Thomas Reports was created in 2006. For over 30 years Fred Thomas, III developed a successful career in real estate financing, focused on consumer lending. He is a licensed broker (DRE 01097630) and has managed over two-thousand closed transactions. ThomasReports was created to weave writings and passions under one platform; Real Estate, History, Travel & Culture, Politics and Technology. In today's social media demands, Thomas' voice has been recognized as an official Influencer, Tester and Reviewer for international marketing organizations.
[Exposition Park] On October 25th, the California African-American Museum (CAAM) kicked off its symposium series about Central Avenue. In what appeared to surprise CAAM, nearly 500 came out to hear the presentation from historian Robert Johnson and staff from the Tom & Ethel Bradley Center. The room was filled with enthusiasm and anticipation, and eventually swelled to a standing-room only crowd.
Fred with Robert Lee Johnson, historian and lecturer CAAM
Central Avenue evokes positive feelings for African-Americans. The community became the pride and joy for many, particularly those known as “Easterners.” The event kicked off with a short video provided by the Tom & Ethel Bradley Center titled, “Los Angeles: Displacement of Utopia” It served as an excellent precursor to set the stage of how African-Americans were relegated to the Central Avenue district of Los Angeles. It showcased how despite tremendous racial hostility, they were able to carve out a community which became a model for those migrating from the south, who were also seeking a fresh start. (the video is expected to be made available to the public in the first quarter of 2019)
Johnson, through his brilliance spoke about the development of Central Avenue and how it became a cornerstone to showcase positive attributes of African-American culture. Staff from the Bradley center served as an excellent complement by sharing their research. They also encouraged those in attendance to contact them and help build more oral histories and other memorabilia to insure the story is historically correct. There were many in attendance who had a first-hand experience about Central Avenue. Among them was the son of John Dolphin who created and built the iconic Dolphins of Hollywood Record Shop.
As good as the event was, a downside was CAAM not being prepared for the large crowd. So many in attendance brought specific anecdotal experiences about Central Avenue. Unfortunately, the question and answer period lost its stealth due to a shortage of microphones needed for those to communicate their question as well as some who wanted to speak but could not refrain from turning a question into a diatribe. One other point which hopefully the organizers will address at the next series is keeping the questions on point.
The passion about Central Avenue was obvious from the vibe in the room. The African-American experience in Los Angeles is vast and no doubt Central Avenue has tremendous pride. The event was set for two hours and due to the overwhelming interest the discussion could have gone on for two weeks! However, some inadvertently commented about their general experience and other communities versus sticking to the topic everyone came to hear about: Central Avenue
One other criticism was noted regarding attendance demographics. A lady commented about bringing her mother as well as her kids and pointed out that many more might be in attendance (particularly millennials) to gain this important knowledge if the time was better suited for those who work during the day.
Admission is free. The series continues November 15th and December 13th. To RSVP CLICK HERE.
Tom & Ethel Bradley Foundation housed at California State University Northridge. Click here bradley csun
above caption: Roberts pulling Hill. Digital First Media.
LOS ANGELES, CA – OCTOBER 28: A view of the World Series Trophy after the Boston Red Sox defeated the Los Angeles Dodgers 5-1 in Game Five of the 2018 World Series at Dodger Stadium on October 28, 2018 in Los Angeles, California. (Photo by Harry How/Getty Images)
[Chavez Ravine] Many die-hard Los Angeles Dodgers fans, like myself are finally awakening from the nightmare of losing games four and five of the 2018 World Series, resulting in the Boston Red Sox achieving the championship. As tough as it is, most will salute the Red Sox for executing when they had too. At the same time, they applaud the effort of the Dodgers for making the tough journey through the regular season and going through the gauntlet of the playoffs to be in a position to play in the coveted World Series. But the facts are the facts, even in Little League if you only get three hits, more than likely you will be on the losing end, as was the case in game five. Unfortunately that was the case in games two and five.
“Today is the first day I am able to talk about it. I have been upset since Sunday” A. Tillman, Dodger fan
It seems longer, but Dodgers skipper Dave Roberts just finished his third year. In all of those years his team has made the playoffs. Remarkable, the last two years he took his team to the World Series. As impressive of what he has achieved, including the admiration of most fans, many will still hold his decision in game four of pulling Rich Hill as the death knell of the series, thus ending our season.
Baseball – a game of failure!
Baseball is an interesting game. Those who are not diehards define the game as boring, too long to complete a game, on and on. It’s a very technical game which is why some make comments, having very little understanding of the nuances. It is a game of failure! Most hitters hit between .250 – .300, which translates if you have ten at-bats, you can rest assured you will make an out in seven or even eight times! Unlike other sports such as basketball where you can score quite frequently, games are long due to commercial breaks versus length of actual play. The 18 inning game the other night will be noted in years to come. As was the case in that game, runs or a score can be tough to come by, and the only way a team can be victorious is to outscore the opponent, yet in many innings, like the 18th inning doozy, no runs might be scored at all!
