March 3, 2014

Existing home sales fell 5.1 percent from December to January, the slowest pace in more than a year.


· posted by MARILYN KALFUS Orange County Register

The region’s housing market saw the third-biggest home price increase among 20 leading U.S. metro areas in the S&P Case-Shiller Home Price Index. 

Home prices in the Los Angeles-Orange County area jumped 20.3 percent in December compared with a year earlier, the 18th consecutive month of annual gains, housing figures released Tuesday show.

The Los Angeles-Orange County housing markets saw the third-biggest home price increase among the 20 leading U.S. metro areas in the latest S&P Case-Shiller Home Price Index.

But the region’s home prices were flat from November to December, the first time there was no month-over-month increase since February 2012.

Nationally, the index ended its best year since 2005 – closing the year up 11.3 percent. But the future is shaping up differently.

“The strongest part of the recovery in home values may be over,” said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices.

Recent economic reports suggest a “bleaker picture,” the report stated. Existing home sales fell 5.1 percent from December to January, the slowest pace in more than a year. Permits for new residential construction also were down. The report alluded to cold weather in much of the nation, but noted that higher prices and mortgage rates are having an impact on affordability.

“Mortgage default rates … are back to their pre-crisis levels but bank lending standards remain strict,” the report said.

Las Vegas, San Francisco and Los Angeles-Orange County were the top three performing metro areas of 2013 with gains of over 20 percent, according to the index. But all three places showed lower annual rates in December than November.

The Los Angeles-Orange County market has seen six months of consecutive year-over-year gains of more than 20 percent, capped by post-recession high of 22.1 percent in October.

The index, created by economists Karl E. Case and Robert J. Shiller, is considered one of the most reliable analyses of home values.

The index compares the latest sales of detached houses with previous sales, and accounts for factors such as remodeling.

But the index lags behind more recent data showing a weakening market.

Zillow chief economist Stan Humphries said the spring homebuying season is expected to be less frenzied than last year, when the housing supply was extremely tight and investors often outbid regular buyers.

“Looking further ahead,” Humphries said, “the market should continue its slow march back to normal, as annual appreciation rates fall to more sustainable levels around 3 percent, mortgage interest rates climb to levels closer to historic norms and negative equity continues to recede.”

Staff writer Jeff Collins contributed to this report.

March 3, 2014

Say ‘Farewell” to the Ritz in Newport Beach

The Ritz, which first put down roots near the Newport Pier in 1977 and then moved years later to the more upscale Newport Center, will shut its doors Feb. 15, the victim of changing tastes and a landlord who wants to move in “a different direction.”

The Irvine Co. opted not to renew the restaurant’s lease, choosing instead to convert the space into something other than a restaurant. The Ritz’s owners are hoping to find a new location, but nothing has been finalized.

With trendy restaurants such as Javier’s, Fig & Olive and Red O on the scene, perhaps time simply took its toll on the Ritz, a fixture among Orange County’s elite, who would gather for dinners served by a friendly staff adhering to strict formal dining standards.

“It was the movers and shakers that were there,” said Jim Allen, who frequented the Ritz for lunch. “It was, at the time, the place to be seen.”

Allen likened the restaurant in its heyday to a sort of country club and a home base for many businessmen. The most loyal joined the Ritz Brothers, who gathered five times a year and donated to charities. The Ritz Sisters, a similar group, formed later.

Allen recalled taking clients out for martinis at lunch and seeing well-dressed women come in at the fashionable hour of 1:30 or 2 p.m.

“There was a time when no other restaurant could even come close,” said Laurie Virtue, the restaurant’s controller. “We were it.”

But with competition and an evolving clientele, the restaurant has changed.

February 8, 2014

Forget the Unemployment Rate, Let’s Talk About the Employment Rate

Forget the Unemployment Rate, Let’s Talk About the Employment Rate

By Jonathan House
The unemployment rate gets all the press, but the employment rate has been improving lately too.
The number of Americans working as a proportion of the overall populace — called the employment-population ratio — rose to 58.8% in January. That level was last consistently seen in 2009.

