Pace Executive MBA - Business Analysis Project on Macro and Statistical Analysis of Real Estate Investment.
We created a Market Report of Macroeconomic Indicators for distribution to Fidelity and their investors in order to keep them apprised of current macroeconomic factors relevant to the Real Estate industry, risks and performance.
Centex Corporation held a second quarter conference call to discuss financial results. They are navigating an unprecedented economic environment through strategic actions. Centex reduced homebuilding and corporate expenses by 39% year-over-year, improved gross margins sequentially, and exited non-core businesses. They accumulated cash, ended the quarter with $1.30 billion, and paid off $150 million in debt. Centex is taking actions to emerge from the downturn with strength by gaining market share and having sufficient land.
The Federal Open Market Committee (FOMC) decided to maintain the federal funds rate at its current level due to low inflation and international economic uncertainties. While the labor market continues to improve, inflation remains below the FOMC's target. The FOMC also noted diverging views among its members, with some expecting a rate hike this year and others expecting rates to remain unchanged. Projections for economic growth were lowered for 2016-2017, while unemployment is expected to remain near its current level.
The document summarizes that:
1) The recent summer stock market decline was relatively small compared to past corrections.
2) The US economy and company fundamentals do not indicate an impending recession.
3) Stock valuations remain reasonable given long-term market trends of volatility followed by growth.
The document summarizes JPMorgan Chase's 2Q09 financial results. Key highlights include:
- Net income of $2.7 billion and earnings per share of $0.28.
- Record firmwide revenue of $27.7 billion for the first half of 2009.
- Maintained a strong capital position with a Tier 1 capital ratio of 9.7% and Tier 1 common ratio of 7.7%.
- Extended $150 billion in new credit and approved 138,000 mortgage modifications in 2Q09.
The document discusses how interest rates have reached historically low levels following the 2008 financial crisis and government interventions. This has resulted in negative real rates, narrow credit spreads, and high bond duration, exposing investors to inflation and interest rate risks. The low yield environment benefits some groups like homeowners and governments but poses challenges for pension funds, banks, and asset managers. The duration of low rates is uncertain and will depend on economic growth and inflation. The document reviews strategies for investors to enhance yields in this environment.
This document provides an overview of monetary policy and the role of the Federal Reserve. It begins with sample questions about inflation, recessions, banks, and monetary policy. It then compares the Great Depression and Great Recession in terms of declines in GDP, unemployment, and world trade. The remainder discusses the Federal Reserve System and its tools of monetary policy. It asks questions about setting reserve rates, the Fed's role as lender of last resort, and why the Fed Chairman is influential. Finally, it prompts writing letters regarding monetary policy stances and recommended fiscal policy changes.
Terrence Wittman is a financial advisor at LPL Financial located in Bloomingdale, Illinois. The document discusses the performance of domestic and global markets for the week ending July 27, 2012. It notes that encouraging words from the European Central Bank president helped the Dow industrials return above 13,000. Housing and durable goods data from the US were mixed. The article previews upcoming economic reports and Federal Reserve meeting.
The document discusses concerns about high levels of government debt in the U.S. and abroad. While efforts will need to be made eventually to reduce deficits, acting too soon could weaken the economic recovery. Looking ahead, there are no easy solutions to addressing government debt issues. The federal budget deficit has soared during the recession due to falling tax revenues and temporary spending programs, but deficits are justified during severe recessions to allow time for private sector recovery. However, the deficit will need to decrease as a percentage of GDP over time as the economy improves. The larger long-term worry is the outlook for programs like Social Security.
Centex Corporation held a second quarter conference call to discuss financial results. They are navigating an unprecedented economic environment through strategic actions. Centex reduced homebuilding and corporate expenses by 39% year-over-year, improved gross margins sequentially, and exited non-core businesses. They accumulated cash, ended the quarter with $1.30 billion, and paid off $150 million in debt. Centex is taking actions to emerge from the downturn with strength by gaining market share and having sufficient land.
The Federal Open Market Committee (FOMC) decided to maintain the federal funds rate at its current level due to low inflation and international economic uncertainties. While the labor market continues to improve, inflation remains below the FOMC's target. The FOMC also noted diverging views among its members, with some expecting a rate hike this year and others expecting rates to remain unchanged. Projections for economic growth were lowered for 2016-2017, while unemployment is expected to remain near its current level.
The document summarizes that:
1) The recent summer stock market decline was relatively small compared to past corrections.
2) The US economy and company fundamentals do not indicate an impending recession.
3) Stock valuations remain reasonable given long-term market trends of volatility followed by growth.
The document summarizes JPMorgan Chase's 2Q09 financial results. Key highlights include:
- Net income of $2.7 billion and earnings per share of $0.28.
- Record firmwide revenue of $27.7 billion for the first half of 2009.
- Maintained a strong capital position with a Tier 1 capital ratio of 9.7% and Tier 1 common ratio of 7.7%.
- Extended $150 billion in new credit and approved 138,000 mortgage modifications in 2Q09.
The document discusses how interest rates have reached historically low levels following the 2008 financial crisis and government interventions. This has resulted in negative real rates, narrow credit spreads, and high bond duration, exposing investors to inflation and interest rate risks. The low yield environment benefits some groups like homeowners and governments but poses challenges for pension funds, banks, and asset managers. The duration of low rates is uncertain and will depend on economic growth and inflation. The document reviews strategies for investors to enhance yields in this environment.
This document provides an overview of monetary policy and the role of the Federal Reserve. It begins with sample questions about inflation, recessions, banks, and monetary policy. It then compares the Great Depression and Great Recession in terms of declines in GDP, unemployment, and world trade. The remainder discusses the Federal Reserve System and its tools of monetary policy. It asks questions about setting reserve rates, the Fed's role as lender of last resort, and why the Fed Chairman is influential. Finally, it prompts writing letters regarding monetary policy stances and recommended fiscal policy changes.
Terrence Wittman is a financial advisor at LPL Financial located in Bloomingdale, Illinois. The document discusses the performance of domestic and global markets for the week ending July 27, 2012. It notes that encouraging words from the European Central Bank president helped the Dow industrials return above 13,000. Housing and durable goods data from the US were mixed. The article previews upcoming economic reports and Federal Reserve meeting.
The document discusses concerns about high levels of government debt in the U.S. and abroad. While efforts will need to be made eventually to reduce deficits, acting too soon could weaken the economic recovery. Looking ahead, there are no easy solutions to addressing government debt issues. The federal budget deficit has soared during the recession due to falling tax revenues and temporary spending programs, but deficits are justified during severe recessions to allow time for private sector recovery. However, the deficit will need to decrease as a percentage of GDP over time as the economy improves. The larger long-term worry is the outlook for programs like Social Security.
The document discusses how lower oil prices can help moderate the impact of the Federal Reserve normalizing monetary policy. It outlines the Fed's three step process to a more normal policy: 1) increasing borrowing rates starting in late 2015, 2) ending reinvestment of maturing securities, and 3) shrinking its balance sheet. Lower oil prices that have added $1,000 to household income and nearly $2 trillion to GDP could offset tighter monetary policy. If stable, lower energy costs would allow central banks to adjust normalization based on oil prices and support achieving sustainable economic recovery as interest rates rise.