The Wild Horse strikes again
The decision to pull Hill will go down in history as a key point in the 2018 World Series. Just minutes earlier, Yasiel Puig sent Dodger fans into a frenzy by blasting a three-run home run making the score 4 – 0. Surely the Dodgers could secure nine outs and snag a win? In doing so it was a sure bet they would even the series at 2 wins a piece, giving the team the much-needed momentum, they were seeking?
The baseball god’s thought otherwise. While Roberts decision has been the focal point and much consternation of the fans, those who truly understand the game know better. Baseball is a game of statistics and super-charged analysis. In 2018 in the games Rich Hill pitched he normally lasted 5.2 innings. No doubt, in game four he was exceptional and at times appeared ready to break Don Newcombe’s record of pitching complete games of a double-header, on the same day!! He breezed through the sixth inning BUT his pitch count was near a record high of 91. In the bottom of the sixth he told Roberts to “keep an eye on him.” Again, just nine outs to secure a win. He started the seventh inning and walked Aruban sensation Xander Boegerts. Roberts still did not pull the plug. The next batter was the pesky Eduardo Nunez. Hill blew him away with three pitches to strike him out. Apparently, it was at that point that Roberts felt Hill had given his all and wanted him to go out on a high note. In comes Scott Alexander and to the surprise of the nearly 55,000 who were packed in the Ravine, as well as the millions who were watching on television, he walked the next batter on four straight pitches!!! Ouch!
World Series 2018: Dave Roberts on the Dodgers losing Game 4
The rest is history as even though the Red Sox put up nine runs in three innings, there was still hope. Team leader Justin Turner led off the ninth with a hit. The next batter, Kiki Hernandez blasted one of Craig Kimbrell’s pitches into the left field pavilion for a home run, and there were no outs! The enthusiasm quickly dampened as Cody Bellinger meekly flied out to end the game.
Yes, in his usual professional and political demeanor Dave Roberts accepted the blame for the loss, even while trying to explain why he pulled Hill. As mentioned in a game of statistics he had no idea Alexander would walk Benintendi on four straight pitches. Surely, he may have thought about it but he figured the odds were long that recently acquired Ryan Madsen would offer up one of his coveted home run pitches. Worse, perhaps trying to assuage Kenley Jansen’s ego, Roberts called on him in the eighth. Clinging on to a one run lead, many felt it was a likely possibility but Roberts went with his gut which was torn apart as Jensen’s cutter didn’t cut and professional hitters like Steve Pearce earn their millions by being able to handle mistakes, or a pitch which doesn’t cut, instead transforming it to a basic fastball – waist high. Many could hear the great Jim McKay of Wide World of States belting out his famous quote, “the thrill of victory….the agony of defeat.”
“Jansen hasn’t been the same since his heart ailment. These games are too much pressure for him!” JLT, Dodger fan
“What was Robert’s thinking? He knew Jansen hasn’t been doing nothing but giving up homeruns!!! I’m done! A millennial
So, for Dodger fans 2018 is history. Most will recover from their wounds. While some still want Roberts head on a platter, they also realize like the players, managers are not robots and after a couple of months of rehab they, like the other 29 teams who didn’t win the championship will give it another shot in 2019. Go Dodgers!
Cover Photo: Rapper Kanye West hugs U.S. President Donald Trump during a meeting in the Oval office of the White House on October 11, 2018 in Washington, DC. (Photo by Oliver Contreras - Pool/Getty Images)
US President Donald Trump meets with rapper Kanye West and former football player Jim Brown (R) in the Oval Office of the White House in Washington, DC, October 11, 2018. (Photo by SAUL LOEB / AFP) (Photo credit should read SAUL LOEB/AFP/Getty Images)
[Washington, D.C.] This afternoon was a meeting luncheon that may go down in history as Donald Trump hosted Kanye West at the White House. Jim Brown tagged along and from a rare moment where White House staff allowed cameras to document the event, it also showcased a diatribe by West that even appeared to stun the usual fast-talking Trump.
In 1985 the late legendary singer Aretha Franklin came out with one of her many hits, “Who’s Zoomin’ Who?” After today’s luncheon Franklin’s beat came to mind and instead of zoomin’, the words were flipped to hustlin’ or “Who’s hustlin’ who”?
Trump has shown little appetite to have serious meetings with African-American policy-makers or those who are known leaders in the community. However, he has been quick to marginalize that group and instead give audience to the likes of West, who shockingly didn’t even vote in 2016, let alone for then candidate Donald Trump. Although he did clarify his statements indicating had he voted, Trump would have been his choice,
I didn’t vote in 2016 but if I did, ‘I would have voted for Trump’, Kanye West
Trump professes to be a master of the media. Indeed, he gave audience to West but like most manipulators you never fully know his motivation? Some have intimated the luncheon demonstrated his connection to the African-American community. Unfortunately, his track record proves otherwise.
