Housing Prices Rebounding

Housing Prices Rebounding
September 29, 2009
Zacks Investment Research - Zacks.com

The Case-Shiller Index, the gold standard of housing price indexes, showed widespread increases in July versus June.

Housing prices do have an element of seasonality to them, so it is best to look at the seasonally adjusted numbers. Most of the press makes the mistake of using the unadjusted numbers, so this analysis might have some differences from the headlines you see elsewhere.

However, on both a seasonally adjusted and unadjusted basis, the story is much the same: at least for now, the bear market in home prices appears to be over. On a monthly basis, the composite 10 index (or C-10, which has a much longer history) rose to 154.69, a gain of 1.26% on the month and cutting the year over year decline to 12.79%. From the peak in May of 2006, the C-10 is down 31.62%.

The broader Composite 20 index posted a monthly gain of 1.15%; it is off 13.32% from a year ago and 30.60% from the May 2006 peak of the housing market. The gains were widespread, with 17 of the 20 cities posting gains.

While home prices are way off from the bubble peaks, overall they remain about twice as high as the stable 75 to 85 range they were stuck in for almost a decade between 1988 and 1998. In real terms, then, home prices are coming back towards normal -- they are not particularly cheap. The graph below shows the history of the two composite indexes.





For the month, the biggest gains came from Minneapolis, rising 3.09%. On a year-over-year basis, prices in the Twin Cities are down 17.3% and are off 29.5% from May 2006. San Francisco took the silver with a gain of 2.90%, but it is down 17.9% from a year ago and 39.46% from the peak. Chicago took the bronze with a 2.10% monthly gain. Home prices in the Windy City are down 14.23% from a year ago and are off 23.33% from the peak.

This time in Las Vegas the house didn’t win, although Vegas does win for losing. For the month, home prices fell 1.85% -- by far the largest monthly decline. Over the last year, those who gambled on housing there are down 31.4% and are off 53.30% from the peak. Detroit might have been able to break into the win column in football, but its losing streak in housing continues. Motown posted a 0.36% decline for the month and is off 24.69% for the year and 38.35% from the peak.

Keep in mind that these indexes cover the whole metropolitan area, not just within the city limits, so it is not just the prices of giveaway abandoned homes in the city center that are still declining. Seattle was the only other city to see a decline for the month, falling 0.26%. It is off 15.36% on a year-over-year basis, and 22.35% from the peak.

The second graph below has an interesting way of presenting the city-by-city data. It shows the decline from the peak (actually from the individual city peaks; the percent declines I mentioned above were from the national peak date) currently and through December of 2007 (blue bar) and December 2008 (yellow bar). Thus if the red bar is below the yellow bar, prices in that city are down year-to-date.

It shows that there is no real clear pattern between if a city was a big early decliner and more recent price movements. Las Vegas and Detroit were both hit hard early in the housing bear market and continue to face difficulties. San Francisco and San Diego were also hit hard early, but have seen only minor declines year to date. Cleveland was hit early, but has actually been seeing gains so far this year. Dallas and Denver had relatively small early losses and are now also seeing year-to-date gains. Other early holdouts in the price declines like Seattle and Portland are showing some of the largest year to date declines.




The back-to-back increases in the Case-Shiller index are very significant in that they provide some hope that the number of people who are underwater in their houses is going to stop rising (except perhaps in Atlanta. But that is a different issue). Owing more on your house than it is worth is the single largest predictor of if a homeowner will stop paying the mortgage and eventually be foreclosed upon.

Those foreclosures obviously hurt the bottom line of the whole mortgage complex, from the big banks like Bank of America/Countrywide (BAC) that made the loans, to the myriad of institutions that hold the paper that those mortgages were sliced and diced into, to the private mortgage insurers like MGIC (MTG) and PMI Group (PMI) to the GSEs Fannie (FNM) and Freddie (FRE), and ultimately we the taxpayers, who own 80% of each of them.

I doubt that we will see a rebound in housing prices that will lift significant numbers of people who are currently underwater back into a position of having equity in their houses again. However, this recent stabilization will stop their numbers from swelling further. That is a major step forward and is good news.

