Mortgage Applications Highest in Three Years

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"Mortgage applications increased 18% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 8.

The Market Composite Index, a measure of mortgage loan application volume, increased 18% on a seasonally adjusted basis from one week earlier to the highest level since May 2009.  On an unadjusted basis, the Index increased over 30% compared with the previous week.  The Refinance Index increased over 19% from the previous week to the highest index level since April 2009." 

MP: More evidence that the real estate market is making consistent gains, and in a gradual recovery mode. 

SF Home Sales Highest for a May Since 2006

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LA Times -- "The San Francisco Bay Area's housing market strengthened in May as sales leaped, pricier homes were bought and fewer foreclosures sold. Bay Area sales were at a six-year high for a May last month while sales of homes costing more than $500,000 surged, real estate information firm DataQuick reported.
Sales were up 14.8% from last month and 26.1% from May last year to total 8,810 newly built and previously owned homes sold in the Bay Area last month. The Bay Area median home price rose 2.6% from last month and was up 7.5% from May last year to hit $400,000." 

MP: With both home sales increasing (by 26.1%) in May and median prices increasing (by 7.5%), following an 8.3% increase in median prices in April, I think you've got the ingredients for a real estate recovery in San Francisco.

Freelance Nation: The Boom in Online Workers

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NY Times -- "Global networks make it possible to obtain work anywhere, enabling companies to hire many specialists for specific tasks at fixed amounts. Chances are this is only getting started, and there are profound implications for things as diverse as corporate structure, employment, job skills and even taxation.
On Wednesday, Elance ("Instant Access to Great Talent"), a company that brokers often sophisticated short-term work online, released a survey of its customers’ hiring plans. The company asked what percentage of their work force would, in five years, consist of online temps. On average, the customers projected that more than half of their work force, 54% of all workers, would be these outsiders from around the globe.

The survey was unscientific and polled mostly small companies. Only 2.3% of the 1,500 companies surveyed had more than 100 employees. It is, however, another indicator that cloud-computing-based employment brokers like Elance, ODesk and Freelancer.com are gaining acceptance.
These companies allow easy hiring and collaboration between, say, a software developer in Russia and a marketing specialist in England on a project for a firm based in the United States. Job candidates present portfolios of past work, bid on listed jobs and are rated, much like the sellers of goods on eBay."

Markets in Everything: Vending Machine Pizza

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LA Times -- "Get ready for Let's Pizza, a pizza vending machine that promises to deliver a piping hot pizza pie made from scratch in less than three minutes. The pizza arrives in an insulated take-away box. The machine takes cash and credit cards. A 10-inch pizza will sell for about $5.95. Americans can expect to see the new machines at malls, airports, hospitals, restaurants, hotels, supermarkets, universities, gas stations and bus stations."
Prediction: Obesity Czar Bloomberg will ban these in NYC. 

CA Real Estate Market Heats Up in May

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LA Times -- "Home sales and prices strengthened throughout the Golden State in May, providing the latest evidence housing might be snapping out of its long slumber. Sales popped 9.3% from April and jumped 17.6% from May 2011 to total 41,790 new and previously-owned houses bought statewide.  The state’s median home price hit $270,000, rising 2.3% from the prior month and up 8.4% from May 2011.
“It’s not exactly a stampede, but people are starting to move off the housing market sidelines in numbers we haven’t seen in quite a while,” DataQuick President John Walsh said. “And it’s not just first-time buyers and investors. There are more move-up buyers in mid- to high-end coastal counties.”
Home sales in the Golden State have posted year-over-year gains for 10 consecutive months and foreclosures have steadily been making up a smaller share of the market. Sales of distressed homes made up just 46.2% of the market, the lowest figure since April 2008."

IJ Helps Caveman Blogger Fight for Free Speech

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The Institute for Justice asks a very important question: "Can the government throw you in jail for offering advice on the Internet about what food people should buy at the grocery store?"
"That is exactly the claim made by the North Carolina Board of Dietetics/Nutrition. In December 2011, diabetic blogger Steve Cooksey started a Dear Abby-style advice column on his popular blog (www.diabetes-warrior.net) to answer reader questions. One month later, the State Board informed Steve that he could not give readers advice on diet, whether for free or for compensation, because doing so constituted the unlicensed, and thus criminal, practice of dietetics. The State Board also told Steve that his private emails and telephone calls with readers and friends were illegal, as was his paid life-coaching service. The State Board went through Steve's writings with a red pen, indicating what he may and may not say without a government-issued license."
"But the First Amendment does not allow the government to ban people from sharing ordinary advice about diet, or scrub the Internet—from blogs to Facebook to Twitter—of speech the government does not like. North Carolina can no more force Steve to become a licensed dietitian than it could require Dear Abby to become a licensed psychologist."
"That is why on May 30, 2012, Steve Cooksey joined the Institute for Justice in filing a major free speech lawsuit against the State Board in the U.S. District Court for the Western District of North Carolina, Charlotte Division. This lawsuit seeks to answer one of the most important unresolved questions in First Amendment law: When does the government's power to license occupations trump free speech?"
Watch video above for more information.  

Dueling Consumer Confidence Reports

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1. Last Friday, Thomson Reuters/University of Michigan reported that its consumer sentiment index increased in May for the ninth straight month.  That set a new record for the most consecutive monthly increases in the history of the index going back to 1978.  It was also the most upbeat American consumers have been in more than fours years, since October 2007 before the recession started.  Bloomberg reported that "A record number of households said they'd heard better news on the jobs outlook, which combined with cheaper gasoline and an improving housing market may help sustain consumer spending and shield the economy from Europe's debt crisis."

2.  This morning, Gallup reported that its Economic Confidence Index held at -16 last week, the highest index level in the four-plus years of Gallup Daily tracking in the United States.

3. Also this morning, The Conference Board reported that its consumer confidence index fell to a five-month low in May, as Americans were less optimistic about current labor market and business conditions, as well as the short-term outlook.
What are we to make of these conflicting consumer confidence reports?  Perhaps it's a reflection of the weakness in survey-based measures of consumer confidence, or that surveys have large margins of error?  
In other news today, S&P reported that its Case-Shiller Home Price Index dropped in March by 2% to a post-crisis low.  Note that the Case-Shiller home price index is calculated based on a three-month moving average with a two month lag and is therefore based on home prices in January, February and March.  The sales and price gains I was reporting recently were for April, and those improvements won't be captured by the Case-Shiller index until next month's report.