The presentation investigates whether the Federal Reserve can possibly manage asset bubbles (real estate, stocks) in addition to managing its primary goals (inflation, sustainable growth).
This document discusses the importance of financial stability and the role of governments and central banks in maintaining it. It identifies several symptoms of financial instability, such as slowing capital and bank deposit markets. It also describes three main types of financial instability: bank runs and panics, securities market crashes, and price level instability. The document outlines various government interventions that can promote stability, including regulations, oversight institutions, and monetary policy tools. Maintaining financial stability is crucial for sustainable economic growth.
As expected, the Federal Open Market Committee has embarked on another round of planned asset purchases. In its November 3 policy statement, the FOMC wrote that it expects to buy another $600 billion in long-term Treasuries by the end of 2Q11 ($75 billion per month), in addition to the $35 billion per month in reinvested principal payments from its portfolio of mortgage-backed securities. There has been much criticism of the move in the financial press. Certainly, there are risks in the Fed’s strategy. However, it’s hardly reckless or ill-advised.
The Oregon Office of Economic Analysis presented an overview of the travel and tourism industry to the Transient Lodging Tax Workgroup on July 11th, 2016. The workgroup was setup following the passage of HB 4146 which raised the statewide lodging tax. Topic covered include consumer spending on tourism, demographics, employment, geographic footprint of the industry, wages and the outlook.
This document discusses the global financial crisis and its causes. It defines different types of financial crises including banking crises, currency crises, and international crises. It then examines the specific causes of the global financial crisis, including fraudulent lending practices, high leverage, and regulatory failures. Specific events like the dot-com boom and bust, rise in real estate prices, growth of investment banks, creation of collateralized debt obligations, and credit default swaps are analyzed in their contribution to the crisis. The effects included housing market collapse, investment bank failures, government bailouts of institutions like AIG and Lehman Brothers bankruptcy.
Fed must relent. Our expectations now is for a state dependent (global financial conditions to stabilise, cushion rising debt repayment burden and allowing domestic leverage to level off, coupled with still moderate economic growth/inflation, policy options to widen positively globally, especially in China) Fed relent with scope for a final 25-50bps, if any (pause otherwise), in late 2019/2020, should the cycle extents, with the FFR hitting cycle terminal at 2.75-3.00%.
Epic Research offers perfect Forex Signals for their clients that gives accurate results. Our research team with its past experience prepares live charts and track-sheets of IForex Signals through which traders can earn maximum profit from the market place. This report helps you to achieve desired success in the SGX Stock Exchange.
Annie Williams Market Trends Sept-Oct 2014Jon Weaver
- The median home price in San Francisco increased 1.2% year-over-year to $988,500 in August, while condo prices rose 14.1% to $930,000.
- Home sales fell 8.8% compared to the previous August. Condo sales were down 6.3%.
- Foreclosure notices and bank-owned homes continued to decline in the city.
The document provides an economic analysis and outlook from Principal Global Investors. It discusses factors that have contributed to slowing global economic growth, including uncertainty around government policies. While growth has decelerated, the odds of a double-dip recession are seen as low. Emerging markets continue to drive global growth, with China expected to remain above 8% growth. In the US, momentum has slowed but the economy retains positives such as rising incomes and profits supporting investment.
This document summarizes a case study on exchange rate risk and interest rates in Turkey. It outlines the various economic reforms Turkey implemented in the 1980s to shift to an export-led economy, including devaluing the lira, liberalizing prices, and encouraging foreign investment. While exports grew significantly, unemployment and inflation remained problems. The document then discusses various factors that affect exchange rates, noting there is a positive relationship between exchange rate risk and interest rates, as higher risk requires higher interest rates to compensate. It presents results from Turkey showing higher exchange rate risk was correlated with higher interest rates.
The document summarizes JPMorgan Chase's financial results for the first quarter of 2011. Key highlights include:
- Net income of $5.6 billion and earnings per share of $1.28.
- Card Services reported net income of $1.3 billion compared to a net loss in the prior year, driven by lower credit costs.
- The Investment Bank reported net income of $2.4 billion on revenues of $8.2 billion, with strong fixed income and equity markets revenue.
- Retail Financial Services reported a net loss of $937 million in its mortgage banking business due to losses from mortgage servicing rights.
Bank of Canada Decision and Real GDP – Preview
We expect a very close call for the monetary policy decision on Wednesday, with the Bank of Canada (BoC) leaving the overnight rate target unchanged at 1.25%.
PAM2 MK2 Audio Monitoring system training 2014 Anoushka Farouk
The document provides an overview of the front panel controls and menu options of the PAM2-MK2 audio monitoring unit. It describes features such as preset selection, metering views, loudness measurement, audio routing options, and preset standard switching to automatically change monitoring configuration based on input signal format.
This document discusses various topics in Islam, including the purpose of life for Muslims, different types of worship in Islam, marriage and family in Islam, leadership, economics and poverty, and prayer. It covers mandatory acts of worship like prayer, fasting, and charity. It also discusses ethics, marriage, family planning, adoption, sex, leadership, economics, justice, science, the environment, human rights, and work ethic in Islam. Prayer is emphasized as the most important ritual practice and a distinguishing factor between believers and non-believers.
PAM 1 MK2 Audio Monitoring Unit Training 2015 Anoushka Farouk
The document provides explanations and instructions for various features and functions of the PAM1-MK2 audio monitoring unit. It describes the front panel controls, menu navigation, saving and recalling presets, loudness measurement tools, audio routing options using the assign matrix, audio delay settings, loudspeaker muting controls, and preset standard switching which allows the unit to automatically change monitoring settings based on input signal format.
1. Tanggapan frekuensi adalah respons sistem terhadap masukan sinusoidal pada berbagai frekuensi.
2. Diagram Bode dan Nyquist digunakan untuk menganalisis tanggapan frekuensi suatu sistem.
3. Filter frekuensi dirancang untuk melewatkan atau memperlemah pita frekuensi tertentu.
The document discusses how lower oil prices can help moderate the impact of the Federal Reserve normalizing monetary policy. It outlines the Fed's three step process to a more normal policy: 1) increasing borrowing rates starting in late 2015, 2) ending reinvestment of maturing securities, and 3) shrinking its balance sheet. Lower oil prices that have added $1,000 to household income and nearly $2 trillion to GDP could offset tighter monetary policy. If stable, lower energy costs would allow central banks to adjust normalization based on oil prices and support achieving sustainable economic recovery as interest rates rise.
The presentation investigates whether the Federal Reserve can possibly manage asset bubbles (real estate, stocks) in addition to managing its primary goals (inflation, sustainable growth).
This document discusses the importance of financial stability and the role of governments and central banks in maintaining it. It identifies several symptoms of financial instability, such as slowing capital and bank deposit markets. It also describes three main types of financial instability: bank runs and panics, securities market crashes, and price level instability. The document outlines various government interventions that can promote stability, including regulations, oversight institutions, and monetary policy tools. Maintaining financial stability is crucial for sustainable economic growth.
