Industry News

Industry and financial news that Devall professional see fit to point out.

Unexpected rise in new US home sales
By James Politi in Washington
Published: October 27 2008 16:25 | Last updated: October 27 2008 16:25
The pace of new home sales in the US rose by 2.7 per cent last month – a much better figure than forecast by economists - as low prices fostered a flurry of activity in the stricken US housing market amid an intensifying financial crisis.
New home sales rose to an annualized rate of 464,000 units after dropping by a steep 12.3 per cent in August, the US commerce department said on Monday. The inventory of unsold homes also dropped, from 11.4 months’ supply in August to 10.4 months’ supply last month. The median sale price for a new home fell to $218,400, its lowest level in four years.
The data roughly trace encouraging figures on sales of previously owned homes, released last Friday, indicating that a bottoming in home sales might be taking hold and that could pave the way for an eventual rebound in the US housing market – the root of the global financial turmoil.
But economists have cautioned that the stabilization of home sales reflected buying conditions in July and August, and could be threatened by the deeper economic woes in late September and October.
“There is a sense that home sales may have started September stronger but ended weaker and continued much softer in the current month,” said Alan Ruskin of RBS Global Banking & Markets in Greenwich, Connecticut.
A key monthly measure of US home prices – the Case-Shiller index – will be released on Tuesday, providing further direction about the fate of the US housing market.
On Friday, the National Association of Realtors said the pace of previously owned home sales rose to a rate of 5.18m annualized units last month – the highest level since the middle of last year. That was sharply higher than the 4.9m annualized unit rate expected by economists.
In addition, for the first time in three years the pace of existing home sales rose on an annual basis – by 1.4 per cent compared with September 2007. The median price for previously owned homes was $191,600 last month - the lowest level since April 2004 and a 9 per cent fall compared with September 2007.
SOURCE: http://www.ft.com/cms/s/0/eebff832-a43e-11dd-8104-000077b07658.html
Copyright The Financial Times Limited 2008

Yes! You Can Use Your Retirement Funds to Buy Real Estate
by J. J. Childers
Many people are surprised to learn that a retirement plan such as an IRA or 401(k) has the flexibility to own real estate. If you're one of those people, don't feel bad. You're certainly not alone! Currently, more than 90 percent of all retirement plans hold nothing but “traditional” assets such as stocks, bonds and mutual funds. That makes sense when you consider that the people who set up retirement plans are usually the same people who sell stocks, bonds and mutual funds. But be assured, you can own real estate in your retirement account. However, there’s one critical thing you must know: You can't personally use your retirement plan-owned real estate - and neither can your family members. So the first question to answer is, do you intend to use the property personally before it is distributed to you from your retirement plan and taxes are paid? Will the property be for "personal use," or purely for investment? Your answer to those questions might alert you to the fact that the real estate you are considering is not suitable for ownership by your retirement plan. “Personal use” includes living in the property, even if only occasionally. It also means that you cannot allow “disqualified persons,” including family members, to use or live in the property. So if you desire to purchase a vacation property or for use by a relative, your retirement plan is not the way to go. For example, let’s say you find a two-bedroom condominium in Deer Valley at a distressed price and acquire it for $500,000. Ultimately, you rent out the condominium about 40 weeks a year. Even though the condominium stands empty for the remaining 12 weeks every year, you or family members are unable to use it, because doing so constitutes a prohibited transaction. So, if you want to provide a place for your brother-in-law to live, while at the same time building wealth for your retirement, you will not be able to do so and enjoy the tax benefits of a retirement plan. But if you are looking for a way to acquire pure investment properties today - and to put your retirement funds to good use at the same time - consider buying properties in this way. Bear in mind, you will be entitled to all the benefits enjoyed by the other investments that are held by your retirement accounts. The income you get from renting your properties will not be taxed, nor will the money you make when you sell the properties. Those factors alone make the option of IRA-owned real estate worth considering. To learn more cutting-edge strategies for protecting your assets while your wealth grows, read my new book Trump University Asset Protection 101.
SOURCE TrumpUniversity.com C J. J. Childers is an attorney dealing primarily with the topics of asset protection, estate planning, and tax reduction. He travels the country extensively working with individuals and companies to help them with their small business wealth structuring. He is author of the new book Trump University Asset Protection 101

Recession is a myth
Reported By FOXNEWS on Research From Maryland University During the 2000 presidential election.
With Bill Clinton as president, the economy was viewed through rose-colored glasses. According to polls, voters didn't realize that the country was in a recession. Although the economy started shrinking in July 2000, most Americans through the entire year thought that the economy was fine. But over the last half-year, the media and politicians have said we were in a recession even while the economy was still growing. Gas prices are going up. The economy is slowing. Talk of recession is seemingly everywhere. While the majority of people rate their personal finances positively, consumer confidence in the economy has plunged to a 16-year low, well below what it was during the last year of the Clinton administration when we were in a recession.
A Nexis search on news stories during the three-month period from July 2000 through September 2000 using the keywords “economy recession US” produces 1,388. By contrast, the same search over just the last month finds 3,166. Or, even more telling, take the three months from July through September last year, when the GDP was growing at a phenomenal 4.9 percent. The same type of Google search shows 2,475 news stories. Over 78 percent more negative news stories discussed a recession when the economy under a Republican was soaring than occurred under a Democrat when the economy was shrinking. A little perspective on the economy would be helpful. The average unemployment rate during President Clinton was 5.2 percent. The average under President George W. Bush is just slightly below 5.2. The current unemployment rate is 4.8 percent.