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Twitter Weekly Updates for 2010-01-31

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Home Sales In N KY Down for the Year

No real surprise here, at least in N. Kentucky.  Home sales up slightly in December,  but down overall for the year.  Even with the tax credit for first time buyers.  Check out for more.

“. . . sales in Northern Kentucky continued to slip for the full year, falling to 4,852 sales, down 5.6 percent from 2008. Sales were up for December by 1.5 percent with 328 sales, the Northern Kentucky Association of Realtors reported.

Nationwide, sales climbed 4.9 percent for the year, the National Association of Realtors said.

Realtors credit a large portion of the sales gain locally and nationally to the federal home buyer tax credit that lured thousands of first-time buyers into the market last year.

First-time buyers purchased 43 percent of homes in December, down from 51 percent in November, according to a national Realtors survey. The $8,000 first time buyer credit has been extended through April 30, and expanded to include a $6,500 credit for current homeowners looking to buy again.

Experts say the credits will yield another sales gain this year, but economists warn that the job market remains a concern that could dampen the housing recovery.

While sales may be on an upswing, the big question for 2010 is if and when will prices begin to rebound.

Locally and nationally, median home prices – the midpoint of all sales – continued to slip in 2009.

In Southwest Ohio, the median price was down 4.6 percent to $123,000; in Northern Kentucky, the median price slipped 4.2 percent to $126,600. Prices nationwide were off 12.4 percent from 2008 to $173,500.

Realtors say sales of distressed homes – which include foreclosures and short sales – continue to drag down prices because the deals sell at extreme discounts.

“There is a pipeline of foreclosures that will continue to impact the market, but we don’t know if it will hit us in 2010 or 2011,” said Rebecca Trout, president of the Northern Kentucky association’s board. “No one has a glass ball to look into. If (new foreclosures) are spread out, the impact won’t be as severe. If they all hit at once, it could have a significant impact.”

For all of 2009, Realtors estimated that roughly 36 percent of all national sales were distressed properties.

Tim Mahoney, president of the Cincinnati Area Board of Realtors says in spite of the coming wave of foreclosures, he believes the region has already reached the bottom of the price declines.

“Even though there are more foreclosures coming, we’re beginning to weed through a lot of them,” he said. “As we do, it will be reflected in housing prices stabilizing and eventually going back up.”

Monday’s reports also revealed that the inventory of unsold homes is shrinking locally, another key to a more normal market.”

PNC 4Q Report

Comments from PNC’s 4Q report:

“Now, let me talk briefly about credit availability. PNC remains committed to responsible lending. We recognize the vital importance of credit to our country’s economic growth and we continue to work closely with main street businesses and consumers during these financially difficult times. In fact, we originated and renewed more than $110 billion in loans and commitments in 2009.

For homeowners, our goal is to avoid foreclosure where appropriate and we’ve been expanding our use of short sales as one tool to help consumers. Additionally, we’ve completed nearly $0.5 billion in refinances through the end of the fourth quarter under the home affordable refinance program and we’ve sent out more than 70,000 workout packaged to troubled borrows under the home affordable modification program.

On the commercial side we continue to call our small businesses and corporations. We have stepped up our efforts and are giving a second look to credit requires given the importance of credit to the economic recovery. As a result, we originated and renewed nearly $4 billion in small business loans in 2009 and we continue to be a leader in loan syndications, arranging nearly $14 billion in business loans for the full year.”

Fayette County Foreclosures Up

From Business Lexington:

Foreclosure rates in Lexington-Fayette increase

Foreclosure rates in Lexington-Fayette increased in November over the same period last year, according to First American CoreLogic.

The latest information from the real estate data and analytics organization shows the rate of foreclosures among outstanding mortgage loans in the Lexington-Fayette County area at 1.67 percent for the month of November, an increase of 0.80 percentage points compared to November of 2008.

Foreclosure activity in Lexington-Fayette is lower than the national foreclosure rate, which was 3.09 percent for November 2009, representing a 1.35 percentage point difference.

The area’s mortgage delinquency rate also has increased. First American CoreLogic data for November 2009 shows 4.17 percent of mortgage loans were 90 days or more delinquent compared to 2.59 percent for the same period last year, an increase of 1.58 percent.