As expected, the Federal Open Market Committee has embarked on another round of planned asset purchases. In its November 3 policy statement, the FOMC wrote that it expects to buy another $600 billion in long-term Treasuries by the end of 2Q11 ($75 billion per month), in addition to the $35 billion per month in reinvested principal payments from its portfolio of mortgage-backed securities. There has been much criticism of the move in the financial press. Certainly, there are risks in the Fed’s strategy. However, it’s hardly reckless or ill-advised.
The Oregon Office of Economic Analysis presented an overview of the travel and tourism industry to the Transient Lodging Tax Workgroup on July 11th, 2016. The workgroup was setup following the passage of HB 4146 which raised the statewide lodging tax. Topic covered include consumer spending on tourism, demographics, employment, geographic footprint of the industry, wages and the outlook.
This document discusses the global financial crisis and its causes. It defines different types of financial crises including banking crises, currency crises, and international crises. It then examines the specific causes of the global financial crisis, including fraudulent lending practices, high leverage, and regulatory failures. Specific events like the dot-com boom and bust, rise in real estate prices, growth of investment banks, creation of collateralized debt obligations, and credit default swaps are analyzed in their contribution to the crisis. The effects included housing market collapse, investment bank failures, government bailouts of institutions like AIG and Lehman Brothers bankruptcy.
Fed must relent. Our expectations now is for a state dependent (global financial conditions to stabilise, cushion rising debt repayment burden and allowing domestic leverage to level off, coupled with still moderate economic growth/inflation, policy options to widen positively globally, especially in China) Fed relent with scope for a final 25-50bps, if any (pause otherwise), in late 2019/2020, should the cycle extents, with the FFR hitting cycle terminal at 2.75-3.00%.
Epic Research offers perfect Forex Signals for their clients that gives accurate results. Our research team with its past experience prepares live charts and track-sheets of IForex Signals through which traders can earn maximum profit from the market place. This report helps you to achieve desired success in the SGX Stock Exchange.
Annie Williams Market Trends Sept-Oct 2014Jon Weaver
- The median home price in San Francisco increased 1.2% year-over-year to $988,500 in August, while condo prices rose 14.1% to $930,000.
- Home sales fell 8.8% compared to the previous August. Condo sales were down 6.3%.
- Foreclosure notices and bank-owned homes continued to decline in the city.
The document provides an economic analysis and outlook from Principal Global Investors. It discusses factors that have contributed to slowing global economic growth, including uncertainty around government policies. While growth has decelerated, the odds of a double-dip recession are seen as low. Emerging markets continue to drive global growth, with China expected to remain above 8% growth. In the US, momentum has slowed but the economy retains positives such as rising incomes and profits supporting investment.
This document summarizes a case study on exchange rate risk and interest rates in Turkey. It outlines the various economic reforms Turkey implemented in the 1980s to shift to an export-led economy, including devaluing the lira, liberalizing prices, and encouraging foreign investment. While exports grew significantly, unemployment and inflation remained problems. The document then discusses various factors that affect exchange rates, noting there is a positive relationship between exchange rate risk and interest rates, as higher risk requires higher interest rates to compensate. It presents results from Turkey showing higher exchange rate risk was correlated with higher interest rates.
The document summarizes JPMorgan Chase's financial results for the first quarter of 2011. Key highlights include:
- Net income of $5.6 billion and earnings per share of $1.28.
- Card Services reported net income of $1.3 billion compared to a net loss in the prior year, driven by lower credit costs.
- The Investment Bank reported net income of $2.4 billion on revenues of $8.2 billion, with strong fixed income and equity markets revenue.
- Retail Financial Services reported a net loss of $937 million in its mortgage banking business due to losses from mortgage servicing rights.
Bank of Canada Decision and Real GDP – Preview
We expect a very close call for the monetary policy decision on Wednesday, with the Bank of Canada (BoC) leaving the overnight rate target unchanged at 1.25%.
PAM2 MK2 Audio Monitoring system training 2014 Anoushka Farouk
The document provides an overview of the front panel controls and menu options of the PAM2-MK2 audio monitoring unit. It describes features such as preset selection, metering views, loudness measurement, audio routing options, and preset standard switching to automatically change monitoring configuration based on input signal format.
This document discusses various topics in Islam, including the purpose of life for Muslims, different types of worship in Islam, marriage and family in Islam, leadership, economics and poverty, and prayer. It covers mandatory acts of worship like prayer, fasting, and charity. It also discusses ethics, marriage, family planning, adoption, sex, leadership, economics, justice, science, the environment, human rights, and work ethic in Islam. Prayer is emphasized as the most important ritual practice and a distinguishing factor between believers and non-believers.
PAM 1 MK2 Audio Monitoring Unit Training 2015 Anoushka Farouk
The document provides explanations and instructions for various features and functions of the PAM1-MK2 audio monitoring unit. It describes the front panel controls, menu navigation, saving and recalling presets, loudness measurement tools, audio routing options using the assign matrix, audio delay settings, loudspeaker muting controls, and preset standard switching which allows the unit to automatically change monitoring settings based on input signal format.
1. Tanggapan frekuensi adalah respons sistem terhadap masukan sinusoidal pada berbagai frekuensi.
2. Diagram Bode dan Nyquist digunakan untuk menganalisis tanggapan frekuensi suatu sistem.
3. Filter frekuensi dirancang untuk melewatkan atau memperlemah pita frekuensi tertentu.
Suomalaiseen omakotitalokantaan liittyy vahvasti uskomus, että rakennuksia on pidetty hyvässä kunnossa ja niissä on vähän teknisiä ongelmia. Muutamat hometalotapaukset ovat nousseet otsikoihin, mutta niidenkään yhteydessä ei juuri ole puhuttu siitä, mikä on nämä homeongelmat todellisuudessa aiheuttanut.
Raksystems Anticimex on Suomen johtava kuntotarkastaja ja ollut mukana kehittämässä alan menettelytapoja jo 1990-luvun puolivälistä alkaen. Vuosien varrella perusteellisia kuntotarkastuksia on tehty yli 50 000 kiinteistöön.
Raksystems Anticimex teki loppuvuodesta 2009 omaan kuntotarkastusaineistoonsa pohjautuvan selvityksen korjaustarpeesta ja vaurioiden yleisyydestä. Selvitys perustuu viimeisen kahden vuoden aikana eri puolilla maata yhtiön toimesta tehtyihin kuntotarkastuksiin.
Selvityksen tulokset kertovat, että suomalaissa omakotikiinteistöissä on huomattavan paljon vaurioituneita rakenteita ja ne aiheuttavat korjaamattomina monia vakavia ongelmia. Lisäksi kiinteistöissä on paljon puutteita ja eriaikakausien rakennustavoista johtuvia riskirakenteita, jotka eivät vielä ole ehtineet aiheuttaa vaurioita. Yhteistä lähes kaikille vaurioille ja ongelmarakenteille on se, että niistä aiheutuu kosteuden pääsyä sellaisiin paikkoihin, joihin se ei ole tarkoitettu. Kostuvat rakenteet aiheuttavat homeen kasvua, joka puolestaan sisäilmaan päästessään kärjistää ongelman ”hometaloksi”. Yhteistä vaurioille ja puutteille on myös se, että pääosin ne olisi voitu estää säännöllisin tarkastuksin. Ainakin niiden korjauskustannukset olisivat vain murto-osa siitä tilanteesta, että ne havaitaan vasta kun ”vesi tai home tulee sisään”.