Justifying their allegiance
West made many remarks during his diatribe. Highlighting his ignorance of voting, the process and the final selection; he like many who try to justify their support for the republican party make the claim “blacks are locked into voting for the democratic party.”
Perhaps in their mind it sounds cute and maybe something they truly believe?
“As a bloc, African-Americans are very sophisticated.” Mara Gay, New York Times editorial board.
The basic premise in voting is supporting the candidate or the party who supports your ideals and desires. It may be too much for West to understand or ponder over the years if the democratic party has shown more support for African-American issues than the republican party? Of course, that is not to confuse the issue that just because your vote aligns with one party does not mean all is won and you will get everything you desired? That is why most understand voting is simply one piece of the process, and one that surely does not end after the candidate who won. The other is holding those you voted for accountable. And yes, despite best intentions sometimes there is failure and disappointment. But, like any good fight, you get up and keep fighting but the principal of voting for those who support your ideals is paramount.
“many people believe that, if you’re black, you have to be a Democrat and said he was pressured not to wear his red “Make America Great Again” hat. But he said “this hat, it gives me power.” Kanye West
Now that Trump has completed his luncheon with West this may be a first step? Trump has the opportunity to get serious about African-American issues. West has the opportunity for the African-American community to better understand his sentiments but first things first, let’s make sure he is registered to vote and in fact can participate in the mid-term elections which are just weeks away.
Otherwise, the luncheon may go down in history as “Who’s hustlin’ who?”
Postscript
Much has been said and written about the meeting. Just to add some levity to the issue here is SNL’s take on it.
COVER PHOTO. Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on October 10, 2018 in New York. - Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in US interest rates. At the closing bell, the Dow Jones Industrial Average had lost 3.1 percent or 830 points to finish at 25,613.35, in the biggest fall since February. (Photo by Bryan R. Smith / AFP) (Photo credit should read BRYAN R. SMITH/AFP/Getty Images)
Mortgage rates jumped to 4.90% which is a number not seen in nearly seven years based on Freddie Mac’s weekly rate survey. Although an increase was expected the jump of nineteen basis points caught some by surprise. As strong as the economy is purchasing a home continues to be an illusive transaction for many. The rise in rates buffeted by the increase in home prices have left many reconsidering their plans as evidenced by the drop in mortgage applications.
Remember that tax break earlier in the year?
Last December president Trump and the GOP controlled congress touted the tax cut as a “cure-all” and justification of their leadership prowess. Indeed, a good chunk of working people did receive benefits from the tax cut and a few were lucky enough to get bonuses. The average cut was about $1,600.
For those who were positioning to buy a home or refinance their existing mortgage the recent mortgage rate hike has wiped out that savings.
Time
Rate
Payment
Annual
Oct. 2018
4.90%
$1,252
Oct. 2017
3.90%
$1,113
Diff
$139
$1,668
**based on average mortgage of $239,000
Cyclical
Most understand rates and economic metrics are cyclical. In other words when you have an improved economy, you will also see a rise in consumer goods. Also, recently the Feds increased the discount rate. This was done as a preventative measure to thwart inflation. Normally political leaders stay out of the Fed’s business but Donald Trump has continued to intimate their move has contributed to rate increases claiming they will result in a negative impact.
“I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy,” President Donald Trump
Tariffs
Another pressure-point for the economy is the recent drop in the DOW Jones and financial markets. Business leaders, especially those in the real estate sector attribute the decline to the uncertainty of the Trump imposed tariffs and other measures. They feel recent gains may be wiped out.
“These tariffs will translate into higher costs for consumers and U.S. businesses that use these products, including home builders,” Randy Noel, chairman of the National Association of Home Builders
Today mortgage information provider CoreLogic released its “Annual Fraud Report” documenting a rise in consumer mortgage fraud. The report highlights that recently convicted former Trump campaign manager isn’t the only one who submitted false applications to secure mortgage loans. As in the case of Manafort, mortgage fraud is a federal offense and the penalties can be stiff, including incarceration.
ALEXANDRIA, VA – Manafort was charged with financial frauds and is the first defendant in special counsel Robert Mueller’s investigation into Russian interference in the 2016 presidential election to face trial. (Photo by Alex Wong/Getty Images)
Even though the economy has improved, the rise in home prices and corresponding amount of income needed to qualify for a loan has increased. Although it is a risk management issue the numbers note approximately 1 in 109 applications have some type of fraud. The report reflects the fraud index has increased for the past seven quarters.
Two fraud issues that are top of mind for risk managers right now are false credit disputes and income misrepresentation.
US President Barack Obama shakes hands as Republican President-elect Donald Trump thanked him for creating a positive economy. JIM WATSON/AFP/Getty Images)
Publishing numbers not seen since 1969, yesterday the Bureau of Labor Statistics (BLS) released its October jobs report. The numbers reflect data compiled for the month of September as unemployment dipped to 3.7%, with new jobs pegged at 134,000. That is good news for the Trump administration as it validates their message of a strong economy. The news was expected and comes at a good time for them as even though they inherited the foundation of a good economy from the Obama administration, they have been mired in a string of self-inflicted blunders ever since taking over the reins.