Leading the nation in foreclosure rates in 2009 were Nevada, Arizona and Florida, according to RealtyTrac. Kentucky was 40th. With unemployment and wage cuts overcoming programs to remedy failing home loans, RealtyTrac is forecasting another record-breaking year for foreclosures across the nation in 2010.

Number of Nuisance Properties Grows

Cincinnati is starting to see more and more of these properties.

“A danger to firefighters, crime magnets, crumbling, unsafe, a nuisance to the neighborhood – these words were repeated over and over earlier this month during hearings in which Cincinnati city officials sought to declare 25 properties public nuisances, a designation that allows the city to demolish the blighted buildings.”

. . . .

“Neighborhood groups say blighted properties drag down surrounding home values.”

. . . .

[T]the foreclosure crisis [is blamed] for the surge in problem properties.

During the first nine months of 2009, foreclosures in the seven Greater Cincinnati and Northern Kentucky counties rose 5.6 percent – outpacing statewide growth in foreclosure in both Ohio and Kentucky, according to latest court records.”

Investment in foreclosed properties helps out neighborhoods, gets the properties off the books of the banks, and helps keep up cities.  There are some great deals out there.  However, an investor cannot be an absentee landlord, that only makes the problem worse.

So go out there and look for some great deals, but invest for the right reasons as well.

Here’s the full article from

Green Jobs Grant

“As a result of a multi-cabinet collaboration, Kentucky has been awarded a $4,740,457 State Energy Sector Partnership and Training grant by the U.S. Department of Labor (USDOL). Funds will be used to teach more than 600 Kentuckians the skills required in emerging green industries including energy efficiency and renewable energy.

. . . .

Through the grant, Kentucky will focus on jobs in energy-efficient building, construction and retrofit, energy efficiency assessment, and renewable energy. Participants in the Cumberland and West Kentucky Workforce Investment Areas who are dislocated workers, unemployed individuals, out-of-school youth and veterans will have the opportunity to earn degrees and industry-recognized certification in green job industries including energy assessment, Smart Grid technology, chemical engineering, plumbing and pipefitting.”

4Q Reports

2009 4Q Reports are coming out from banks located here in Kentucky.  The reports seem to indicate that banking is at least stabilizing.  But foreclosures and other problems suggests that 2010 won’t be a great year either.

Republic Bancorp shows some stabilization, but they are getting ready for potential losses to come:

“Republic Bancorp Inc. reported substantially higher profit for the fourth quarter and 2009 as its income from traditional banking and mortgage operations recovered from the economic downturn.

But Republic tripled its loan-loss reserves against potential future losses, and it reported a slight decrease in net interest income.

. . . .

According to a news release from the company, the improved profitability was a result of better performance in core banking operations. Income from traditional banking and mortgage operations rose to $5.3 million from $3.6 million a year earlier.

The report is part good news, part bad.

After taking about $8.2 million in impairment writedowns, mostly on securities, during 2008, Republic had no impairments for the final quarter of 2009.

But the bank nearly tripled its loan-loss provision for the final quarter, to $5.2 million from $1.8 million for the fourth quarter of 2008. For the year, the company’s provision to cover potential bad loans rose to about $34 million from $16.2 million.

Steve Trager, Republic’s president and CEO, noted in the statement that although Republic’s nonperforming loans and chargeoffs are substantially better than peer averages, the bank continues to increase reserves “in cautious recognition of the current economic environment,” including historically high unemployment.

The company reported mortgage-banking income of $1.7 million for the fourth quarter, compared with a loss of $270,000 a year earlier. For the year, mortgage-banking income rose to $11 million from $3.5 million in 2008.”

This all leads back to the fact that unemployment still looms large, so it is certainly a possibility that foreclosures will continue to rise.  With loss mitigation efforts set to expire, a pent-up amount of foreclosures will hit the court system, plus, if there aren’t any jobs to get people back to work sooner than not, then those homes will go into foreclosure status.