PAM1 MK2 Audio Monitoring system training 2014 Anoushka Farouk
TSL Products' manufacture a range of Audio Monitoring products for music, TV and film broadcasting applications.
The PAM1 MK2 Audio Monitoring system is an evolutionary step up from the original PAM1-3G8, offering an improved feature set and user interface, upgraded speaker system, larger screens and a full set of functions carried over from the flagship PAM2 MK2 Precision Audio Monitor. See our comprehensive training video on the capabilities of this piece of equipment or visit our website for more information:
http://www.tslproducts.com/our-products/audio-monitoring/
1) A force can produce various effects on an object like moving a stationary object, changing the speed or direction of a moving object, or changing the shape of an object.
2) Forces are balanced if their resultant is zero, and unbalanced if their resultant is non-zero. Unbalanced forces cause changes in motion.
3) Newton's three laws of motion describe the relationship between forces and motion of objects. The first law states that objects at rest stay at rest and moving objects stay in motion unless acted upon by an unbalanced force. The second law relates force, mass, and acceleration. The third law states that for every action force there is an equal and opposite reaction force.
1. Dokumen ini membahas tentang tanggapan frekuensi pada rangkaian elektrik dan analisisnya menggunakan diagram Bode dan Nyquist.
2. Tanggapan frekuensi menggambarkan besar gelombang sinus keluaran sebagai fungsi dari frekuensi masukan.
3. Ada beberapa jenis filter frekuensi seperti low pass, high pass, band pass, dan band stop untuk melewatkan atau memperlemah pita frekuensi tertentu.
Bandam Sathish is a Linux system administrator with 2 years of experience. He has technical skills in Linux, networking, and operating systems like Red Hat Enterprise Linux 6, Windows Server 2012, and others. His work experience includes managing 500+ Linux servers globally and providing 24x7 operational support as part of his role at Quantum Value IT Services Pvt Ltd since 2014. His responsibilities involve user administration, performance monitoring, software installation, troubleshooting hardware and network issues, and configuration of services like NFS, SSH, and Veritas Cluster Server. He holds a B.Tech in ECE from Swami Vivekananda Institute of Technology.
1) Forces only exist as a result of an interaction between two objects. Balanced forces do not cause a change in motion as they are equal in size and opposite in direction. Unbalanced forces always cause a change in motion as they are not equal and opposite.
2) The first law of motion states that an object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.
3) The second law of motion states that the rate of change of momentum of an object is directly proportional to the applied force and changes in the same direction as the applied force. Mathematically, this is expressed as Force = Mass ×
The entry of international fast food giant 'The Burger King' into India is studied in this presentation for the business strategies involved in the whole process
The document provides information on a private equity real estate fund managed by LaSalle Investment Management. It introduces the team managing the fund and provides an executive summary and overview of the US macroeconomic environment, real estate market trends, proposed fund structure, investment strategy, and target markets. The fund will target a 13-16% return through investments in multifamily, office and data center properties in high growth markets like Austin, TX, Atlanta, GA, Charlotte, NC, Raleigh-Durham, NC and Omaha, NE.
This document discusses policy lags, the crowding-out effect, and how monetary and fiscal policy tools can impact inflation and real output in the short-run. It defines inside lags as the time for policymakers to recognize the need for and implement policy changes, and outside lags as the time for an economy to respond to policy. Crowding-out refers to how increased government borrowing to finance deficits can increase interest rates and crowd-out private borrowing and investment. The document uses aggregate demand and supply models to illustrate these concepts and how monetary policy actions like changing the money supply can lessen or reinforce the crowding-out effect of fiscal policy.
This document provides an economic and market outlook for the second quarter of 2014. It summarizes recent economic indicators such as GDP, housing, oil prices, employment, and interest rates. It then reviews the performance of various financial markets in the first quarter of 2014, including equity, fixed income, and asset class returns. Overall, it finds that the US economy continues a slow recovery while most major asset classes experienced positive returns in Q1.
- US economic growth is expected to accelerate to over 3% in the coming years, helping boost stock prices and profits. This is unlike other forecasters who predicted too early an acceleration.
- Long-term Treasury bonds are expected to underperform due to rising interest rates, making them unattractive investments. The 10-year Treasury yield is projected to reach 3-4% in the next 3 years.
- While the US economy looks strong now, concerns are raised about the risks of the Federal Reserve raising interest rates too quickly by 2018, which could cause a recession. Careful monetary policy will be needed in the coming years.
The document discusses interest rates and inflation trends over recent decades and their impact on mortgage rates, bond yields, and retirement savings. It notes that while rates had declined significantly since the 1970s and 1980s, inflation has remained low in recent years, averaging just 1.7% over the past three years. This has led some to question whether the current low rate environment represents a "new normal." The document examines various economic factors that could influence the direction of future rate changes, such as wage growth, unemployment levels, and actions by the Federal Reserve.
PulteGroup presented an investor presentation in May 2013 that highlighted:
- Housing market data pointing to a sustained recovery as excess supply is reduced and demand increases.
- PulteGroup's value creation initiatives are improving returns through higher margins, greater overhead leverage, faster inventory turns, and better capital allocation.
- PulteGroup reported improved Q1 2013 financial results including higher revenues, margins, and backlog compared to prior year. Gross margins increased 420 bps to 22.9% while SG&A fell 340 bps.
Ready for the next recession? Assessing the UK’s macroeconomic frameworkResolutionFoundation
The UK economy is facing its highest risk of recession since 2007, as Brexit uncertainty and global instability loom large. When the next downturn will arrive is impossible to say, but now is a good time to ensure that we are ready to respond. Crucially the world has moved on since we last prepared our framework – the tools we used to fight the last recession won’t necessarily work for the next one.
How severe are the constraints of near zero interest rates on monetary policy? What is the potential for Quantitative Easing to replay its major financial crisis role? And while there is a generally accepted case for a wider role for fiscal policy, are we ready to deploy it as effectively as possible?
The Resolution Foundation is setting up a new Macroeconomic Policy Unit to get to the bottom of these big economic questions and more. To mark its launch, the Foundation hosted an event that brought together leading macroeconomists and policy makers. The launch included the publishing of a comprehensive assessment of the UK’s current macroeconomic policy framework. Speakers included MPC Member Gertjan Vlieghe and Head of Bloomberg Economics Stephanie Flanders.
Speakers:
Gertjan Vlieghe, Member of the Monetary Policy Committee
Stephanie Flanders, Head of Bloomberg Economics
Kate Barker, Former MPC member
Rupert Harrison, Portfolio Manager at Blackrock
James Smith, Research Director at the Resolution Foundation
Torsten Bell, Chief Executive of the Resolution Foundation (Chair)
This document provides an overview and stock performance data for a leading real estate investment trust (REIT) company. Key points include:
- The company is the largest net lease REIT by market capitalization and value and has a proven track record of strong total returns.
- It focuses on acquiring freestanding, single-tenant commercial real estate properties leased to retailers and service companies.
- The company maintains a conservative capital structure and has consistently increased its monthly dividend for 76 consecutive quarters.
- Additional sections discuss the company's investment thesis, portfolio diversification across tenants, industries and geographies, and its active asset and portfolio management strategies.
