The Producer Price Index measures the average change -over time – in prices domestic producers receive for their output. Whereas “retail” constitutes prices reflected through the sale of goods and services to the public for their own consumption – not for resale – the Producer Price Index measures the cost of goods and services at the wholesale level.
Each month, the Producer Price Index is published by the Bureau of Labor Statistics. Typically, the Producer Price Index is released by the Bureau of Labor Statistics the second week of the month.
There is an impetus placed upon real estate professionals – as well as an implied responsibility – to honestly, to effectively and to accurately communicate reality to home sellers. An inability to do so? Fewer real estate listings. Lower sale prices for home sellers. Less equity converted into cash for home sellers. Less revenue for real estate companies. Inopportune…across the board.
Three years ago, American homeowners were custodians of an estimated $19 trillion in homeowner equity. Furthermore, over the past three years – even with these stubbornly-elevated mortgage rates – we witnessed an uninterrupted, further run-up in home prices. More equity gained, for American homeowners.
As mortgage rates ease downwards heading into the fall, unlocking trillions of dollars in homeowner equity – as a result of more homeowners deciding to either trade up to larger homes, or to downsize to smaller homes, circumstances permitting – will trigger a large-scale (and an upcoming) re-thinking of this following question by more and more homeowners: What shall we now do with this equity we have in our home?
So what’s the plan?
In real estate, the effective utilization of well-tested “tools,” such as 3-D tours and virtual staging, coupled to good marketing processes – I.e.: a Marketing Plan – deployed by successful real estate teams is a great way for homeowners to convert the equity they have in their homes into cash.
It works.
Ok, so if you are a for sale by owner home seller in 2024, data indicate that an over-reliance in – as well as, maybe, blind faith placed upon(?), “the Internet,” if you decide to sell your home yourself , FSBO, could lead to an entirely avoidable (and a costly) home selling misadventure. As well as to a saddened foray for home sellers into this unintended outcome: lower sale prices.
In 1870, Darius Munger and William “Dutch Bill” Greiffenstein filed plats to lay out the first streets in what would go on to become Wichita, Kansas. Wichita incorporated as a city on July 21, 1870.
One year later – on June 22, 1871 -underpinnings for the establishment of ‘Cowtown’ were laid in steel in Wichita.
The Wichita and Southwestern Railroad Company was incorporated on June 22, 1871. A few months later, relative to railroad expansion in Wichita, a Sedgwick County, Kansas bond issuance took place. That bond issuance was approved by Sedgwick County voters on August 11, 1871: $200,000 in bonds
This bond issuance enabled Wichita to finance the construction of a rail line which connected Wichita to Newton, Kansas.
Rail service in Wichita – connecting Wichita to Newton -was a boon for Texas cattlemen. The new rail line -to the north of Texas – enabled shipment of cattle from Texas, on to Wichita. Then further along to Newton. And off to eastern markets in the United States.
When an offer to purchase a home being sold through probate in New Jersey has been accepted, a notice will be mailed to heirs of the estate. This notice is the Notice of Proposed Action.
The Notice of Proposed Action enables estate heirs to object to the sale of the home. Should an estate heir – or, should estate heirs – object to the sale of the home, a court date will be set.
Any offer to purchase a home being sold through probate must be equal to – or greater than – 90% of the appraisal value of the home. The appraisal value of the home is provided to the court by a licensed real estate appraiser who has been designated by the court to conduct such an appraisal.
Whats next?
The attorney for the estate schedules a confirmation hearing. This hearing takes place within 45 days of the filing date. Throughout the process, the listing agent of the home being sold through probate continues to show the home to prospective buyers.
One directive the listing agent has in continuing to show the home to buyers is to determine whether an over-bidder emerges. An over-bidder is a buyer who submits their offer to purchase the home at a sale price which is greater than offers which have been received, to date. Thus, raising the sale price of the home. Increasing proceeds for the estate.
In the event that there is an offer submitted by an over-bidder, the over-bidder attends a confirmation hearing. At the confirmation hearing, the over-bidder is required to present a certified check which is equal to or greater than 10% of the proposed sale price.
In Kansas City, if one were to bring up the topic of River Quay (pronounced “River Key”), that conversation would no doubt evolve into a conversation about River Market.
Today, River Market is a hip-and-trendy neighborhood in Kansas City, Missouri. Located just south of the Missouri River. Adorning River Market’s quaint neighborhood feel, you’ll find chic eateries. Coupled to an urban lifestyle. Complete with a streetcar. A stone’s throw to the west of Christopher S. Bond Bridge. That’s today. Today’s River Market. Yesterday’s River Quay.
In 1971, Marion Trozzolo – then, a Rockhurst University professor – began renovating historic buildings alongside the “Big Muddy” in a section of Kansas City that we now know to be River Market. It was Professor Trozzolo who came up with the River Quay nickname.
Trozzolo’s idea for River Quay? For River Quay to undergo a thorough, artsy-remake. Into a Kansas City-styled French Quarter. A neighborhood comparable to Chicago’s Old Town. To San Francisco’s Ghirardelli Square. Trozzolo envisioned a family-friendly environ for River Quay. Unfortunately, the latter half of the ‘70’s was a rough time for this neighborhood next to the muddy Missouri.
The word Quay? It’s a word of French origin. The translation for Quay? Loading platform. Or wharf.
Did River Quay ever become a Kansas City French Quarter? Did River Quay ever become a Kansas City Old Town? Did River Quay ever become a Kansas City Ghirardelli Square? Hardly.