They view those blunders as attacks from those who are upset they won the 2016 election. Others view them as leaders who are inexperienced at managing a government, fraught with suspicious characters linked to criminal behavior.
In addition to the Mueller investigation, they are dealing with a majority of the public not in support of their United States Supreme Court nominee, Brett Kavanaugh. Earlier today Kavanaugh squeaked by with a 50-48 vote. While there is jubilation from those who support Trump and Kavanaugh, the untold cost may not be realized until the mid-term vote slated for November 6th. Some fear this and other moves by the administration might cost the GOP control of congress.
Sen. Elizabeth Warren (D, Mass.) speaks to protestors gathered at the steps of the US Supreme Court as the Nation waits for the expected confirmation Judge Brett Kavanaugh, in Washington, D.C., on October 6, 2018. (Photo by Bastiaan Slabbers/NurPhoto via Getty Images)
Trump understands the media dynamic
As September numbers are a positive sign, Trump no doubt will use the data to proclaim the numbers reflect the lowest, specifically among African-Americans and other minority groups. While the numbers are real and give great justification to those who support Trump, it must be noted he is a master manipulator of the spoken-word and you really have to ponder how serious he is about the claim? Or, is he appeasing to the conscious of those who have very little knowledge of the historic perspective of employment gaps between whites and minority groups? Oftentimes they view any news spouted from Trump as near-gospel, certainly not worthy of understanding the overall context of such statements.
Understanding media, Trump has woven unemployment data into his rallies and other talking-points. The issue for some regarding this sentiment is whether Trump is genuine, as his tone appears to mock the point which is a very serious issue for African-American’s who have been systemically unemployed at a rate at least twice that of whites. This has been lingering problem presidents have been dealing with ever since the notion of race entered the American nomenclature. It was created to divide people and groups. While the numbers in fact have declined, the real gap is a constant historical fact; a key metric providing evidence to the wealth gap that highlights the polarization of our nation.
In attempting to proclaim his support for the African-American community, who can forget this quote Trump made while on the campaign trail?
“Oh look at my African-American over here,” Mr. Trump said. “Are you the greatest? Do you know what I’m talking about?”
OMAHA, NE – MAY 4: Isaiah Hall, 21, responds to a question from Crystal Sauser, a public relations manager, during a job interview at AirLite Plastics in North Omaha on Friday, May 4, 2018, in Omaha, NE. “We’re going to offer you the position,” Sauser said, and the stoic face Isaiah began to melt into a smile. Isaiah finally had a job. Only seven of the overall 13 students (one student started a day after the initial 12 students) would make it through the training and to this morning of job interviews. Over the past decade, concentrated efforts by various organizations in Omaha have helped drastically drive down the unemployment rate among African Americans, particularly in North Omaha, which is majority Black. While Donald Trump brags about how he has helped lower the national unemployment rate among Blacks, the city of Omaha has shown how a small group doing targeted employment bootcamps and workshops can help boost statistics with minimal help from the local, state, or federal government. (Photo by Jahi Chikwendiu/The Washington Post via Getty Images)
Indeed, unemployment numbers are down but a nagging question remains which is why is there a disparity with white workers versus other ethnic groups?
“Among the major worker groups, the unemployment rates for Whites
(3.3 percent) declined in September. Blacks (6.0 percent), Asians (3.5 percent), and Hispanics (4.5 percent)stagnation” Bureau of Labor Statistics (October 2018)
The jobs report will continue to boast consumer confidence. However, the issue for many is keeping pace with rising consumer cost. The Fed’s recent rate hike is the reality of a cyclical economy. Some things go up and others go down. As an example, housing prices continues to soar resulting in many who are employed to delay buying a home, simply because the percentage needed from their paycheck to handle the monthly payment has increased year over year.
Here is an example of 1969:2018 – Wages & percentage of income needed for monthly payment.
(cover photo by Mindy Schauer/Digital First Media/Orange County Register via Getty Images)
(Photo by Liz O. Baylen/Los Angeles Times via Getty Images)
Reverse mortgages, technically known as Home Equity Conversion Mortgages (HECM) have tougher underwriting guidelines effective October 1st.
The announcement was made by the Federal Housing Administration (HUD) which is part of the United States Housing and Urban Development (HUD) agency. HUD insures the mortgages which are originated by lenders at the consumer level, thus allowing borrowers a tool to utilize the equity in their homes to obtain a loan.
The move essentially means in addition to the initial appraisal used to determine property valuation, a second independent appraisal will now be required. The borrower’s loan will be based on the lower of the two appraisals. In a gesture to appease the borrower’s chagrin of the new requirement, the cost of the second appraisal is allowed to be financed as part of the closing costs. In making the move HUD announced it needed extra protection for the collateral being used to obtain the loan, as it battles with a shrinking insurance pool.