Powerful neighborhood associations shaping Nashville development

Powerful neighborhood associations shaping Nashville development


Sunday, September 27, 2009 at 10:45pm
By Kyle Swenson

Still smoldering after a year's worth of intense land use issues — from the high-wire dramatics of Bells Bend to the continued back and forth over a downtown convention center — Nashville has reached an important crossroads in regards to development.

Out of the grab bag of buzzwords and concepts, infill has emerged as the championed chosen path that many feel is the best route for shaping Nashville's future growth. However, as the city now turns its back on sprawl and grapples with how to rethink older areas of the city, one group of stakeholders is likely to take on a growing role: Nashville's neighborhood associations.

Numbering more than 200 organizations citywide, the groups are a significant presence. Many of the long-standing groups, such as the Hillsboro-West End, Lockeland Springs and Belmont-Hillsboro, are strong in membership, savvy to the process and equipped with a clear vision for their area.

First organized in the 1970s as a front against absentee landlords, predatory lenders and the boorish bureaucracy of Metro government’s old guard, tcomm. It’s a progression that one longtime neighborhood activist describes today as “power passing back into the hands of the people from whence it should have come.”

For many that ascendancy peaked with Bill Purcell, a mayor supportive of a vibrant city patched together from distinct neighborhoods. Today, the groups are empowered by the community plan process, an approach that lets citizens map out with Metro’s Planning Department the land use of their area. Thanks to this influence, the associations arguably have as strong a hand as any of the other players at the table.

In fact, some developers complain that planners and politicians tilt too readily toward the associations' wishes.

But now the classic clash between builders and communities has been altered. Today, spiking the usual brew of development tension is market uncertainty; with a shipwrecked economy, many of the development opportunities available only a year or two ago are off the table. As development lurches forward from the current snag, some members of both the building community and the planning department wonder if the very detailed community plans outlined over the last decade will accurately reflect the type of building that will be available down the road.

“I think there's a real tension in the community plans between trying to lay out what's going to happen in the future, wanting some certainty that the plan is going to be followed, and the need to keep it flexible to respond to a changing market,” said Metro Planning Department’s Jennifer Carlat.

If the market reality doesn't support what's in the fine print, the question rises as to whether or not strong neighborhood association will be flexible to alternations to their plans — what many residents hold to be the holy writ of how their areas grow.

This fallout from the economic bust means it's likely all the parties involved in development — from planners and politicians to neighbors and developers — are going to change how they plan the future.

Neighborhood groups get savvy

In Metro’s current setup, the main thrust of the neighborhood associations' influence comes from the community plan process.

The Planning Department has chopped the Metro area into 14 community plan areas; each section goes through an update process every seven to 10 years.

“That update is the most important time for the community to be involved because that's when we do the visioning of what should be preserved, what should be changed, what should be created from scratch, and what needs to be scratched,” Carlat said.

Through a series of feedback sessions, the department meets with area neighborhood associations, as well as city officials, Metro Council members, institutional representatives and developers. By bringing all the parties to the table, the aim is to have as open and honest a discussion as possible. One plus to [that] approach is that changes to the community’s makeup can be discussed from a distance, without the heat often stirred up by zone change requests.

“The idea is we can have this conversation a bit more calmly,” Carlat said. “We can think a little more broadly in terms of long term impacts and also in terms of what's my community's role in the overall county.”

What emerges is a document outlining the land uses for every single piece of property in an area. Neighborhood leaders involved in the most recent community plan process for West Nashville say they appreciate the voice the current system gives to the community.

“I think the plan will encourage development where neighbors are comfortable,” said Rob Robinson, a leader in the Sylvan Park Neighborhood Association. “I hope that it will make sure that if someone does go in and develop in an area neighbors are sensitive to, they'll develop in the right way.”

Things change

But Carlat acknowledges the planning staff sees a catch in the current community plan setup. As neighborhood groups become more savvy to the process and seek more specificity about the density and land use assigned to a parcel, that specificity comes at the cost of flexibility.

Members of the development community echo the same feeling. According to James Weaver, attorney for Waller Lansden Dortch & Davis, the plans reflect a snapshot of market possibilities at the time they're devised. However, the end success of a development rests on whether or not businesses, restaurants and retailers will buy into the available options in later economic conditions.

“The apprehension our clients have about the community planning process is that what it sometimes is not designed to be is a living document, and the market is a living phenomenon — it changes,” Weaver said. “What may be feasible today, may not be feasible tomorrow.”