The document discusses the history of interest rate tightening cycles in the US and draws conclusions. It summarizes that in historical cycles the Fed Funds rate generally needs to be higher than the inflation rate. It predicts bond yields have not peaked yet and equity market downside could be more severe than currently priced in, with a high probability of a more severe economic slowdown than the last two decades. The consensus view of economists predicting a mild recession is incorrect given the historical record of tightening cycles.
5 predictions for commercial real estate, risk management and lending in 2018. Presented by Dianne Crocker, EDR Insight in her opening comments at the Environmental Bankers Association Conference in Long Beach, CA on January 15, 2018.
The National Multifamily Index ranks major U.S. markets based on projected vacancy rates, rent growth, and employment gains. San Francisco and San Jose rank at the top due to strong job growth, low vacancy, and high rents. Markets in the Pacific Northwest and Northeast also rank highly. Atlanta and Riverside-San Bernardino moved into the top 20 due to improving economies and property performance. Midwest markets rank in the lower third despite favorable demand drivers. Supply growth will challenge some markets like Houston and Tampa.
At an event at its central London Headquarters, chaired by The Times’ Economics Editor Philip Aldrick, Resolution Foundation Chief Economist Matthew Whittaker presented new analysis on the impact of monetary policy during the downturn. Former MPC member Kate Barker and Chief Economics Commentator at the Financial Times Martin Wolf then debated the future role of monetary policy, before taking part in a wider Q&A.
Eye on 2016: EDR Insight’s ScoreKeeper State of the Market Update for 3Q15EDR
Presented by: Dianne Crocker
Principal Analyst, EDR Insight
October 15, 2015
Do you know where the market for property due diligence is heading? How is your business performance this year compared to industry benchmarks? How confident are you in your business forecast for next year?
The fourth quarter of 2015 is almost upon us, and that means, of course, that 2016 is just around the corner. Join us for our final ScoreKeeper webinar of the year when EDR Insight’s principal analyst Dianne Crocker will share her unique perspective on the latest state of the property due diligence market. Her presentation will provide attendees with a deep dive into the underlying economic and commercial real estate trends impacting the environmental due diligence market, and an in-depth look at the latest trends. Attendees of this 30-minute webinar will get answers to the following types of questions:
• Is my business over- or under-performing the overall market?
• What story does ScoreKeeper’s output tell about the regions driving the strongest 3Q growth?
• Is my state among the top 10 fastest-growers this year?
• Are the hottest mid-year metros still hot or cooling? And if so, who are the new entries taking their place?
• What do the latest data on market indicators impacting demand for your services say about the future business climate you’ll have to contend with?
• How aggressive should your business forecast be for 2016? How about 2017?
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Macro and Statistical Analysis of Real Estate Investment
1. Macro and Statistical Analysis
of Real Estate Investment
Horizon Consulting Inc.
Ahmad Abdel-Aziz
Bill Burkey
Stephanie Diaz
Sadi Hossain
1
2. Executive Summary
• Current Economic Indicators and Recent
Trends
• Monetary Policy Initiatives of the FED and
Effects
• Returns, Risk, and Performance of Real Estate
Industry vs. S&P 500
• Volatility Fluctuation
• Final Recommendations for FRESX
2
3. Economic Indicators
• New Housing Starts
• Federal Funds Rate
• Housing Affordability Index
• GDP Growth
• Mortgage Rates
• Money Supply
• Unemployment
3
4. New Housing Starts
• Utilized for business cycle indication and real
estate market research
• Surveys Homebuilders Nationwide with three
metrics
– New Houses Being Built
– Building Permits
– Housing Completions
• Strengths & Weaknesses
4
6. Federal Funds Rate
• Interest rate at which depository institutions
trade federal funds
• Central interest rate in the U.S. financial
market
• Influences prime rate, mortgages, loans, and
savings
• Currently at 0.25%
6
7. GDP Growth & Mortgage Rates
• GDP growth shows economic improvements
• Increase in general expenditures lead to more
investment in housing
• GDP expanded at an annual rate of 4.10% in the third
quarter of 2013 compared to 2.50% in second
quarter
• An improving economy and low interest rates
boosted buyer demand in most markets, including
real estate
7
8. Housing Affordability Index
• Measures monthly mortgage payments
• Index of 100
– Exact income to qualify for mortgage on a median-
priced home
• Index above 100
– Afford median-priced home, assuming a 20
percent down payment
• Currently at 160
8
10. Inflation Adjusted House Price
Market value of today's median-priced house over a 40-year period
10
11. Change Rate Between Home
Price and Rents
Change in nominal home prices vs. the change in nominal rents since 1983
11
12. Money Supply
• Overall effect on money supply depends on the actions of
central bank and money multiplier
• At times of crisis money multiplier goes down due to banks
hoarding cash reserves
• Increase in money supply - positive effect
– Causes interest rates to drop
– Easier for consumers to get loans
• Increase in money supply - negative effects due to inflation
– Causes the value of the dollar to decrease
– Increase cost of building materials
12
13. Unemployment
• High unemployment rate results in millions
unable to afford to buy houses
• Cause builders to stop building new houses
• Construction workers lose job
• Foreclosures
• Odds of consumers committing to a 15-year or
30-year mortgage becomes low
13
15. Anticipated Changes in Monetary
Policy Affecting Real Estate Industry
Accommodative monetary policy
• Real estate tends to do well when interest
rates are low
– Homeowners and Investors take advantage of low
mortgage rates
• Low level of U.S. real interest rates from 2001-
04 fueled the nation’s real estate bubble in
2006-07
15
16. Anticipated Changes in Monetary
Policy Affecting Real Estate Industry
Restrictive Monetary Policy
• Real estate slumps when interest rates are rising
– Costs more to service mortgage debt
– Leads to a decline in demand among homeowners
and investors
• Fast economic growth constitutes restrictive
or tight monetary policy
– Causes central bank to raising short-term interest
rates
16
17. Anticipated Changes in Monetary
Policy Affecting Real Estate Industry
Monetary Policy Affects Other Countries
• Fall in Latin America currencies have weakened against
the USD due to less accommodative US Monetary Policy
– Brazilian Real lost 16% in the last 3 months in August 2013;
4 year low
– Fall has been contributed to US monetary conditions and
speculation
• The Monetary Policy Committee’s (UK) remit was
restated in March 2013
– Brought slightly more emphasis on economic growth but
no fundamental change to Monetary Policy itself
17
18. Anticipated Changes in Monetary
Policy Affecting Real Estate Industry
Time for a change in Monetary Policy
• Job of Fed: to be loose in times of deflationary threat and
tight in the face of inflationary threat
– Fed’s monetary policy has been neutral; neither causing
inflation or deflation.
• Experts say that we have “Easy Money”
– Half the homes are being bought with cash
– Credit is tight
– Cities are out of cash
– Inflation and interest rate is at historic low
– Deflation and recession plague other nations
– 2% growth for years; lowest in post war history
18
19. Anticipated Changes in Monetary
Policy Affecting Real Estate Industry
Time for a change in Monetary Policy
• Job of the Fed to be loose in times of deflationary threat
and tight in the face of inflationary threat
– Fed’s monetary policy has been neutral; neither causing
inflation or deflation.