Still, the measure remains well below its prerecession levels in the 60s. It bottomed out at 58.2% in late 2010, a fact many economists highlight as evidence of a lack of progress in the jobs recovery despite a falling unemployment rate.

The nation’s unemployment rate fell to 6.6% in January, a much more sizable improvement from its 10% peak in late 2009. But some of the same factors that many economists believe are overstating the improvement of the unemployment rate are also understating the improvement in the employment-population ratio.

The unemployment rate is falling so quickly in part because of many people dropping out of the labor force. The portion of Americans who are working or looking for work has been on a downward trajectory for many years, a process that gained momentum during the recession and which puts downward pressure on ratios of both employment and unemployment.

Gary Burtless, an economist at the Brookings Institution, calculates that over half of this decline is the result of an aging population. That means it won’t be reversed as the economy recovers and lures discouraged job-seekers back into the workforce.

Mr. Burtless said January’s jobs data is new evidence the economy is slowly returning to full employment, albeit at a lower level. “We are slowly closing the gap,” he said

August 5, 2013

Wave of the Future: Manage Your Smart Home with a Single Gesture

In-air gesture recognition has already been popularized by Microsoft’s Xbox Kinect game console. But Kinect is a vision-based system that relies on a camera to pick up the gestures players make; someone out of the camera’s line of sight is unable to interact. Because wi-fi signals can travel through walls, WiSee would let users control devices in different rooms from anywhere inside the household. In a sense, it repurposes wi-fi signals that already exist to perform gesture recognition—no need to buy motion-sensing cameras.

When a person moves in an environment saturated with wi-fi signals from routers, laptops and mobile phones, that movement creates a slight change in the frequency of those signals, says lead researcher Shyam Gollakota, a U.W. assistant professor of computer science and engineering. Leveraging this Doppler shift—the change in the frequency observed by the transmitter and the receiver as disturbed waves move relative to those locations—the researchers designed the WiSee receiver to understand signal disturbances created by different motions of a person’s arm, leg or entire body. Ideally, a person sitting in his or her living room on a hot summer day could crank up the air-conditioning using, well, a cranking motion in the air. Likewise, a person engaged in a conversation in one room could lower the TV volume coming from another room simply by patting the air in a downward direction.

To test the system in a real-world environment, the researchers tracked five volunteers operating first in an office setting and then in a two-bedroom apartment. The people were instructed to make nine specific gestures with their bodies, including pushing, pulling and kicking motions. Out of the 900 total gestures performed during the test, WiSee responded correctly 94 percent of the time. A four-antenna version of the WiSee receiver tested inside the apartment could identify gestures from a primary user even when other people were nearby and performing random gestures. Accuracy declined, however, as the number of distractions increased.

Each primary user during the test identified himself or herself using a particular “preamble” gesture that WiSee was programmed to identify, Gollakota says. “One can also imagine a system where each user can set [his or her] own preamble to achieve some form of [secure] access control,” he adds. Such identification and control measures would prevent your neighbor from using wi-fi signals to turn down your stereo from his own apartment. They would also prevent you from, say, shutting off the lights every time you attempt to swat a fly.