The community plans aren't ironclad; the planning mechanics allow for projects with an alternative land use to apply to amend the current documents. When those alternatives are proposed, developers and neighborhood associations are drawn back into the ring, sparking dialogues that have proven to be everything from constructive to contentious.

However, with the markets fluctuating as rapidly as they have, Carlat says the Planning Department does expect to see more rezoning requests in the future.

Some rough patches

Nashville's recent history of plan amendments has not been altogether smooth. Ideally a chance to engage in a constructive dialogue about planning, the amendment process at its worst can break out into pitched battles between development interests and neighbors on the defensive.

The Green Hills area was recently bruised-up in such an ugly squabble regarding a development in the heart of the neighborhood. Last spring, developer Brent Smith unveiled plans for a 300-plus unit development off Abbott Martin Road. According to Smith, the local neighborhood groups immediately took issue with his project, despite the fact that the Planning Department staff recommended the proposal.

Following a series of contentious public meetings, Smith pulled his project after the area’s Metro councilmen, Carter Todd and Sean McGuire, deferred to the neighbors.

Looking back, Smith says a vocal minority of association members hijacked the discussion without knowing all the facts. But he doesn't rest blame entirely on the groups. Instead, Smith believes the council members should have taken more of a leadership role in the process.

“I think the real problem lies more in the amount of weight that our council members give the neighborhood associations,” Smith said, adding if Metro Planning staff approves but the neighbors oppose, council members should not be afraid to stand up for a project with long-term community value.

Also, council members are wrong to measure community support by polling public meetings held on projects, Smith argued, because often only citizens in opposition attend, which creates a potentially false sense of majority for an opposing viewpoint.

So, instead of exercising judgment, the developer says, council members easily allow sound development to collapse under the volley of public outcry.

Council members counter that community input is essential when dealing with a plan amendment.

In East Nashville, Councilman Mike Jameson is current working with community members to measure the support for a 6,000-square-foot mixed-use development at 16th Street and Ordway Place. For Jameson, the public meetings on the project have been important.

“As squeamish as it makes people, a show of hands is at least an indication of the neighborhood consensus,” he said. “It's not the be-all and end-all of development decisions. I caution people that this is simply a factor that goes into it, along with the Planning Department's recommendations, and other council members' input.”

Zoning’s political pitfalls

If the choppy market does force more zoning amendment proposals to surface, charged land use disputes could follow. As Nashville Neighborhood Alliance leader John Stern points out, plan amendments are tricky political terrain.

“I think it's safe to say zoning issues make or break council candidates,” Stern said. “That's one of the things that people don't easily forget.”

As an example, Stern points to Councilwoman Pam Murray's precipitous pitfall into her current recall, a situation set off after neighbors were upset with how their representative handled a rezoning request.

The neighborhood associations are not without their own political push. Both as individual groups and as umbrella organizations, such as the Neighborhood Alliance and the Nashville Neighborhood Defense Fund, the neighborhoods have successfully lobbied for civic initiatives such as storm water management and animal control, as well elements that play directly into the political process.

Stern and others played a role in putting the current councilman recall provision in Metro's charter. The group's candidate questionnaire, a look into the development proclivities of candidates, is a popular election season reference.

Through persistence and push, the neighborhood associations have managed to “increase the number of council members that are respectful of the community and constituencies,” according to Stern, but he added that “there still are outliers out there causing problems.”

Stern acknowledges too that most of the older neighborhood groups have matured beyond the not-in-my-back-yard attitude.

“We're at the point where we have to say what we envision as well as what we don't envision,” he said.

In part it's because of how far they've come that the neighborhood associations could play such an important role ahead. As the post-May Town pressure for infill increases and changing markets potentially upset the specificity of community plans, neighborhood groups could take the lead working with developers.

However, according to Carlat, these groups must begin to think beyond their own neighborhood. By thinking of every neighborhood as a piece of ‘the whole,’ associations, planners and developers can quilt together the right citywide mix.

“Neighborhood leaders need to take responsibility to think about the impacts of development not only on their community, but on the broader community and on Davidson County,” she said.

Developers rely on creativity, passion in restoring historic buildings

Nashville Business Journal - by Jenny Burns Staff Writer
Friday, September 18, 2009



A public square with buildings reminscent of Paris. A train shed with a one-of-a-kind gabled roof. A pre-1800 era home on Gallatin Road.