House rich, cash poor
HECM’s have picked up in popularity since the early 2000’s. As people have lived longer lives, it was a statistical reality that many seniors were dealing with a precarious situation. For a variety of reasons their cash reserves were being depleted and the result was a negative impact to their day-to-day living. It was also noted many in that population who were homeowners were sitting on large equity positions. Unfortunately, underwriting guidelines made it prohibitive for them to obtain standard mortgage loans.
HECM’s solved that solution, at least for those who were at least 55 years of age and had sufficient equity. Instead of a regular loan where you make monthly payments, the loan actually provides the borrower income based on the equity position. Paying off the debt was not required until the borrower deceased or it was somehow refinanced.
The new guideline is not expected to thwart the popularity of the program. But, it is one critical guideline that HUD feels will help sustain the viability of the program.
[Washington, D.C] Yesterday seemed like any other Friday in September. History does not provide advance warning when it will mark certain things we do as people or identifying key events in the time we live in. It just happens!
Ana Maria Archila and Maria Gallagher had traveled to Washington, D.C. to protest their opposition to the United States Supreme Court nominee Brett Kavanaugh. Based on the attention the nominee had garnered they knew United States Senator Jeff Flake (R-AZ) represented a critical vote. As the week was winding down, Flake had indicated he would support him.
Our nation is one of a federal Republic based on democratic ideals. Politicians like Flake are voted to office with the primary mandate to be a voice of the people they represent. Unfortunately, a good many of citizens, who are of voting age miss this simply equation. Many rarely participate in voting, let alone dialogue with politicians. Then again, there are those who accept the apathetic notion that voting does not matter. Then again there are those who will swear voting has nothing to do with their lives!!!! Nothing could be further from the truth, as in this country just about everything we do or how we are impacted is based on a political implication. In common terms; someone (politicians) creates the policies of the way we are governed or how we go about living out our daily lives. Thus, some have mocked the statement but it is true: we have the type of government representation we voted for! Of course, another way to look at it is to encourage people to participate in the voting process so their desires are known. That does not imply voters will get whatever they desire but it does insure their voice will be heard.
Friday, September 28, 2008 will mark a historic date. Federal Judge Brett Kavanaugh may very well move through the process and become a member of the Supreme Court. However, two motely citizens who are registered voters summoned the courage to confront Flake to make one last appeal to investigate charges that Dr. Bird had made regarding Kavanaugh’s alleged sexual molestation against her. In the end Flake heard their voice and while he indicated there were other factors, he agreed to support Kavanaugh moving through the committee vote; with the condition that a Federal Bureau of Investigation would occur, and that was the simple appeal heard during the hearing desired by Archila and Gallagher was well as those who opposed Kavanaugh’s nomination.
YouTube video courtesy of Ruptly
The move by Archila and Gallagher was bold. Many people have had confrontations with political leaders appealing for their concerns to be heard. But, it was that place in time, on that elevator on Friday, September 28, 2018 which will go down in history that demonstrated the power of why voting matters. More importantly it showcased how you voice might be that changing moment.
The right to protest
I am sure some may disagree with the assessment we have offered but the intent is not aimed on whether you support Kavanaugh or not but to showcase the power of having politicians listen to your appeal. No doubt, Flake will receive admonition from those who disagree with his actions but the bigger issue is Archila and Gallagher did not set out to do anything historic as their intention was to just do something!
Flake surely would like to be remembered as a compassionate representative but that is simply mystery of how history is created. Just look at Rosa Parks and all of the other people who have used their voice to uplift issues they felt needed attention? Or those who have been vilified and criticized for raising their voice. They understood the power of voting and holding representatives accountable.
[postscript]
Many are talking about Judge Kavanaugh’s testimony on Thursday. Some are very pleased about the way he challenged those in opposition to his nomination. Then again, some have remarked how belligerent and disrespectful he was. Surely his performance will be a hit on this week’s SNL but using one of Samuel Jackson’s iconic character’s it has also become a hit on YT
ICYMI
For those who may have been too busy with the Kavanaugh issue or other issues, or maybe just didn’t care about anything in the news – you may have missed a huge ruling rendered yesterday.
(or enriching his pockets while serving as president)
The U.S. District Court Judge Emmet Sullivan found that lawmakers have adequately shown that they’ve suffered harm from the president’s alleged violation of the emoluments clause, which bans benefits from foreign governments unless a majority of both houses of Congress consent.
Above caption. Federal Reserve Chairman Jerome Powell Holds A News Conference Following Federal Open Market Committee Meeting
WASHINGTON, DC - SEPTEMBER 26: Federal Reserve Board Chairman Jerome Powell speaks during a news conference on September 26, 2018 in Washington, DC. The US Federal Reserve raised the short-term interest rates by a quarter percentage point on Wednesday, the third increase of the year, and signaled two more hikes were coming in 2018 and four in 2019. (Photo by Mark Wilson/Getty Images)
CHICAGO, IL – SEPTEMBER 26: Traders monitor offers in the S&P options pit at the Cboe Global Markets exchange shortly after the Federal Reserve announced it was raising interest rates on September 26, 2018 in Chicago, Illinois. The Fed agreed to increase the federal funds rate a quarter percentage point, to a range of 2% to 2.25%. (Photo by Scott Olson/Getty Images)
[Washington, DC] In a move that was forecast several weeks ago, this afternoon Jerome Powell, chairman of the Federal Reserve raised the discount rate to 2.250%. This move occurred to the chagrin of his boss and the person who appointed him Donald Trump, as since June of this year he has been quite vocal that Powell should not raise rates.