• Experts say that we have “Easy Money”
– Half the homes are being bought with cash
– Credit is tight
– Cities are out of cash
– Inflation and interest rate is at historic low
– Deflation and recession plague other nations
– 2% growth for years; lowest in post war history
19
20. Performance Comparison
Real Estate and S&P 500
• Measure of Real Estate Index, S&P 500
• Comparison of correlation, annual
returns, adjusted return per unit of risk
• Select Data from 10yr period for analysis
20
22. Performance of Real Estate to S&P
500
• All three funds, (RWR, FRESX, RIEst) are highly
correlative with the movements of the S&P 500
• FRESX, RWR, RIEst have high variability in returns
YOY indicated by high Annual STD. Dispersion of
past returns is wider than S&P, thus indicating
greater historical volatility
• Returns per unit of risk (Sharpe Ratio), RWR and
FRESX have better returns indicated by higher
Sharpe Ratio
22
23. Is the investment beneficial?
• FRESX annual returns beat RWR ETF, RIEst, and
S&P 500
• Return per unit of risk beat S&P as well
• On average per unit of risk and dispersion of
returns the FRESX, RWR, RIEst portfolios beat
the S&P
• Depends on tolerance for volatility
23
24. CAPM & Multifactor Results
• Test Risk over performance with various
market factors
• Explanations for average returns with three
portfolio factors
• What Model is the best fit for indications of
expected returns for Real Estate:
CAPM or Multifactor?
24
25. FRESX CAPM
CAPM 10yrs Sub Period 1 Sub Period 2
Beta 1.104 0.47 1.39
R2 0.48 0.19 0.62
Alpha 1.33
15.96
25
26. FRESX Multifactor Model
FF 10yrs Sub Period 1 Sub Period 2
Beta 0.93 0.45 1.1
SMB
HML 1.011 0.48 1.01
R2 0.61 0.3 0.7
Alpha 0.84
26
27. RWR CAPM
CAPM 10yrs Sub Period 1 Sub Period 2
Beta 1.09 0.47 1.45
R2 0.49 0.18 0.67
Alpha 1.138
13.656
27
28. RWR Multifactor
FF 10yrs Sub Period 1 Sub Period 2
Rm-RF 0.92 0.48 1.149
SMB
HML 0.97 0.58 0.95
R2 0.61 0.31 0.75
28
29. Which Model?
• The significance of Alpha showed in sub
periods one under both CAPM and FF was non
systemic for both portfolios
• R2 increases in Multifactor Models
• CAPM model indicates more reliable betas
with higher R2
• These portfolios are highly sensitive to market
movements, reliable measures of volatility
29
30. Causes of Volatility
• Economic indicators
• Corporate performance
• Government
• Government economic reports
• Interest rates
30
33. Diversification
• Bonds will offset S&P and RWR
• Real estate is known to serve as a portfolio
diversifier and inflation hedge
• New real estate products and global
opportunities
33
34. Final Recommendations
• The Real Estate Bubble and Financial Crisis
created wide spread volatility and risk aversion
• Key economic indicators, inflation, GDP growth,
low interest rates indicate steady returns
• Long term low volatility translates into steady
annualized returns
• Offers good portfolio balance as long as key
indicators (interest rates, home prices) don’t
fluctuate
34
Editor's Notes
International Interest Rates
StrengthsGood scale for future real estate supply levelsCovers approximately 95% of all residential constructionHas a Positive affect on construction materials being soldWeaknessesNo differentiation between size and quality of homes being initiatedOnly focuses on one area of the economy, real estate BANKING, MANUFACTURING, FINANCIAL SERVICES
Interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnightDetermined by the market but is influenced by the Federal Reserve through open market operations to reach the federal funds rate target. Ex. FOMCThe federal funds rate is the central interest rate in the U.S. financial market. It influences other interest rates such as the prime rate, which is the rate banks charge their customers with higher credit ratings. Additionally, the federal funds rate indirectly influences longer- term interest rates such as mortgages, loans, and savings, all of which are very important to consumer wealth and confidence. (2) Influences rates
EXPANDED AT AN ANNUAL RATE OF 4.1% in third quarter of 2013Increase in general expenditures by consumers and investments by business lead to more investment in housing sector and purchasing of homesReal estate plays a significant role in shaping the economy and the GDP. Additionally, commercial real estate, (which includes multi-family homes, apartment units, offices, retail businesses and manufacturing sites) is part of the equation. Real estate plays a part in the GDP in two ways: through money spent on residential investment and on housing services.GDP, CPI and other key economic reportsHousing is an important source of economic growth. As of the third quarter of 2013, housing’s share of gross domestic product (GDP) was 15.6%, with home building yielding 3.2 percentage points of that totalGDP rose at a 2.8% annual rate in the third quarter, according to the Bureau of Economic Analysis. That marked the fastest growth in a year and was stronger than economists had anticipatedhttp://afrmortgage.com/blog/what-role-does-housing-play-in-the-gdp/#nullhttp://afrmortgage.com/blog/what-role-does-housing-play-in-the-gdp/#nullhttp://www.bankrate.com/rates/economic-indicators/reports.aspxhttp://eyeonhousing.org/2013/11/13/housings-contribution-to-gdp-3q13/Mortgage RatesMortgage Rates since 1971Home prices rose again nationally in September Lender Processing Services (LPS) said today, but in many areas, notably a lot of the older mill towns in the Northeast, prices are still declining, in some cases sharply. LPS's Home Price Index (HPI) was up 0.2 percent from August to $232,000 and has risen 8.2 percent since the beginning of the year and 9.0 percent since September 2012. AnetaMarkowska, Chief US Economist at SocieteGenerale, is optimistic about housing demand despite the recent run-up in mortgage rates. The key to Markowska's view is the concept of "real" interest rates, versus "nominal" interest rates. What's the difference between the two? Inflation. The "real" interest rate is approximately the stated ("nominal") interest rate minus the inflation rate.http://www.freddiemac.com/pmms/pmms30.htmhttp://www.mortgagenewsdaily.com/11252013_lps_hpi.asphttp://finance.yahoo.com/blogs/talking-numbers/why-higher-mortgage-rates-won-t-hurt-housing-113915622.html
Measures the degree to which a typical family can afford the monthly mortgage payments on a typical home. Value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.