These are pieces of Nashville’s past that have been lost.

But many others have been saved and turned into viable uses for today’s economy: The Hermitage Hotel, Union Station, Werthan Mills, the Bennie Dillon, Third National Bank, downtown lofts and retail spaces along Second Avenue and Broadway.

Behind these projects are developers and architects who used their business acumen and love of all things old to push past the obstacles to save some of Music City’s treasures. They will tell their stories when the National Trust for Historic Preservation holds its annual conference in Nashville in October. They’ll talk of how they used tax credits, saw vision in a pigeon-infested buildings and found creative ways to make a building economically viable today.

The challenges are many.

Foremost, it typically costs 10 percent to 20 percent more to preserve an old property than to build a new one, said Aaron White with Nashville-based Core Development, who transformed the Werthan Mills bag factory on Eighth Avenue into a $35 million condominium community. Core also has converted several downtown buildings into lofts, including the $10 million Kress building, the Art Avenue Lofts, Church Street Lofts and the $9 million Exchange building.

“By the time that you restore it properly, you will have spent more than you would have spent on new construction,” White said.

But that doesn’t always mean a higher sales price. Buyers generally don’t put a premium on a condo restoration, White said. Often, new construction can offer amenities that preserved buildings can’t offer. However, tthere is a segment of buyers that prefers the charm of 100-year-old exposed brick to shiny new buildings.

“You really have to do it because you love it, because buildings are worth saving,” White said. “You have to build a group of socially responsible investors and owners. The reason to do them is not the money.”

It takes specialized craftsmen to customize a layout for a re-use, because in the case of condos, every unit typically is different to fit the building.

“Werthan took a lot more design time. Ultimately the costs are less predictable,” White said.

Developers who specialize in preservation said the booming economy of the past several years helped Nashville save some of its important buildings such as Werthan, the Kress, the Stahlman Building and the old Nashville General Hospital. Today’s rocky environment has made it more difficult to get financing for projects.

Creativity and unconventional thinking also is required when making old spaces new again and usable for today’s lifestyles.

White said many of the best located, most architecturally interesting buildings have been renovated. Most of the remaining buildings downtown are too small to put in lofts large enough to suit buyers and still satisfy city codes.

Many of Nashville’s historic brick structures are being used on the ground floor for retail shops, but few have any use in the top floors. The long, narrow buildings only allow for windows in the front and back, making condos virtually impossible and offering little window frontage to retailers, said architect Ron Gobbell of Gobbell Hays Partners Inc. in Nashville. The spaces also have no room for parking, and some are too small for elevators.

“Key to all of this is finding viable business uses for these properties. We’ve got hundreds of historic structures that are just dying,” he said.

Gobbell was able to make his office building on Fifth Avenue viable by turning the back of the long building into a parking garage. The Kress building did the same, using a “car elevator” to take vehicles to the bottom level of the garage.

Some of the buildings that have been transformed into lofts have cut skylights in the ceilings to let in natural light and create a courtyard atmosphere inside. Lofts on Second Avenue have such a courtyard, as does Homewood Suites, an office building turned hotel on Church Street.

Gobbell points to the “piano building” at 242 Fifth Ave., along with others next to it, as structures in need of saving. Preservation convention goers will tour all floors of the building to see its challenges.

The building is so named because it was at one time a store that sold pianos. Today, the tall, carved building is only being used on the ground floor as a beauty supply store.


“Cities have built entire tourist industries around historic structures,” said Gobbell, pointing to Nashville’s Second Avenue and Broadway districts. “Historic structures do a much better job to create a fabric of the city than a lot of our modern structures do. If they don’t function, it winds up being a surface parking lot. You lose the history, you lose the character, but you also lose the overall fabric of the city.”

The former Third National Bank building sat empty for 10 years after the last tenant moved out in 1986. At one time, a developer was going to demolish the property and build an office tower. Those plans eventually fell through, and Nashville’s first steel skyscraper was saved by a Charleston, S.C., developer. The government’s historic tax credit made it possible, said Gary Everton, architect for the Marriott Courtyard that now fills the space.

