Vol. 6, No. 9 – April 23, 2007

 

 

Tighter Lending Standards Good For Housing, But Will Dampen Sales

 

Tighter lending criteria and fallout from the subprime loan debacle will lead to a healthier housing market with greater assurance that owners can handle mortgage adjustments, but higher loan standards will slow the housing recovery, according to the latest forecast by the National Association of Realtors®.

 

David Lereah, NAR’s chief economist, said the changes are necessary for the long-term health of the housing market.  “We want people to be able to stay in their homes with mortgage terms they understand and can handle,” he said.  “Simply stated, a loan with the lowest monthly payment probably isn’t in your best interests – borrowers need to understand worst-case scenarios. If you’re in a mortgage you aren’t comfortable with, now is an excellent time to refinance, if you can, with historically low rates on safer conventional loans.”

 

Last week, Freddie Mac reported the 30-year fixed-rate mortgage was 6.17 percent. The 30-year fixed rate should rise slowly to 6.6 percent by the end of this year, so borrowers who need to refinance should act soon.

 

“Tighter lending standards will dampen home sales a bit, but by less than a couple of percentage points from initial projections. We still forecast 2007 to be the fourth highest year on record for existing-home sales, and housing remains a great long-term investment,” Lereah said.

 

Existing-home sales are likely to total 6.34 million in 2007 and 6.52 million next year, in contrast with 6.48 million in 2006. New-home sales are seen at 904,000 this year and 935,000 in 2008, below the 1.05 million last year. Housing starts are estimated at 1.47 million in 2007 and 1.55 million next year, down from 1.80 million units in 2006.

 

“As home sales moderate, overall home prices will be essentially flat this year,” Lereah said.  “The good news is that inventories remain well below the levels experienced during the last housing downturn in the early 1990s, and supplies are close to balance in many areas.”

 

The national median existing-home price will probably slip 0.7 percent to $220,300 in 2007, following a 1.0 percent rise last year.  The median new-home price is projected to increase 0.4 percent to $246,200 this year, after gaining 1.8 percent in 2006.  Modest growth is expected next year, with existing-home prices increasing 1.6 percent and new-home prices rising 2.0 percent.

 

“When you look at housing activity in 2007, especially during the first half of this year, the percentage change in median home price is being distorted as the composition of sales shifts geographically from high-cost markets to moderately priced areas, in contrast with the sales distribution a year earlier,” Lereah said. “Within given markets, most areas can expect minor price gains.”

 

The unemployment rate should average 4.6 percent in 2007, the same as last year.  Inflation, as measured by the Consumer Price Index, is likely to decline to 2.1 percent this year, compared with 3.2 percent in 2006, while growth in the U.S. gross domestic product is forecast at 2.3 percent in 2007, down from 3.3 percent last year.  Inflation-adjusted disposable personal income will probably rise 3.1 percent this year, up from a gain of 2.6 percent in 2006.

 

Source: National Association of Realtors, April 11, 2007

 

Ten Secrets to Success in Business

By Bill Lee

 

Investor's Business Daily has spent years analyzing leaders and successful people in all walks of life. Most have 10 traits that, when combined, can turn dreams into reality.

1. How you think is everything: Always be positive. Think success, not failure. Beware of a negative environment.

2. Decide upon your true dreams and goals: Write down your specific goals and develop a plan to reach them.

3. Take action: Goals are nothing without action. Don't be afraid to get started now. Just do it.

4. Never stop learning: Go back to school, read books, listen to CD programs or watch DVD programs. Get training and acquire skills.

5. Be persistent and work hard: Success is a marathon, not a sprint. Never give up.

6. Learn to analyze details: Get all the facts, all the input. Learn from your mistakes.

7. Focus your time and money: Don't let other people or things distract you.

8. Don't be afraid to innovate; be different: Following the herd is a sure way to mediocrity.

9. Deal and communicate with people effectively: No person is an island. Learn to understand and motivate others.

10. Be honest and dependable; take responsibility: Otherwise, numbers 1-9 won't matter.

 

Source: Bill Lee’s Management Tips Newsletter, Courtesy of Bill Lee, Lee Resources, Inc., April 20, 2007

 

 

 

 

IN MEMORIAM

 

It is with the deepest regret that we inform you of the death of Dale Morrow, Morrow-Gill Lumber Co., in Sand Springs, Okla. Dale passed away peacefully on Monday, April 9, at the age of 95. Services were held on Thursday, April 12, at the Broadway Baptist Church, 1000 Adams Road in Sand Springs.