The Feds are non-partisan and to effectively operate are independent of political interference. As customary, president’s and those in leadership refrain from making comments about monetary policy. That is most, except Trump who once again has demonstrated his lack of understanding regarding political protocol.
“I’m not thrilled,” Trump said in an interview last month
Powell has stood firm and justified the move to control a positive economy. The discount rate is the cost commercial banks pay for funds. Their impact does not immediately affect consumers but they typically result in higher borrower costs.
You can’t have it both ways
In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 2 to 2-1/4 percent. Jerome Powell, Fed Chairman
Ever since the financial meltdown of 2008, systemic changes were adopted to strengthen the economy. In Trump’s case, even though it is very tough for him to admit he inherited an economy that had all the signs of positive growth, as a practical measure it must be properly managed. As the economy moves forward, it is the Fed’s who are in control of monetary policy and to manage interest rates so that inflation of other negative factors are mitigated.
The nine member panel of the Federal Reserve Open Market Committee voted unanimously to support the increase.
Real estate is a key component of the U.S. economy. Aside from providing basic shelter, it is a commodity that consumers desire to purchase and a mortgage is used to finance the transaction. Yet, it was the environment in 2008 where an industry as we knew it offered slim prospects of recovery.
Fast forward to 2018, recovery is obvious. home prices continue to climb to record levels leaving many to wonder if they will ever be able to afford a home, let alone experience the “American dream?” At the same time if must not be discounted that millions, for various reasons lost homes. For them, then and now home-ownership represents the biggest transaction they will complete in their lifetime. Likewise, it represents the biggest financial asset.
NEW YORK – SEPTEMBER 17: Traders work on the floor of the New York Stock Exchange September 17, 2008 in New York City. The Dow Jones Industrial Average closed down 449 points today despite American International Group, Inc. (AIG) $85 billion government bailout. (Photo by Mario Tama/Getty Images)
For some 2008 seemed like a lifetime ago. No doubt it was a scary time especially for those who were part of the economic meltdown. Cash was tight, employment or the ability to earn a living was in great jeopardy, homes which were treasured started disappearing in record numbers – like never seen before. Many were lured into the notion property appreciation was constant and even though they may have bet on risky mortgage products, they felt confident they would be able to refinance out of any calamity. Political leaders labeled the period as one not seen since the great depression of the 1930’s.
BOWIE, MD-AUGUST 18: Comfort Boateng sorts through two large boxes of mortgage and financial papers as she talks about their financial situation on August 18, 2014 in Bowie, Maryland. The Boatengs continue to live in their home where they haven’t made a mortgage payment in nearly six years. They built the 3,292-square-foot Fairwood home in 2005. Fairwood, is among one of the richest black neighborhoods in America, in Prince Georges County Maryland; yet it was among the hardest hit from the financial crisis of 2008. More than half of the people who bought homes there wound up in foreclosure. (Photo by Michel du Cille/The Washington Post via Getty Images)
The crisis erupted in 2008, however signs were simmering that something might be amiss as early as 2005. Interestingly it was a common refrain for the very political leaders and even industry leaders to target the culprit as subprime lending. The problem with that assessment is it is incorrect, at least from a practical definition.
WILMINGTON, OH – DECEMBER 19: Bill and Dottie Neace embrace in their home December 19, 2008 in Wilmington, Ohio. Dottie Neace, currently undergoing radiation treatment for breast cancer, fears she may not be able to continue her treatments if her husband loses his job, which provides their health insurance. He works for the air shipping company ABX, which is currently laying off thousands of workers. He recently underwent surgery for a ruptured colon, making eligibility for affordable post-employment healthcare uncertain. The job cuts between air shipping partners ABX and DHL, the two largest employers in Wilmington, will total between 7,000-10,000 lost jobs. The resulting high rate of unemployment is expected to devastate the local economy, both in terms of health coverage for residents, joblessness and in lost tax revenues to support schools and basic services in the area. (Photo by John Moore/Getty Images)
Prior to subprime coming into the mortgage vernacular in the mid 1990’s, most mortgages were considered prime. You had to fully qualify, including for some with what appeared to be exhaustive documentation. . Your credit was not required to be perfect as long as any blemishes could be documented and explained.
Sub is a suffix and means “less than” or “below.” Unfortunately, some would have you believe it meant bad credit, inferior housing or something that was substandard. No doubt many who obtained mortgages were in that population but there was a good percentage who in fact had good credit as well as good property.