Everton points to the hotel’s marble floors, ornate gate doors and limestone features that were there before the building was converted. He said craftsmanship like that can never be recreated in a new building. It’s just too expensive to do today, he said.

“There’s something about that heritage of who we are that makes us feel more grounded and connected. You feel you are part of an ongoing heritage,” Everton said.

That’s why he bought an old church on Fourth Avenue and turned it into his architecture offices. Everton’s office has high ceilings with the exposed beams of the church’s steeple.

Gobbell did the same thing with a building that was a dance school. Both will be featured in the tours during the October convention.

Downtown buildings, Nashville’s urban neighborhoods and the area’s historic plantations will be a laboratory for professionals to gain insight. The conference attendees with go on 37 tours and attend 100 classes on what went right and wrong in Nashville.

Ann Roberts, who served as the director of the Metropolitan Historical Commission for 26 years, has been helping The National Preservation Conference organizers set up tours of Nashville’s icons. Such work reminds her of those that aren’t here to be shown.

A Home Depot now stands on Gallatin Road, where an historic home dating before the 1800s used to be.

Nashville had a courthouse square in 1784 with 19th century buildings that “looked like Paris,” she said. They were demolished in the 1970s.

Roberts wasn’t involved in that battle, but she does remember the fight to save the train shed in the late 1980s. The structure was behind Union Station and had a unique gabled roof. The owners couldn’t pay the taxes on it, and rather than repairing it, they demolished it in 2001 because some trusses were not safe.

The preservation movement has been propelled by the green movement, as more consumers demand buildings not be torn down and materials thrown into land fills. Preservationists hope environmental stewardship, as well as the tourism dollars that historic buildings can draw, will keep these projects viable.

While the pace of preservation has slowed because of wobbly financial markets, it won’t stop, said Bert Mathews, developer of the lofts in the $14.5 million Stahlman and a $5.5 million renovation along Second Avenue.

He’s pushing to get an historic tax credit on the trolley barns that are part of the Rolling Mill Hill development and slated to converted into retail shops.

Others are pressing on, too. White is beginning his next phase of Werthan Mills. And developers of the downtown Hotel Indigo, two former bank buildings on Union Street that are being renovated, will open this fall to guests.

The National Trust for Historic Preservation chose Nashville for its conference four years ago for its preservation ethic in local government, walkability and wealth of historic resources, said Lori Feinman, assistant director for conferences and training for the trust.

She said Nashville’s preservation efforts are successful because of people’s passion for its music heritage and Civil War history — a passion that breeds sustainability.

“Why tear down what’s there? This is the way we can green our cities,” Feinman said.

Tenn. drawing first-time home buyers

Tenn. drawing first-time home buyers
Friday, September 18, 2009, 2:48pm CDT
Nashville Business Journal

Tennessee has the 13th highest rate of residents taking advantage of the first-time homebuyer credit, the Internal Revenue Service said.

About 36,000 Americans have so far taken advantage of the credit, out of 1.4 million Americans total.

The tax credit of up $8,000 expires Dec. 1. Eligible home purchases must be closed on or before Nov. 30, IRS spokesman Dan Boone said. Taxpayers can claim the credit on their 2008 returns or claim it next year.

The credit is 10 percent of the purchase price of the home, to a maximum of $8,000 for either a single taxpayer or a married couple filing jointly. The credit reduces the taxpayer’s tax bill or increases his or her refund, dollar for dollar.

The full credit is reduced or eliminated for higher-income taxpayers and those who fall under certain other guidelines.

Why it's time to invest in real estate

Why it's time to invest in real estate

It's scary to jump into the housing market when prices have been plunging. But waiting could end up costing you.

By James B. Stewart, SmartMoney

Passing through the Fort Myers, Fla., airport a few weeks ago, I noticed people eagerly signing up for a free bus tour of foreclosed real estate -- with all properties offering water views. During the ride to my hotel, the young driver volunteered that he'd just bought his first house, paying $65,000 for a foreclosed property in nearby Cape Coral that had last sold for more than $250,000. He said he'd never expected to be able to buy anything on a driver's salary, let alone something that nice.

Late last month, Standard & Poor's reported that its S&P/Case-Shiller U.S. National Home Price index of real-estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years. Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.

In short, the data suggest that real-estate prices hit a bottom some time during the second quarter and have now begun to rise. There's no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free fall.