15 year fixed 3.63%30 year fixed 4.39%Real estate plays a significant role in shaping the economy and the GDP. Additionally, commercial real estate, (which includes multi-family homes, apartment units, offices, retail businesses and manufacturing sites) is part of the equation. Real estate plays a part in the GDP in two ways: through money spent on residential investment and on housing services.GDP, CPI and other key economic reportsHousing is an important source of economic growth. As of the third quarter of 2013, housing’s share of gross domestic product (GDP) was 15.6%, with home building yielding 3.2 percentage points of that totalGDP rose at a 2.8% annual rate in the third quarter, according to the Bureau of Economic Analysis. That marked the fastest growth in a year and was stronger than economists had anticipatedhttp://afrmortgage.com/blog/what-role-does-housing-play-in-the-gdp/#nullhttp://afrmortgage.com/blog/what-role-does-housing-play-in-the-gdp/#nullhttp://www.bankrate.com/rates/economic-indicators/reports.aspxhttp://eyeonhousing.org/2013/11/13/housings-contribution-to-gdp-3q13/Mortgage RatesMortgage Rates since 1971Home prices rose again nationally in September Lender Processing Services (LPS) said today, but in many areas, notably a lot of the older mill towns in the Northeast, prices are still declining, in some cases sharply. LPS's Home Price Index (HPI) was up 0.2 percent from August to $232,000 and has risen 8.2 percent since the beginning of the year and 9.0 percent since September 2012. AnetaMarkowska, Chief US Economist at SocieteGenerale, is optimistic about housing demand despite the recent run-up in mortgage rates. The key to Markowska's view is the concept of "real" interest rates, versus "nominal" interest rates. What's the difference between the two? Inflation. The "real" interest rate is approximately the stated ("nominal") interest rate minus the inflation rate.http://www.freddiemac.com/pmms/pmms30.htmhttp://www.mortgagenewsdaily.com/11252013_lps_hpi.asphttp://finance.yahoo.com/blogs/talking-numbers/why-higher-mortgage-rates-won-t-hurt-housing-113915622.html
HUGE DIFFERENCE BETWEEN NOMINAL AND INFLATION ADJUSTED HOUSING PRICESReal estate activity peaked in the summer of 2005, but home prices kept rising for another year. In spring of 2006, the real estate prices were still rising even though housing inventories were also rising. Many people denied the existence of a housing bubble at that time. However, around 2009 and 2010 the housing bubble in the U.S. has completely deflated. The charts below aim to inform people about the current state of the real estate market with inflation-adjusted charts and spreadsheets showing today's real estate prices compared to their historical norm. http://www.jparsons.net/housingbubble/
The national money supply is the amount of money available for consumers to spend in the economy. In the United States, the circulation of money is managed by the Federal Reserve Bank. An increase in money supply causes interest rates to drop and makes more money available for customers to borrow from banks.The Federal Reserve increases the money supply by buying government-backed securities, which effectively puts more money into banking institutions. An increase in paper money reduces the value of the U.S. dollar, but increases the money banks can lend to consumers. When banks have more money to loan, they reduce the interest rates consumers pay for loans, which typically increases consumer spending because money is easier to borrow. The government will request an increase in the money supply when the economy begins to slow to spur additional spending by consumers and build confidence in the economy. An increase in money supply can also have negative effects on the economy. It causes the value of the dollar to decrease, making foreign goods more expensive and domestic goods cheaper. With the complex global economy, this can ripple out and affect other nations. Steel, automobiles, and building materials can all cost more. As a result, the prices for home building and real estate increase because of increased material and building expenses. It does make it easier for customers to get loans, however, because banks are more willing to loan money.http://www.wisegeek.com/what-are-the-effects-of-an-increase-in-money-supply.htm
How Does Unemployment Affect the Real Estate Market? It has a huge impact as part of the effect is cyclical. When the unemployment rate is high, millions of people can't afford to buy houses. Since people aren't buying, builders aren't out building new houses. As a result, more and more construction workers are out of a job -- which adds to the unemployment rate. Cycles aside, high unemployment has another major effect -- it drags down the demand. Like you learned in high school economics, the higher the demand is for something, the more you can sell it for. When homeowners see this type of decrease in demand, they become hesitant to put their own houses on the market. There's another thing to worry about when unemployment is high -- foreclosures. The longer people are out of work, the higher the odds are that they won't be able to afford their mortgage payments. There's also a psychological effect to think about. The longer unemployment stays high, the less confident people feel. Even if they have jobs today, they're worried about getting pink slips tomorrow. As a result, the odds of them committing to a 15-year or 30-year mortgage are low. They're not going to take that kind of risk. What's the bottom line? Even if your own employment status is stable, the unemployment problem around you can lead to issues if you're thinking about buying or selling a home.http://www.prnewswire.com/news-releases/how-does-unemployment-affect-the-real-estate-market-185576402.htmlhttp://www.prnewswire.com/news-releases/how-does-unemployment-affect-the-real-estate-market-185576402.html
How Does Unemployment Affect the Real Estate Market? It has a huge impact as part of the effect is cyclical. When the unemployment rate is high, millions of people can't afford to buy houses. Since people aren't buying, builders aren't out building new houses. As a result, more and more construction workers are out of a job -- which adds to the unemployment rate. Cycles aside, high unemployment has another major effect -- it drags down the demand. Like you learned in high school economics, the higher the demand is for something, the more you can sell it for. When homeowners see this type of decrease in demand, they become hesitant to put their own houses on the market. There's another thing to worry about when unemployment is high -- foreclosures. The longer people are out of work, the higher the odds are that they won't be able to afford their mortgage payments. There's also a psychological effect to think about. The longer unemployment stays high, the less confident people feel. Even if they have jobs today, they're worried about getting pink slips tomorrow. As a result, the odds of them committing to a 15-year or 30-year mortgage are low. They're not going to take that kind of risk. What's the bottom line? Even if your own employment status is stable, the unemployment problem around you can lead to issues if you're thinking about buying or selling a home.http://www.prnewswire.com/news-releases/how-does-unemployment-affect-the-real-estate-market-185576402.htmlhttp://www.prnewswire.com/news-releases/how-does-unemployment-affect-the-real-estate-market-185576402.html
Include any anticipated changes in monetary policy and their potential effects on real estate industry. In particular consider any anticipated changes in domestic and international interest rates. Monetary policy refers to the strategies employed by a nation’s central bank with regard to the amount of money circulating in the economy, and what that money is worth. While the ultimate objective of monetary policy is to achieve long-term economic growth, central banks may have different stated goals toward this end. In the U.S., the Federal Reserve’s monetary policy goals are to promote maximum employment, stable prices and moderate long-term interest rates. Impact on InvestmentsMonetary policy can be restrictive (tight), accommodative (loose) or neutral (somewhere in between). When the economy is growing too fast and inflation is moving significantly higher, the central bank may take steps to cool the economy by raising short-term interest rates, which constitutes restrictive or tight monetary policy. Conversely, when the economy is sluggish, the central bank will adopt an accommodative policy by lowering short-term interest rates to stimulate growth and get the economy back on track.The impact of monetary policy on investments is thus direct as well as indirect. The direct impact is through the level and direction of interest rates, while the indirect effect is through expectations about where inflation is headed. Accommodative monetary policy Real estate tends to do well when interest rates are low, since homeowners and investors will take advantage of low mortgage rates to snap up properties. It is widely acknowledged that the low level of U.S. real interest rates from 2001-04 was instrumental in fuelling the nation’s real estate bubble that peaked in 2006-07. Restrictive monetary policy As is to be expected, real estate slumps when interest rates are rising since it costs more to service mortgage debt, leading to a decline in demand among homeowners and investors. The classic example of the sometimes disastrous impact of rising rates on housing is, of course, the bursting of the U.S. housing bubble from 2006 onward. This was largely precipitated by a steep rise in variable mortgage interest rates, tracking the federal funds rate, which rose from 2.25% at the beginning of 2005 to 5.25% by the end of 2006. The Federal Reserve ratcheted up the federal funds rate no less than 12 times over this two-year period, in increments of 25 basis points.http://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asp