By the late ‘70’s, revitalization efforts in River Quay had stalled. Leaving River Quay saddled with boarded up buildings. Deserted through-streets. A neighborhood, with no vibrancy. Streets, with no traffic. Sidewalks, with no passers-by.
By the late ‘70’s, developers were walking away from unfinished River Quay projects. Whereas River Quay had once – not long before – been primed for a grandiose new identity. One which bespoke of a rebirth for this neighborhood. A transition. From blight. To that of an entertainment district. Yet by the late ‘70’s, River Quay was not on its way to becoming Kansas City’s French Quarter.
By the late ‘70’s, you’d still find an X-rated theatre in River Quay. With mob ties. Homeless, sleeping next to decrepit River Quay buildings. Empty River Quay buildings which had once been fancied as prime renovation opportunities. Projects, sadly cast aside and forgotten. In River Quay.
In the late 1970’s? Well, at that time, River Quay was as an unfinished idea. Full of unrealized potential. Full of unrealized promise. Disappointing, no doubt. Yet today, on those same grounds, alongside the Missouri River, we have Kansas City’s stunning River Market. A great idea. Then a detour. Yet, a happy ending – and a nice story, with a unique history- in Kansas City.
As the economy boomed after World War II, the United States government entered into the housing business.
Post-War, U.S. housing policy backed home loans. When the government enters into any business, that business sector – its size, its shape, its construct, entrants into the business and business behavior overall – changes. Housing is no different.
The Servicemen’s Readjustment Act of 1944 – we know this to be the GI Bill – helped Veterans transition from soldier to citizen. A gateway to the middle class for countless U.S. Veterans was homeownership. Homeownership made possible through no-down payment VA loans.
When speaking about the government’s role in housing, the Department of Housing and Urban Development comes to mind. HUD.
HUD was formed in 1965. See low down payment FHA loans. With low down payments, there will be elevated levels of home purchases. Thanks in no small part to the low down payment.
In terms of homeownership, countless Veterans – as well as those who benefit by obtaining an FHA loan – can and should acknowledge that the “free market” is not the reason they have been to benefit from homeownership. Government is the reason.
According to a report put out by the Brookings Institute a few years ago, an estimated 15% of land in American cities is vacant.
Vacant properties located within a municipality – as well as non-performing properties located inside city limits – do not generate adequate property tax revenue for municipalities. All the while, property taxes make up a substantial portion of revenue for municipalities. When property taxes can be collected, that is.
Financial costs and social costs…
A reduction in property tax revenue coming in to a municipality often leads to the cutting back of services provided by the municipality. Impeding day to day life for those who live there. This topic of social costs which are linked to non-performing properties can be its own essay, in and of itself. Or book. And its very unfortunate.
Let’s look at St. Louis, Missouri.
Through the year 2020, it had been reported that St. Louis took possession of nearly 10,000 non-performing properties located within St. Louis city limits – houses, lots and buildings.
The idea in St. Louis? Conveying non-performing properties in St. Louis to developers.
By conveying non-performing properties to developers, St. Louis avoids functioning as the de-facto “property manager” of these non-performing properties.
Snow removal. The mowing of lawns. And so on, and so on. Services St. Louis transfers to developers. Developers who then manage their properties, while renovating them. Or building new. Getting repurposed properties back onto the St. Louis tax roll. As performing properties. As sources of additional property tax revenue for St. Louis.
As 10 Year Treasury prices rise – while yields drop in direct correlation to the price increases – interest rates on 30-year fixed rate mortgages will come down.
So how does this work?
When it has been determined – or shall we say, theorized – that we may encounter market volatility in the U.S., there is an inclination for investors to accept lower yields for “loans” they make to the United States government. Through their purchase of Treasuries.
Market volatility? Volatility means government bonds represent a stable place for investors to “park” their money. When compared to alternative investment vehicles. Such as the stock market.
Within a socioeconomic environment where there is a high level of demand for 10 Year Treasuries, bids by investors for Treasuries would (more likely than not) come in at or above the face value of Treasuries.
Increasing bond prices drive down bond yields. This is so because investors are willing to accept lower coupon rates for bonds in exchange for the de-facto “loans” they are making to the United States government. Through their purchase of 10 Year Treasuries.
Manufactured goods made in countries which offered lower wages to their workers.…coupled to less regulation. A hollowing out of the City’s property tax base. Suburbanization. Each contributed in their own unique way to Trenton’s continual decline. A decline in industrial output. A decline in the City’s population. But for Trenton, the year 1974 stands out as having a local occurrence of finality, some may say.
The early Twentieth Century industrial prowess of Trenton – and of Trenton industrialists – owed much sustenance to the City’s ability to utilize newly-built canals and railroads. Railroads and canals transported manufactured goods – made in Trenton – to end markets, such as New York City and Philadelphia.
While Trenton enjoyed a long run as an important American manufacturing hub, in June of 1974, the final 1,400 employees of what had once been Roebling’s Trenton industrial empire lost their jobs. These final Roebling layoffs? The result of numerous failed attempts to revive the then-Trenton plant, which had been controlled by (at that time) Roebling’s acquirer, Colorado Fuel & Iron.
Those two Roebling manufacturing plants in Trenton closed their doors for good in 1974. Marking the end of Roebling’s manufacturing presence in Trenton. And, to some, also marking a finality of sorts, to what once had once been a thriving industrial hub. Trenton.