That means if you've been sitting on the fence, it's time to act.

Trying to buy at a bottom

Ordinarily I'd never try to time the real-estate market, but I can understand why buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock.

But with real-estate prices nationally now down about 30% from their 2006 peak and showing signs of turning up, the prices aren't likely to go much lower. Every real-estate market is local, and so there may be a few exceptions. Overall, though, I can't imagine a better time to buy than right now.

In addition to bargain prices, buyers should find plenty of homes to choose from. The inventory of unsold homes was 4.09 million units in July, up 7.3% from June, according to the National Association of Realtors. And mortgage rates this week were at a two-month low of close to 5%.

Even the stricter appraisal process is working to the advantage of buyers. Appraisals are coming in far lower than most sellers have been expecting, forcing them to face the new reality of sharply lower prices. And with stricter standards, lenders aren't going to let buyers borrow more than they can afford, which protects buyers and helps to keep prices down.

The flipping days are over

Unless you're really prepared to accept the demands (and headaches) of being a landlord, I don't recommend direct ownership of real estate as an investment. The days of buyers lining up to buy and flip Miami Beach and Las Vegas condos are mercifully gone. There are much easier ways to make money in real estate, such as buying into real-estate investment trusts or buying shares in homebuilders and other housing-related businesses, such as Home Depot (HD, news, msgs).

Historically, the mean rate of return on real estate has been around 3%, according to research from Yale economist Robert Shiller, who co-developed the Case-Shiller index. Shares in REITs and other stocks have often done much better.

But there's a good reason homeownership has been such a central part of the American dream. It delivers security, pride of ownership, a sense of community and decent investment returns as a bonus.

I felt glad for my driver in Florida. He represents the other side of the foreclosure crisis. For every hardship story, and no doubt there are many, others are realizing their dreams of homeownership and getting what may well turn out to be the deals of their lives.

CLOSINGS EXCEED 2,000 FOR THIRD CONSECUTIVE MONTH

According to GNAR (the Greater Nashville Association of Realtors) there were 2,064 home closings in Greater Nashville during August, down just 9.2 percent from the 2,273 closings in August of 2008. Year-to-date closings are 13,518, down 23.8 percent from the 17,758 closings through August of last year.

The median price for a single-family home was $160,000 and for a condominium in Nashville it was $147,900. The median prices were $177,500 and $162,500 for single-family homes and condominiums respectively during August of last year. Short sales and foreclosures have had a negative effect on prices in the last 12 months.

Inventory is down overall, and down specifically for single-family homes and condominiums. Multi-family properties and farms, land and lots are both up from past levels.

For the whole press release, please click here.

US Real Estate Market Review

It is looking more and more like housing is in a recovery mode. On a national level, sales of new homes spiked 9.6% in July or 433,000 units. That was 40,000 more sales than were forecasted. The increase was also the largest since February 2005. The bump in sales helped reduce the inventory of new homes a 7.5-month supply, the lowest in 16 years.

According to the S&P/Case-Shiller home-price index, 18 of the 20 cities tracked showed improvement in June, up from eight in May, four in April, and only one in March. Robert Shiller, co-creator of the index and a vocal bear on housing, admitted to Bloomberg that "we might be seeing a turnaround."

While most of the recovery has been seen in lower priced homes, that appears to be shifting as well. Toll Brothers, a luxury homebuilder, is feeling confident enough to start reducing incentives and raising prices in selected communities. CEO Robert Toll said, "We believe that customers are recognizing that now is the time to get into the market to take advantage of near-record affordability in what is still, for now, a buyer's market."

The broader economic news seems to be picking a bit as well. Thanks mainly to the "cash for clunkers" program, durable goods jumped 4.9% in July. GDP shrank by 1%in the second quarter of 09, but that was significantly less than the previous 2 quarters. Up to 9.7% in August, unemployment remains a significant problem; however, many of the so-called discouraged workers are renewing their search. While this increases the unemployment figures, it is usually a sign that optimism is returning and a recession is beginning to fade.

Finally, mortgage rates continue to hold steady. The 30-year fixed-rate loan is still at 5.5% while the 15-year fixed-rate and five-year adjustable-rate loans continue to hover below 5%. Today's housing market remains a buyer's market, with low prices and low borrowing rates, but that may be beginning to change.

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