Include any anticipated changes in monetary policy and their potential effects on real estate industry. In particular consider any anticipated changes in domestic and international interest rates. Monetary policy refers to the strategies employed by a nation’s central bank with regard to the amount of money circulating in the economy, and what that money is worth. While the ultimate objective of monetary policy is to achieve long-term economic growth, central banks may have different stated goals toward this end. In the U.S., the Federal Reserve’s monetary policy goals are to promote maximum employment, stable prices and moderate long-term interest rates. Impact on InvestmentsMonetary policy can be restrictive (tight), accommodative (loose) or neutral (somewhere in between). When the economy is growing too fast and inflation is moving significantly higher, the central bank may take steps to cool the economy by raising short-term interest rates, which constitutes restrictive or tight monetary policy. Conversely, when the economy is sluggish, the central bank will adopt an accommodative policy by lowering short-term interest rates to stimulate growth and get the economy back on track.The impact of monetary policy on investments is thus direct as well as indirect. The direct impact is through the level and direction of interest rates, while the indirect effect is through expectations about where inflation is headed. Accommodative monetary policy Real estate tends to do well when interest rates are low, since homeowners and investors will take advantage of low mortgage rates to snap up properties. It is widely acknowledged that the low level of U.S. real interest rates from 2001-04 was instrumental in fuelling the nation’s real estate bubble that peaked in 2006-07. Restrictive monetary policy As is to be expected, real estate slumps when interest rates are rising since it costs more to service mortgage debt, leading to a decline in demand among homeowners and investors. The classic example of the sometimes disastrous impact of rising rates on housing is, of course, the bursting of the U.S. housing bubble from 2006 onward. This was largely precipitated by a steep rise in variable mortgage interest rates, tracking the federal funds rate, which rose from 2.25% at the beginning of 2005 to 5.25% by the end of 2006. The Federal Reserve ratcheted up the federal funds rate no less than 12 times over this two-year period, in increments of 25 basis points.http://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asp
Include any anticipated changes in monetary policy and their potential effects on real estate industry. In particular consider any anticipated changes in domestic and international interest rates. Monetary policy refers to the strategies employed by a nation’s central bank with regard to the amount of money circulating in the economy, and what that money is worth. While the ultimate objective of monetary policy is to achieve long-term economic growth, central banks may have different stated goals toward this end. In the U.S., the Federal Reserve’s monetary policy goals are to promote maximum employment, stable prices and moderate long-term interest rates. Impact on InvestmentsMonetary policy can be restrictive (tight), accommodative (loose) or neutral (somewhere in between). When the economy is growing too fast and inflation is moving significantly higher, the central bank may take steps to cool the economy by raising short-term interest rates, which constitutes restrictive or tight monetary policy. Conversely, when the economy is sluggish, the central bank will adopt an accommodative policy by lowering short-term interest rates to stimulate growth and get the economy back on track.The impact of monetary policy on investments is thus direct as well as indirect. The direct impact is through the level and direction of interest rates, while the indirect effect is through expectations about where inflation is headed. Accommodative monetary policy Real estate tends to do well when interest rates are low, since homeowners and investors will take advantage of low mortgage rates to snap up properties. It is widely acknowledged that the low level of U.S. real interest rates from 2001-04 was instrumental in fuelling the nation’s real estate bubble that peaked in 2006-07. Restrictive monetary policy As is to be expected, real estate slumps when interest rates are rising since it costs more to service mortgage debt, leading to a decline in demand among homeowners and investors. The classic example of the sometimes disastrous impact of rising rates on housing is, of course, the bursting of the U.S. housing bubble from 2006 onward. This was largely precipitated by a steep rise in variable mortgage interest rates, tracking the federal funds rate, which rose from 2.25% at the beginning of 2005 to 5.25% by the end of 2006. The Federal Reserve ratcheted up the federal funds rate no less than 12 times over this two-year period, in increments of 25 basis points.http://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asp
Include any anticipated changes in monetary policy and their potential effects on real estate industry. In particular consider any anticipated changes in domestic and international interest rates. Monetary policy refers to the strategies employed by a nation’s central bank with regard to the amount of money circulating in the economy, and what that money is worth. While the ultimate objective of monetary policy is to achieve long-term economic growth, central banks may have different stated goals toward this end. In the U.S., the Federal Reserve’s monetary policy goals are to promote maximum employment, stable prices and moderate long-term interest rates. Impact on InvestmentsMonetary policy can be restrictive (tight), accommodative (loose) or neutral (somewhere in between). When the economy is growing too fast and inflation is moving significantly higher, the central bank may take steps to cool the economy by raising short-term interest rates, which constitutes restrictive or tight monetary policy. Conversely, when the economy is sluggish, the central bank will adopt an accommodative policy by lowering short-term interest rates to stimulate growth and get the economy back on track.The impact of monetary policy on investments is thus direct as well as indirect. The direct impact is through the level and direction of interest rates, while the indirect effect is through expectations about where inflation is headed. Accommodative monetary policy Real estate tends to do well when interest rates are low, since homeowners and investors will take advantage of low mortgage rates to snap up properties. It is widely acknowledged that the low level of U.S. real interest rates from 2001-04 was instrumental in fuelling the nation’s real estate bubble that peaked in 2006-07. Restrictive monetary policy As is to be expected, real estate slumps when interest rates are rising since it costs more to service mortgage debt, leading to a decline in demand among homeowners and investors. The classic example of the sometimes disastrous impact of rising rates on housing is, of course, the bursting of the U.S. housing bubble from 2006 onward. This was largely precipitated by a steep rise in variable mortgage interest rates, tracking the federal funds rate, which rose from 2.25% at the beginning of 2005 to 5.25% by the end of 2006. The Federal Reserve ratcheted up the federal funds rate no less than 12 times over this two-year period, in increments of 25 basis points.http://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asphttp://www.investopedia.com/articles/investing/052813/how-monetary-policy-affects-your-investments.asp
*Eco Indi: Housing starts, GDP, Interest rates, Jobs report, valuation of dollar/currency exchangeVital influence on stock market and can be one of the major factors of market shiftMonetary policy can tighten, loosen or change interest rates to slow growth or increase growth in economy.by tightening policy and raising interest rates we can reduce the amount of money in our financial system (restricting growth). Whereas, by loosening policy and reducing rates, we may be able to spark growth in our markets and increase borrowing.Many investors anxiously await reports from government labor departments that outline job growth and unemployment. The results of these reports often generate either rises or falls in market indexes. If the reports are good, markets tend to rise, and bad reports will often cause a drop.If interest rates rise, as they are now, and surely will when the Federal Reserve slows its bond buying, the hot market often turns cold. Indeed, the slowing in real estate may well have been driven by a taper-driven run up in mortgage rates earlier this year.30 year fixed mtg is average of 4.2-4.4%
V because interest rate manipulation……………….may have an affect on real-estate ind.
When we look at the chart on a yearly bases, you see that the RWR and FRESX are pretyt much on the same move. The SP ,oveis alone with the real estate but at a much smaller scale
Bonds would offset the S&P and RWRThe continual introduction of new real estate products and global opportunities provides for additional diversification possibilities and risk mitigation potential, by providing investors with greater flexibility to customize the real estate portion of their asset allocation.