August 5, 2013

4 Obstacles to Clearing an International Transaction and How to Overcome Them

Challenge #1: Currency Issues
On my last trip to London, my friend Kelly and I were out shopping. I did my usual damage – a couple tops, a skirt, and a jacket in hand to purchase. Of course I had no idea what the prices were in American dollars, but the price tags attached to the garments looked okay to me by American standards. Kelly, who has lived in the U.K. for about 4 years now, encouraged my indifference to the exchange rate with her mantra, “Pretend it’s American dollars, that’s what I do.” I’ve traveled overseas enough to know that it was NOT American dollars, but this seemed easier, so I proceeded to checkout. I returned home, checked my bank statement, and WHOA. Imagine my surprise when my purchase, which I thought was going to be in the US$400 range, was closer to US$700. Thankfully this wasn’t a critical error in judgment, but I would have liked to know I was spending $700 on one outfit.
Now, imagine magnifying that “surprise” on a much larger-scale item — like a house. Purchasing a big-ticket item like real property greatly magnifies the impact of currency markets. Buyers from abroad can spend significantly less – or more – due to nothing more than the ebb and flow of exchange rate movements largely outside their control.
Regardless of what country your buyer calls home, take a look at the recent movements in their currency’s value relative to the United States. Then crunch the numbers. It quickly becomes apparent that a property priced at $500,000 can shift by tens of thousands of dollars in the time it takes to close, due solely to currency fluctuations.
A foreign buyer needs funds in U.S. dollars in order to close on a property. So continuing to hold funds in their local currency can put the transaction at risk if exchange rates fluctuate unfavorably. To lock in the dollar value of their funds, encourage your buyers to convert them as soon as possible. Also advise them to wire transfer the funds to a U.S. bank so you don’t run into delays.
What to ask:
• How much and in what currency are the available funds? Where are the funds located?
• If the money is not in a U.S. bank, how soon can it be transferred?
What to do:
• Monitor exchange rate trends and make your buyer aware of their impact on funds.
• Work out scenarios that show your buyer what funds will be needed at closing using today’s exchange rate, a higher rate, and a lower rate. Make them aware that if funds are not available at closing, they can lose their down payment.
• Encourage your client to convert and transfer their funds as soon as possible so that you can move quickly on good opportunities.
• For rental properties, know how to convert rates per square foot into your client’s local currency and measurements, for instance, yen per square meter.

Challenge #2: Financing Issues
Financing can be an especially difficult hurdle for foreign buyers to clear. Unfortunately, even if your foreign client is quite creditworthy, obtaining a U.S. mortgage may be a lengthy and complicated process because credit histories and other information for foreign buyers may not conform to U.S. underwriting requirements. This is likely why approximately half of foreign buyers purchase property with cash.
U.S. lenders may want to make sure that your buyer has a visa and residential status that is appropriate for buying property here.
Additionally, some buyers may prefer an alternative to a traditional mortgage because their culture’s beliefs forbid interest-bearing loans. Luckily, there are now U.S. financial institutions that offer financing options, known as Sharia financing, through which the lender sells property to the buyer on a cost-plus basis.
What to ask:
• Do you plan to finance the purchase?
• Do you have a visa that will satisfy a lender’s residency requirements?
• Will you be able to provide the financial documents needed to obtain financing?
• Have you begun looking for a lender?
What to do:
• Address the question of financing prior to looking for properties.
• Make your buyer aware of the financial information needed to obtain a U.S. mortgage, and encourage him/her to begin the process of assembling it, especially if the source is a foreign bank.
• Become acquainted with banks offering Sharia financing, so you can refer buyers to them when needed.

Challenge #3: Visa Issues
While the U.S. places few restrictions on foreign ownership of real estate, foreign buyers do face restrictions on their use of and access to property. Foreign visitors from countries participating in the Visa Waiver Program (VWP), including most European and many Asian nations, can stay in the U.S. for 90 days, during which time they can purchase residential and business property. However, to conduct business here, they must apply for a visa. There are many different types of visas, each presenting different restrictions. To learn more about the most common ones, visit
One pathway to staying in the U.S. indefinitely and perhaps later becoming a citizen is to buy commercial property and establish a small business, such as a tanning salon or fast food franchise. The E-2 Treaty Investor Visa, for example, allows a foreign national to do this. If you encounter an immigrant looking to start a business here, ask if they have applied for the required visa. Suggest that they contact an immigration lawyer who can guide them through the process.
What to ask:
• How do you plan to use the property you wish to purchase?
• Have you consulted an immigration attorney?
What to do:
• Know your buyer’s visa status before showing properties.
• Encourage him to seek expert advice in immigration law.

