure for seasonally adjusted initial claims for unemployment benefits was 421,000, a decrease of 17,000 from the previous week’s revised figure of 438,000. Also, the four-week moving average was 427,500, a decrease of 4,000 from the previous week’s revised average of 431,500.

Meanwhile, wholesale performance was up according to the Census Bureau’s latest report last week. October sales of merchant wholesalers were $362.1 billion, up 2.2 percent from September’s revised level and up 13.4 percent from October 2009. Inventories of merchant wholesalers were $427.1 billion at the end of October, up 1.9 percent from September’s revised level and 9.9 percent from a year ago. This put the October inventory/sales ratio for merchant wholesalers at 1.18, in comparison to October 2009′s ratio of 1.22.

This week’s financial headlines kick off Tuesday with the Census Bureau’s retail sales data for November, which is expected to gain 0.8 percent over October. Tuesday will also see the Bureau of Labor Statistics’ release of the November producer price index, followed by its counterpart the consumer price index on Wednesday. Both are expected to shift little from October’s figures with the PPI forecast to increase by 0.5 percent and the CPI by 0.2 percent.

Also expected to be released on Wednesday are the Federal Reserve’s figures for November’s industrial protection and capacity utilization, which respectively report the output of U.S. factories, mines and utilities, and how much more they could have produced if needed. Production is expected to gain 0.3 percent over October. November capacity is forecast to ring in at 75 percent of production capacity.

On Thursday, the Census Bureau will release its figures for November housing construction starts and building permits, which are expected to reach 545,000 and 570,000, respectively.

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Labor productivity for the third quarter jumped by a 2.3 percent annual rate over the last period, nearly keeping pace with analyst predictions of a 2.4 percent gain.

Productivity is measured as output compared to hours worked, and according to last week’s report from the Bureau of Labor Statistics, non-farm labor output increased 3.7 percent and hours worked increased 1.4 percent in the third quarter. Non-farm business productivity increased 2.5 percent from the third quarter of 2009 to the third quarter of 2010, as output increased 4.3 percent and hours worked rose 1.7 percent.

These gains are moderate, which could point to a future uptick in hiring as businesses realize they have hit a productivity ceiling, even though the unemployment rate inched up to 9.8 percent for November, according to the Bureau of Labor Statistics report from last week. The Department of Labor reported last week that for the week ending November 27, the advance figure for seasonally adjusted initial claims was 436,000, an increase of 26,000 from the previous week’s revised figure of 410,000.

It also noted that the four-week moving average was 431,000, a decrease of 5,750 from the previous week’s revised average of 436,750. Initial claims for the same period a year ago were 475,000. “We are starting to get some self-sustaining momentum in the economy,” Nigel Gault, chief U.S. economist at IHS Global Insight, told the Associated Press. “As jobs pick up, that is making consumers a bit more confident and willing to spend.”

U.S. consumers were certainly willing to release the purse strings in November when it came to cars. November sales of cars and light trucks hit 873,323 units, according to last week’s figures from Autodata Corp. This marked a nearly 17 percent increase from November 2009. November’s sales continued October’s healthy auto sales activity, and could be an indicator that the period between Christmas and New Year’s — the most important and typically strongest period for car sales — will demonstrate a rebound for the auto industry.

“That’s when you’ll really get a sense if there’s been an improvement in consumer behavior,” Earl Hesterberg, chief executive of dealership chain Group 1 Automotive Inc., told the Wall Street Journal.

Next week’s financial news kicks off with October’s consumer credit statistics from the Federal Reserve, which tracks both revolving and non-revolving debt. While consumer credit notched up by $2.1 billion in September, market watchers are expecting the Fed to report a $3.3 billion decline for October.

Thursday will see initial jobless claims for the week starting December 4, as well as wholesale inventory data for October from the Census Bureau. September’s wholesale inventories showed a 1.5 percent increase, and October is expected to show a 0.8 increase.

On Friday, the Census Bureau also reports the balance of trade for October. September showed a drop of $44 billion, and experts are expecting the same size drop for October.

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Better-than-expected retail sales data led the week’s financial headlines, with advance estimates for October’s retail and food services sales hitting $373.1 billion, a respectable 1.2 percent jump from September and a 7.3 percent increase over October 2009.

On their own, retail trade sales were up 1.3 percent (0.5%) from September 2010, and 7.7 percent above last year; auto and other motor vehicle dealers sales were up 14.7 percent from October 2009; and nonstore retailer sales were up 13.5 percent from last year.

In related news, October’s Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent, the Bureau of Labor Statistics reported last week. While this was slightly below the 0.3 gain experts were hoping for, last month’s gain perpetuated a healthy trend.

The Bureau noted in its report for October that, as has often been the case in recent months, an increase in the energy index was the major factor in the overall CPI increase. The gasoline index rose for the fourth month in a row and accounted for almost 90 percent of the “all items” increase, and the household energy index rose as well.

The Producer Price Index for Finished Goods in October — also released by the Bureau last week — showed improvement similar to October’s CPI, with a PPI increase of 0.4 percent showing improvement, but not as much as experts’ expectations of a 0.8 increase. This continued a positive trend, with October’s advance following a 0.4 percent rise for both September and August.

Meanwhile, in housing news, the Census Bureau reported that construction was down for October, with construction starts on privately owned homes at a seasonally adjusted annual rate of 519,000. This was a whopping 11.7 percent below September’s revised estimate of 588,000. That said, starts on single-family homes in October were at a rate of 436,000, which is only 1.1 percent below September’s revised figure of 441,000.

However, permits were up for October, with the Census Bureau reporting that authorizations for privately owned homes were at a seasonally adjusted annual rate of 550,000. This was 0.5 percent above September’s revised rate of 547,000. Likewise, October’s authorizations for single-family homes were at a rate of 406,000, which was 1.0 percent over September’s revised figure of 402,000.

This week’s big financial and economic headlines lead tomorrow with the Bureau of Economic Analysis’s second estimate on gross domestic product for the third quarter, which is expected to increase by 2.3 percent. Despite the sometimes volatile nature of quarterly GDP data, given that the previous quarter enjoyed 2 percent growth, a follow-up increase could point to a developing trend.

Another important figure to be released tomorrow is the National Association of REALTORS®’s existing home sales data for October, which is expected to show a very slight gain. October’s home sales data from the Census Bureau will be released the day before Thanksgiving, and are expected to show an increase, as well (in terms of volume, market watchers are hoping for 320,000).

[This report is sponsored by Grandmaster Store for Martial Arts Equipment]

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