 

The family requests memorials be made to the church in his name. Please join us in remembering his daughter, Vickie, and the rest of the family in the difficult days ahead.

 

Information courtesy of ABS.

 

 

LUMBER NEWS – QUICK GLIMPSES

 

Commerce Applies Trade Sanctions to China... The U.S. Department of Commerce recently announced that it would be applying anti-subsidy laws to imports from China, overturning a 23-year bi-partisan policy of not applying countervailing duty law to non-market economies and marking the first time that countervailing duties will be charged on a non-market economy.

 

"China's economy has developed to the point that we can add another trade remedy tool, such as the countervailing duty law," said Commerce Secretary Carlos Gutierrez. "By acting on the petition filed last October, the United States… is demonstrating its continued commitment to leveling the playing field for American manufacturers, workers and farmers."

 

Source: NACM E-news Weekly Update, April 10, 2007

 

Foggy expectations No. 1 reason why new hires leave… You can decrease your turnover rates by making clear what will be expected of a hire, starting with the very first interview. According to managers, new hires leave for a variety of reasons, including poor communication with their direct supervisor, a lack of belonging or purpose or inability to connect with other employees. "Basically, the individual gets to the job and doesn't have the guidance or the support to learn the ropes, so they flounder, and they quit," said an executive consultant at Novations Group.

 

Source: U.S. Chamber SmartBrief, April 11, 2007

 

Retailing Trends… Most retailers would not be surprised by the results of a recent study by National In-Store and M/A/R/C Research. The study looked at the effects on sales and customer satisfaction from long waits at the checkout and suggested that customer dissatisfaction increases along with the time spent in line. The report states that one in 10 shoppers who did not purchase anything at a store left the store, citing their reason for leaving was the long wait for checkout. The study included responses from 3,500 in-store audits and more than 17,000 shoppers at retail stores. A checkout time of one to three minutes was ideal and left most shoppers (more than 90 percent) extremely satisfied, but satisfaction levels fell below 80 percent after four to five minutes. Any longer than five minutes and satisfaction declines sharply.

 

Source: HCI Business Report, Home Center Institute, April 12, 2007

 

Different Takes on the Future of the Softwood Agreement… Insiders apparently believe that the recent softwood agreement between the United States and Canada may not last beyond its infancy.

 

"This agreement does not provide for long-term resolution of this dispute," announced Doug Waddell, a former Canadian deputy minister involved in the negotiations. His American counterpart, Grant Aldonas, agreed: "The agreement will not be durable ... the dynamics going on in business are changing so quickly."

 

Other sources seek to strengthen the agreement. Coalition for Fair Lumber Imports Chairman Steve Swanson stated, "The SLA is a compromise, and we would have much preferred fully open and competitive Canadian timber markets as the solution to the unfair trade problem. But the SLA can and should be an enduring solution if its requirements are observed. The Canadian government presently is not applying export measures as required by the agreement, and provinces are providing forbidden subsidies. It is imperative that these issues be resolved quickly, and we support ongoing efforts to resolve them."

 

Source: LBM Daily, April 13, 2007

 

U.S., Canada to Meet Again in Softwood Lumber Dance… Officials from the U.S. and Canada will meet again this week over the softwood lumber deal. The U.S. has raised several concerns over the last few weeks about the legality of certain parts of the deal, including loan and tax credit programs for Canadian provinces.

 

Although no official statements have been released this week, Zoltan van Heyningen, director of the Coalition for Fair Lumber Imports did praise the need for the upcoming meeting.

 

Source: LBM Daily, April 17, 2007

 

Jobless Claims Jump Unexpectedly... The U.S. Department of Labor's most recent unemployment figures jumped unexpectedly to hte highest levels in two months. The number of jobless claims reported was 342,000 up by 19,000 from the previous week and up by 35,000 over the same period last year. Analysts predicted that the number, which jumped by 13,000 the previous week, would be significantly lower. The jobless claims last reached a number this high the week of February 10th.