Alternative mortgages
A more reasonable understanding is defining subprime as synonymous with alternative. In other words, subprime mortgages merely meant the borrower could not qualify for a prime mortgage. As stated, there were millions of borrowers whose credit was above average and the alternative mortgages became a solid vehicle for them to obtain affordable mortgages. Why was an alternative mortgage necessary? For some, they could not fully document their income via traditional methods. However, they had just as much money in their bank accounts as normal borrowers and their credit was just as solid. Lenders recognized this challenge thus alternative mortgages were born and the market took off.
As lenders created alternative mortgages they became part of the overall subprime population. However, it did not have the negative connotation subprime became labeled. That is why blaming the crisis on those on the fringes with credit issues appears an easy explanation but that short-changes the reality of the subprime market.
There were many reasons which led to the crisis that erupted in 2008. Experts have suggested factors germinated as early as 2006 and the signs of a downfall was apparent. The only problem was many were in denial and for a good chuck of that population it was simply too late to recover.
“I’ve been in this business a long-time and have trained real estate professionals all over Southern California. I’m telling you, the market is about to crash! The late Jerry Timpone, 2006
In 2008 the average home price in Southern California was $429,000. However, it must be noted that due to the crisis millions of homes were being snapped up for far less (via foreclosure and other issues which left many homeowners fleeing their properties).
HENDERSON, NV – APRIL 6: (L-R) Prudential Americana Group realtors Andrew Newcomb and Georgina Hernandez, go over information with Marylou Aleta and Chris Tan, both of Nevada, during a bus tour of bank-owned homes April 6, 2008 in the Las Vegas suburb of Henderson, Nevada. Prudential began operating Repo Tours Las Vegas recently to try to help sell the increasing number of repossessed homes. The number of foreclosures, and homes on the brink of being foreclosed on in the Las Vegas area, continues to be among the highest in the nation while the ongoing subprime mortgage crisis spreads throughout the country. (Photo by Ethan Miller/Getty Images)HENDERSON, NV – APRIL 6: People walk past an auction sign as they take a bus tour of bank-owned homes April 6, 2008 in the Las Vegas suburb of Henderson, Nevada. The Prudential Americana Group began operating Repo Tours Las Vegas recently to try to help sell the increasing number of repossessed homes. The number of foreclosures, and homes on the brink of being foreclosed on in the Las Vegas area, continues to be among the highest in the nation while the ongoing subprime mortgage crisis spreads throughout the country. (Photo by Ethan Miller/Getty Images)
Compared to today’s average home price of over $600,000, even $429,000 seems like a steal! 2008 was a turbulent time and compared today, it is a thing of the past. During that ten-year period many who held onto their homes have been able to secure a more fixed payment mortgage, thus the surprises of a fluctuating mortgage which was popular during the early to mid-2000’s has been mitigated.
Companies/Business were imploding as we Cities
As indicated real estate, specifically the mortgage sector is important to our economy. As the implosion of businesses picked up steam, the residual effect found cities and communities in great peril. They too were dealt blow after blow as neighborhoods became decimated, thus reducing taxes cities need to operate.
WILMINGTON, OH – DECEMBER 19: Shawn Stephens, a mechanic with the air shipping company ABX, listens at a town hall meeting December 19, 2008 in Wilmington, Ohio. Local leaders and residents discussed the possibility of economic collapse of Wilmington, a town of 12,000 people, and the surrounding areas. ABX is currently laying off thousands of employees, along with its partner, the German shipping company DHL. The massive layoffs between the two largest employers in Wilmington will total between 7,000-10,000 lost jobs. The resulting high rate of unemployment is expected to devestate the local economy, both in terms of joblessness and in lost tax revenues to support schools and basic services in the area. (Photo by John Moore/Getty Images)
While economic challenges are not the main concern as it was in 2008, today the primary concern is having enough income and down payment to snag a property. Of course, even those who may be in a qualifying position are contemplating the definition of a “fixer-upper” or considering moving outside of the metropolitan area, which years ago would have been unthinkable.
So, average prices come and go. Economic conditions are constant but looking back ten years is important to recognize the cyclical nature of real estate and realizing that most things are relative. The take-away is if $429,000 was a jolt, and $600,000 redefines sticker-shock, it is a good bet prices will go higher before they go lower.
As for mortgages and looking back ten years, it is a simple equation; people will always have the need for shelter and a good many will be lucky enough to become homeowners. Mortgage lenders will always look to satisfy those borrowers who are seeking affordable financing because assuming everyone has at least twenty percent as down payment and stellar credit would depress the market to a point that is not reasonable. The trick, like any consumer purchase is to properly assess your situation so that you are not forced into a mortgage or a predicament which has the remnants of the 2008 meltdown.