Kentucky’s Unemployment Rises to 10.7%

Not to add any more negativity to an already bleak situation, but Kentucky’s unemployment rose slightly in December.  Not that this is a big shock to most people, but everyone, I know, was hopeful that people would at least have some seasonal work.  But that doesn’t seem to be the case.  From the Education and Workforce Development Cabinet:

“Kentucky’s seasonally adjusted preliminary unemployment rate rose to 10.7 percent in December 2009 from a revised 10.6 percent in November 2009, according to the Office of Employment and Training (OET), an agency of the Kentucky Education and Workforce Development Cabinet.

December 2009’s jobless rate is 3.1 percentage points higher than the 7.6 percent rate recorded in December 2008 for Kentucky. The 10.7 percent rate recorded in December 2009 is the highest since October 2009 when the unemployment rate reached 11.3 percent.”

The rest of the press release discusses where we have added jobs, but particularly, where we have lost jobs.  Clearly, we have a long way to go in creating jobs.

What have you seen in your county?

Should Bernanke Be Re-Appointed

Fed Chairman, Ben Bernanke is facing a tough re-appointment hearing in the Senate.  It appears that many in Congress and the general public blame him for some of the problems.

However, on can certainly argue that Bernanke helped steer us clear of the recession turning into a depression.  Further, he was appointed by President Bush, confirmed then, by a Republican controlled Senate, and now enjoys President Obama’s support.  This certainly will be an interesting confirmation process to watch, with ramifications years to come.  Here is some more from an article:

“In a boost for Bernanke, Senate Majority Leader Harry Reid of Nevada came out late Friday and endorsed him. Reid’s previous silence about his position on the Fed chief stoked concerns about the nomination. “An expert on the Great Depression, Chairman Bernanke helped steer us away from a second one,” Reid said. Still, he said Bernanke must “redouble” his efforts to help struggling Americans.

. . . .

White House deputy press secretary Bill Burton, talking to reporters as Obama headed to Ohio Friday, said the president has “a great deal of confidence” in the actions Bernanke already has taken and believes he’s “the best person for the job.”

. . . .

If Bernanke is not confirmed before his term expires, Fed Vice Chairman Donald Kohn would probably step in as chairman and run the central bank on a temporary basis.

While praised for preventing the recession from turning into another depression, Bernanke’s support of Wall Street bailouts — especially the $182 billion rescue of insurance giant American International Group Inc. — has touched a nerve on Main Street.”

Bleak Outlooks for Many States

From the  “It is one of the bleakest new years that states have seen in over a decade.

On Wednesday, governors in California, Kentucky and New York kick off the season of addresses to state lawmakers as at least 36 states struggle to close budget shortfalls and also begin confronting the next fiscal year’s woes.

For many of the states, the new year spells the end to accounting maneuvers, one-off solutions, tax increases and service cuts that were as deep as lawmakers thought they could bear. And governors confront this situation in an election year in which dozens of their jobs are in play, and as many state legislators face their own election challenges.

. . . .

High unemployment, continued reverberations from the foreclosure crisis and a severe drop in all forms of taxes have combined to leave states — which historically have lagged behind the private sector in recession recoveries by about two years — reeling.

State tax collections for the third quarter of 2009 showed a drop of 10.7 percent, the third consecutive quarter of double-digit revenue decline, according to the Rockefeller Institute, though the dip was smaller than the preceding two quarters.

. . . .

Cost savings so far have included cuts to specific programs; Michigan and California both stopped offering dental services to some Medicaid recipients last year. But there have also been layoffs — Kentucky’s state work force has shrunk by 1,600 over the last two years — and symbolic moves, like Delaware’s decision last year to turn state-office thermostats down in the winter and up in the summer.

. . . .

States have also been forced to rethink how they do business, with examples like energy savings, new approaches to the management of prisons or the ways they manage gambling. Kentucky, for instance, wants video lottery terminals at race tracks.

“The good news is that there’s a target-rich environment for any states interested in new ideas,” said Robert B. Ward, the director of Fiscal Studies at the Rockefeller Institute, which is based in Albany.”

Which begs the question, why gamble on slots at the race tracks, if there are other alternatives that can be looked at, especially in light of the fact that at least one of the houses of the Kentucky Legislature steadfastly will not allow expanded gambling?

Does Gov. Beshear know something we don’t?  Or is there another reason?  Leave a comment with your thoughts.