Category Archives: 70 Words

Commission Consequences

While the long-term impact of NAR’s agreement to end litigation brought on behalf of sellers, related to broker commissions, may take a while to become apparent, the immediate results were clear. On Friday, the day the agreement was announced, the stock price for RE/MAX declined 3.1%, for Redfin 4.9%, for Zillow 13%, for Compass 14.3%, and for Douglas Elliman 16.2%, suggesting that overall commissions and brokerage profits will be lessened.

Dog Days

The Friday File: A study of 584,734 dogs has found small, long-nosed, female dogs have the longest average lifespan at 13.3 years. The median canine lifespan is 12.5 years. Dogs with flat faces live an average of 11.2 years. Interestingly, they also find purebreds live 12.7 years while crossbreeds live 12. The longest-lived, the Lancashire heeler at 15.4 years, the shortest life expectancy, the Caucasian shepherd which averages 5.4.

Tax Totals

As of 3/1/24, the IRS issued 36.2 million refunds versus 42 million refunds Y-o-Y. However, tax filing season began on 1/23/23 compared to 1/29/24. That said, so far, the IRS has processed 53.2 million returns vs. 54.3 million last year. The IRS has issued 36.2 million refunds vs. 42 million Y-o-Y with the average refund worth $3,128 vs. $3,028 Y-o-Y. All in all, no meaningful differences versus 2023.

Poor Policy

The new White House pilot program designed to save homeowners money by waiving the requirement for title insurance on some refinancings by some lenders is, while well intended, ill advised. It’s because at the margin this increases housing demand, which will further raise prices, which are already high as we are short millions of units. Instead, boost the supply side by promoting more residential construction.

Recovery Rate

Since 1945, when equities retreat 5%-9.9%, on average it takes 1.5 months for markets to recover and recoup all losses. When markets experience a correction, a decline of 10%-19.9%, it takes on average 4 months to recover, and when they experience a bear market, a decline of 20%-40%, it takes about 13 months to recover. However, when markets fall more than 40% it takes a whopping 58 months to recover.

Detrimental Data

February net job creation was a strong 275,000. However, January’s growth was dramatically revised down to 229,000 from 353,000, heaping more doubt on the quality of the monthly net employment numbers. Therefore, focus on the unemployment rate, which at 3.9% is the highest it’s been since 1/22, and up significantly from a low of 3.4% as recently as 4/23. This rise should get the Fed to cut rates in June.

Country Cash

The Friday File: The wealthiest nation is Luxembourg with per capital GDP of $135,605, followed by Ireland at $112,248 and Switzerland at $102,865. No other nations exceeded $100,000. Norway was next at $99,266. Singapore was 5th at $87,884 then, Qatar at $81,968, and the USA at $80,412, which is downright amazing given its size. The top six nations are all small or tiny and enjoy idiosyncratic benefits.

Weakening Wages

In 1/23, when the labor market was sizzling, Y-o-Y wage growth for those employed during the previous year peaked at 6.4%. Among those who changed jobs it was 7.7%, and among those who didn’t change jobs it was 5.7%. By 1/24 overall Y-o-Y wage growth weakened to 5.5%, for switchers it was down a stunning 1.6 percentage points to 6.1%, but for stayers it fell one-third as much to 5.1%.

GDP Growth

24Q1 GDP growth is slipping. The St. Louis Fed has reduced their latest estimate from 1.4% (annualized) to 0.9%. Not to be outdone, the NY Fed has reduced its forecast from 2.8% to 2.3%, and the Atlanta Fed has pushed down its current expectation from 3% to 2.1%. Averaging the three has 24Q1 GDP coming in at 1.8%, well down from 23Q4 at 3.2%, and a decline of almost 50%.

Continuing Claims

For the week ending 2/17/24, continuing unemployment insurance claims were 1.88 million. While very low, this is their highest level since the week ending 12/11/21. Moreover, the percentage of people filing for unemployment insurance has recently fallen from 36% to 30% as UI benefits haven’t kept up with the higher post-Covid cost of living. This decline reduces somewhat the value of this data series as a leading economic indicator.