Challenge #4: Tax Issues
The tax status of a foreign buyer can significantly affect the realized gain on a residential property and the net income on a rental or commercial property. Anyone, whether native-born or foreign, should examine tax considerations before initiating a real estate transaction.
An immigrant’s tax situation is largely determined by his/her status as a resident or nonresident. Residency determination is independent of your foreign buyer’s visa type. The good news is that, in many cases, an immigrant can elect a tax status that is beneficial to his/her specific situation, or even apply for a waiver or exemption if he or she is classified in an unfavorable one.
Form of ownership will also affect tax outcomes. Direct ownership by an individual may be the simplest and most effective solution in many cases. However, owners of large or complex investment properties may find that forming a corporate entity best suits their business objectives.
Foreign buyers should be aware that laws surrounding income, capital gains and estate taxes on foreign nationals are very complex, and guide them to seek expert advice from a tax professional. Also, remember that all U.S. property transactions made by a foreign entity require a TIN (Tax Identification Number) or an EIN (Employer Identification Number).
What to ask:
• Do you have a Tax ID Number (TIN) or an Employer Identification Number (EIN)?
• Have you consulted an expert in immigrant tax law to determine what types of ownership and resident status would be most beneficial to your tax situation?
What to do:
• Make the buyer aware that tax considerations are quite complex, and guide them to seek advice

August 5, 2013

Employment News – August

The 162,000 jobs the economy added in July were a disappointment. The quality of the jobs was even worse. A disproportionate number of the added jobs were part-time or low-paying — or both.
Part-time work accounted for more than 65 percent of the positions employers added in July. Low-paying retailers, restaurants and bars supplied more than half July’s job gain.
“You’re getting jobs added, but they might not be the best-quality job,” says John Canally, an economist with LPL Financial in Boston. So far this year, low-paying industries have provided 61 percent of the nation’s job growth, even though these industries represent just 39 percent of overall U.S. jobs, according to Labor Department numbers analyzed by Moody’s Analytics. Mid-paying industries have contributed just 22 percent of this year’s job gain.
“The jobs that are being created are not generating much income,” Steven Ricchiuto, chief economist at Mizuho Securities USA, wrote in a note to clients. That’s one reason Americans’ pay hasn’t kept up with even historically low inflation since the Great Recession ended in June 2009. Average hourly pay fell 2 cents in July to $23.98 an hour.
Part-time work has made up 77 percent of the job growth so far this year. The government defines part-time work as being less than 35 hours a week.
Jason Furman, the new chairman of the White House’s Council of Economic Advisers, says part-time employment has been inflated by the across-the-board budget cuts that began to bite in March, forcing some federal workers to take time off without pay.
Analysts say some employers are offering part-time over full-time work to sidestep the new health care law’s rule that they provide medical coverage for permanent workers. (The Obama administration has delayed that provision for a year and into 2015.)

June 2, 2013

Consumer Spending Declines

Consumer spending dropped a seasonally adjusted 0.2 percent in April, the Commerce Department said on Friday. That was the first decline since May 2012. It followed a 0.1 percent increase in March and a 0.8 percent jump in February.

A drop in gasoline prices most likely lowered overall spending. Adjusted for inflation, spending ticked up 0.1 percent in April. Still, that was the smallest gain since October.

Consumers also seemed to spend less to heat their homes in April, which may have reduced spending on utilities. April’s weather was mild after an unusually cold March.

Income was unchanged in April, after a 0.3 percent rise in March and 1.2 percent gain in February. Wages and salaries barely grew, while government benefit payments fell.

In the euro zone, unemployment continued its relentless march higher in April, according to official data published Friday, hitting yet another record.

The jobless rate for the 17 countries that use the common currency rose to 12.2 percent, from 12.1 percent a month earlier, with 19.4 million people out of work, according to Eurostat, the European Union statistics agency. Some analysts said the number of people without jobs could hit 20 million by the end of the year.

Separate data from Eurostat showed that inflation in the euro zone rose to 1.4 percent from 1.2 percent.

Most analysts do not expect the European Central Bank to cut interest rates or take other action to stimulate growth when its policy-making council meets in the coming week, but the inflation rate could prompt the central bank to wait for clearer signs that there is no risk of higher prices.