Single Family Residences a 10-year look-back
Year
Single Family Residences
Los Angeles
Orange
Ventura
San Bernardino
Riverside
San Diego
2018*
$629,500
$766,000
$625,000
$338,900
$379,800
$623,900
2017
$613,200
$750,400
$605,200
$326,600
$370,500
$607,500
2016
$569,100
$711,300
$575,200
$297,800
$344,200
$565,000
2015
$528,900
$681,800
$540,700
$273,900
$320,600
$529,600
2014
$486,700
$643,000
$512,000
$255,000
$300,200
$492,300
2013
$456,500
$620,000
$486,000
$230,700
$274,900
$468,500
2012
$389,200
$535,100
$419,900
$185,200
$221,700
$403,300
2011
$363,100
$494,800
$389,100
$168,800
$201,100
$370,300
2010
$391,300
$524,300
$419,500
$178,300
$213,700
$392,800
Year
Single Family Residences
Los Angeles
Orange
Ventura
San Bernardino
Riverside
San Diego
2009
$400,400
$539,400
$427,400
$184,500
$214,300
$401,800
2008
$429,200
$553,700
$456,500
$227,300
$254,800
$422,100
2007
$525,300
$629,200
$539,700
$328,700
$351,900
$502,700
2006
$582,200
$718,700
$625,800
$380,200
$425,800
$559,200
2005
$566,000
$715,300
$636,500
$364,700
$422,200
$572,900
2004
$481,600
$648,000
$582,000
$298,500
$366,700
$565,300
2003
$376,300
$518,100
$461,600
$216,400
$280,500
$448,100
2002
$303,700
$424,700
$378,000
$174,300
$227,700
$373,100
Year
Single Family Residences
Los Angeles
Orange
Ventura
San Bernardino
Riverside
San Diego
2001
$253,800
$361,000
$314,500
$150,700
$196,100
$312,400
2000
$227,500
$322,700
$283,600
$135,500
$176,600
$276,000
1999
$204,000
$285,400
$255,300
$124,400
$160,900
$240,000
1998
$185,400
$262,900
$229,700
$116,400
$146,500
$211,100
1997
$171,000
$230,500
$204,200
$111,000
$135,000
$188,100
1996
$164,000
$214,900
$195,100
$109,800
$129,900
$177,100
Condominiums / Co-Ops
Year
Condominiums / Co-Ops
Los Angeles
Orange
Ventura
San Bernardino
Riverside
San Diego
2018*
$528,800
$505,200
$444,200
$336,800
$278,700
$439,000
2017
$513,300
$493,700
$424,300
$329,100
$271,100
$426,200
2016
$471,200
$456,100
$399,200
$300,100
$257,500
$391,900
2015
$443,300
$433,100
$373,100
$280,400
$250,000
$361,000
2014
$411,200
$407,400
$349,200
$263,100
$240,600
$334,500
2013
$386,900
$387,700
$328,400
$238,800
$227,400
$314,400
2012
$325,000
$316,600
$273,800
$185,500
$187,000
$259,700
2011
$312,200
$300,000
$259,500
$178,900
$174,200
$243,500
2010
$339,400
$325,800
$284,900
$195,800
$193,700
$269,300
Year
Condominiums / Co-Ops
Los Angeles
Orange
Ventura
San Bernardino
Riverside
San Diego
2009
$357,100
$341,200
$303,200
$202,800
$205,500
$278,200
2008
$371,300
$363,000
$328,700
$231,200
$225,900
$300,500
2007
$434,700
$421,700
$394,500
$313,300
$283,600
$352,400
2006
$483,200
$482,200
$464,200
$362,900
$346,100
$393,200
2005
$474,400
$480,800
$473,700
$356,300
$349,300
$417,300
2004
$413,500
$440,500
$433,200
$301,300
$301,300
$418,400
2003
$320,500
$348,700
$346,100
$221,800
$227,300
$334,900
2002
$260,600
$283,100
$281,300
$175,400
$188,400
$276,600
Year
Condominiums / Co-Ops
Los Angeles
Orange
Ventura
San Bernardino
Riverside
San Diego
2001
$216,400
$239,800
$232,400
$151,000
$169,800
$228,000
2000
$189,500
$208,800
$204,700
$136,800
$149,900
$193,800
1999
$170,400
$181,800
$181,300
$127,300
$130,300
$162,700
1998
$154,700
$166,100
$166,000
$117,600
$117,000
$143,400
1997
$141,100
$146,600
$152,000
$111,500
$111,700
$129,500
1996
$136,800
$137,900
$145,300
$108,500
$106,500
$122,600
* 2018 Median price is for May 2018
N/A – Data not available from source
Note: Movement in regional sales prices should not be interpreted as measuring changes in the cost of a standard home. Prices are influenced by changes in costs and variations in the characteristics and size of homes actually sold.
The housing crisis was an important historic event. Fred Thomas, III tags himself as a “student” of the mortgage industry and speaks with credibility having been employed at Countrywide Home Loans, IndyMac Bank and Bank of America. He is currently working on a book which takes a look at the rise and fall as well as the importance they played and the development of the industry.
Thomas Reports 