 

By state, the largest increases in initial claims were in Oregon (+1,780), Missouri (+1,676), Alabama (+946), Kentucky (+831) and New Jersey (+771), while the largest decreases were in Michigan (-1,681), New York (-1,491), California (-1,489), Florida (-1,338) and Oklahoma (-1,006).

 

Source: NACM E-News Weekly Update, April 17, 2007

 

Home Construction Up For Second Month… Construction of new homes rose for a second straight month in March, providing at least the glimmer of hope that the worst of the housing downturn may be over. The Commerce Department said that builders started work on 1.518 million new homes at a seasonally adjusted annual rate in March, an increase of 0.8 percent. In February, housing construction had risen by 7.6 percent.

 

Source: Builder Business Update, April 17, 2007

 

Lumber Producers Facing Slump… Ratings company Standard & Poor's stated that lumber companies in the U.S. may see a downward turn in profits this year due to a decline in the construction of new homes.

 

Without being specific as to which companies were in trouble, the S&P reported “earnings for wood product manufacturers are likely to be weak this year.”

 

Source: LBM Daily, April 18 ,2007

 

Survey: Health care most valuable benefit… The National Business Group on Health surveyed companies with more than 2,500 employees and found most workers value health benefits above all other benefits. The majority of workers said they would rather face a salary cut or a reduction in retirement benefits than lose their health care benefits.  

 

Source: U.S. Chamber SmartBrief, April 18, 2007 from The Washington Post

 

U.S. Trade Commission To Look at Hardwood Logging… The U.S. International Trade Commission has started to look at the logging practices of countries like China, to see if (and how) they are affecting the U.S. hardwood industry.

 

The probe is the result of allegations that upwards of 30% of U.S. hardwood imports come from illegal logging.

 

The panel's results are expected in June 2008.

 

Source: LBM Daily, April 19, 2007

 

Stay in Touch with Retirees… As competition heats up for employees, savvy firms are staying in touch with their retirees by newsletters or emails. They are inviting them to company events such as picnics and Christmas parties. Many companies are creating a permanent relationship with their alumni by continuing to use their talent and skills. You can use them as a contingent workforce, as trainers, telemarketers, and/or mentors. Had you thought about the possibility of using those that are skilled in certain areas as lobbyists? Many of them would jump at the chance to work one day a week, or during times when their state legislatures are in session. Before they retire, sit down with them and gauge their interest. You will find their part time help invaluable because they know your organization and industry better than most.

 

Source: Bob Losyk, MEd., M.B.A., C.S.P., a Certified Speaking Professional, master trainer, author, and President & CEO of Innovative Training Solutions, a Greensboro, NC consulting firm.  For more information on Bob’s keynotes, seminars, best practices facilitation, panel discussion leader, and products, please visit his websites at www.boblosyk.com or call 1-800-995-0344.

 

 

How much is a good name worth?

How do identity thieves operate and what can you do?

 

Ten years ago, we occasionally heard about fraud committed through impersonation, but we didn’t worry about it affecting us. Today, however, our names, addresses, birth dates and Social Security numbers are often worth more to thieves than merchandise, and they are easier to steal.

 

Old fashioned methods – stealing purses or wallets and breaking into homes or businesses – are common practices for identity thieves. More recently, theft of data from corporations, small businesses and even government agencies has increased the risk for more people and businesses. Other methods and preventive measures businesses need to be aware of include:

 

§         “Dumpster diving” (stealing mail and recycled paper documents from the trash) – Make sure all protected information is properly shredded and disks and hard drives are broken in pieces or “wiped” electronically. If you hire an outside business to destroy these records, do a thorough background check of the company first.

 

§         “Skimming” (dishonest employees use small scanning devices to secretly scan debit/credit cards at checkouts) – Investigate prospective employees before hiring. Monitor sales activity and question suspicious behavior by employees such as swiping customers’ cards twice. Also watch for unfamiliar devices near a register. Review your credit sales reports and check for multiple charge-backs.