In the United States, the retrenchment in spending indicates consumers may be starting to feel the effect of higher taxes.

But a separate report Friday showed that consumer confidence rose to a six-year high in May, suggesting the decline in spending may be temporary.

Americans are taking home less pay this year because of a two-percentage-point increase in Social Security taxes. A person earning $50,000 a year has about $1,000 less to spend this year. Income taxes on the wealthiest Americans also increased.

Consumer spending drives 70 percent of economic activity. It grew at the fastest pace in more than two years from January through March, helping the economy expand at a 2.4 annual rate during that quarter.

Economists said the latest spending figures suggested that growth might be slowing in the April-June quarter, to around a 2 percent rate. But most still expect growth to improve slightly after that as the effect of tax increases and government spending cuts fades.

Paul Ashworth, chief North American economist at Capital Economics, called it “a sobering report” for people expecting stronger growth. “There will be some modest pickup in the second half of the year, as the fiscal drag starts to ease, but we expect the improvement to be very gradual rather than dramatic.”

June 2, 2013

IMAX theatre in your home

It’s a costly endeavor, but if you have between $1-$2 million to spend, IMAX will come to your not-so-humble abode and build you your very own private home theater featuring the latest and greatest of the popular imaging technology.

No stone or inch will be left unturned because the company will factor in everything from the room’s geometry, seat placement, acoustics, 7.1 surround sound — basically, all the pieces that complement the giant floor-to-ceiling screen. Oh, and even if your dream mansion hasn’t been built just yet, IMAX will also work with architects and developers to make it happen.

To sweeten the deal, it will also one-up the technology movie goers are used to at public theaters by installing dual projectors with 4K resolution, one that does 2D and the other 3D. The added bonus is the projectors can display on a monstrous screen 120-feet wide, rather than the typical 71-foot size. Not to worry though, local theaters will be scooping this up this year, so the rich and famous won’t have the luxury of early adoption for too long.

And if all that wasn’t enough, IMAX will keep a full commitment to maintaining the technology by offering 24/7 support and constantly monitoring the setup to make sure it’s running as promised.

When IMAX says this is available to “a select few”, it didn’t confirm whether that meant a limited number of installs it could handle, or just those who could afford it and had the space to fit it all in.

June 2, 2013

Rising home prices denting short sales


Q1 foreclosure-related sales down 22 percent from a year ago

Rising home prices in many markets may be giving underwater homeowners the determination to stick it out in the hopes of being able to eventually sell at a profit, stunting the continued growth of short sales, data aggregator RealtyTrac reported today.

Foreclosure-related sales — sales of homes at some stage in the foreclosure process or already repossessed by lenders — were down 18 percent from the fourth quarter of 2012 to the first quarter of 2013, to 190,121. That’s a 22 percent decline from a year ago.

“We expected foreclosure-related sales to be lower given the downward trend in new foreclosure activity nationwide over the past two and a half years, but the decrease in nonforeclosure short sales was a bit of surprise given the 11 million homeowners nationwide still underwater,” said RealtyTrac Vice President Daren Blomquist in a statement.

Rising home prices can reduce the incentive for lenders to sign off on short sales, RealtyTrac noted. A failed short sale may no longer translate into bigger losses down the road, because average prices of real estate owned (REO) homes are rising. In many markets, REO prices are rising at a faster pace than nondistressed home prices, RealtyTrac said.

Markets with the biggest annual increases in the average price of foreclosure-related sales included San Jose, Calif., (up 30 percent); Dayton, Ohio, (up 27 percent); Phoenix (up 26 percent); Las Vegas (up 23 percent); and Sacramento, Calif., (up 21 percent).

June 2, 2013

U.S. Women on the rise as Family Breadwinner

Women are not only more likely to be the primary caregivers in a family. Increasingly, they are primary breadwinners, too.

Four in 10 American households with children under age 18 now include a mother who is either the sole or primary earner for her family, according to a Pew Research Center analysis of Census and polling data released Wednesday. This share, the highest on record, has quadrupled since 1960.

The shift reflects evolving family dynamics.

For one, it has become more acceptable and expected for married women to join the work force. It is also more common for single women to raise children on their own. Most of the mothers who are chief breadwinners for their families — nearly two-thirds — are single parents.

The recession may have played a role in pushing women into primary earning roles, as men are disproportionately employed in industries like construction and manufacturing that bore the brunt of the layoffs during the downturn. Women, though, have benefited from a smaller share of the job gains during the recovery; the public sector, which employs a large number of women, is still laying off workers.


Women’s attitudes toward working have also changed. In 2007, before the recession officially began, 20 percent of mothers told Pew that their ideal situation would be to work full time rather than part time or not at all. The share had risen to 32 percent by the end of 2012.

The public is still divided about whether it is a good thing for mothers to work. About half of Americans say that children are better off if their mother is at home and doesn’t have a job. Just 8 percent say the same about a father. Even so, most Americans acknowledge that the increasing number of working women makes it easier for families “to earn enough to live comfortably.”

Demographically and socioeconomically, single mothers and married mothers differ, according to the Census Bureau’s 2011 American Community Survey. The median family income for single mothers — who are more likely to be younger, black or Hispanic, and less educated — is $23,000. The median household income for married women who earn more than their husbands — more often white, slightly older and college educated — is $80,000. When the wife is the primary breadwinner, the total family income is generally higher.

Such marriages are still relatively rare, even if their share is growing. Of all married couples, 24 percent include a wife who earns more, versus 6 percent in 1960. (The percentages are similar for married couples who have children.)


The implications for the stability of marriages is unclear. In surveys, Americans usually indicate that they accept marriages where the wife is the greater earner. Just 28 percent of Americans surveyed by Pew agreed that it is “generally better for a marriage if the husband earns more than his wife.”

But the data on actual marriage and divorce rates suggests slightly different attitudes.

A recent working paper by economists at the University of Chicago Booth School of Business and the National University of Singapore found that, in looking at the distribution of married couples by income of husband versus wife, there is a sharp drop-off in the number of couples in which the wife earns more than half of the household income. This suggests that the random woman and random man are much less likely to pair off if her income exceeds his, the paper says.

The economists also found that wives with a better education and stronger earning potential than their husbands are less likely to work. In other words, women are more likely to stay out of the work force if there is a big risk that they will make more than their husbands.

Perhaps even more tellingly, couples in which the wife earns more report less satisfaction with their marriage and higher rates of divorce. When the wife brings in more money, couples often revert to more stereotypical sex roles; in such cases, wives typically take on a larger share of household work and child care.

“Our analysis of the time use data suggests that gender identity considerations may lead a woman who seems threatening to her husband because she earns more than he does to engage in a larger share of home production activities, particularly household chores,” the authors write.

Of course, these patterns may change as the job market evolves. College degrees, for example, are becoming increasingly important to both finding and keeping a job. And women are more likely than men to get college degrees.

As of 2011, there were more married-couple families with children in which the wife was more educated than the husband, according to Pew. In roughly 23 percent of married couples with children, the women had more education; in 17 percent of the couples, the men had higher education. The remaining 61 percent of two-parent families involve spouses with about equal levels of education.

Norms are also changing: Newlyweds seem to show more openness to having the wife earn more than her husband than do longer-married couples. In about 30 percent of newly married couples in 2011, the wife earned more, versus just 24 percent of all married couples.

Americans are becoming more accepting of single mothers as well. In a survey conducted April 25-28, Pew found that 64 percent of Americans said the growing number of children born to unmarried mothers is a “big problem,” down from 71 percent in 2007. Republicans are more likely than Democrats or independents to be concerned about the trend.

Today’s single mothers are much more likely to have never been married than in the past, Pew found. In 1960, the share of never-married single mothers was just 4 percent; as of 2011, it had risen to 44 percent. Never-married mothers tend to make less money than their divorced or widowed counterparts, and are more likely to be a member of a racial or ethnic minority.