First quarter showed zip, but experts fear drop
Friday, May 26, 2006
Jeannine Aversa
ASSOCIATED PRESS

WASHINGTON — The economy showed even more pep than initially thought in the first quarter, bounding ahead at a 5.3 percent pace. But a less energetic housing market and high energy prices now are taking out some of the oomph.

“I think we sort of had the last hurrah for the economy for a while,” said Nariman Behravesh, chief economist at Global Insight. “We aren’t going to see this kind of growth for a bit.”

The figure released by the Commerce Department yesterday showed gross domestic product during the first quarter surpassing the 4.8 percent annual rate estimated a month ago. It marked the strongest growth spurt in 2 1 /2 years. The upgrade mostly reflected stronger U.S. exports and better inventory building by businesses.

GDP, which measures the value of all goods and services produced within the United States, totaled $11.39 trillion in the first quarter when annualized and adjusted for inflation.

President Bush, coping with his lowest job-approval ratings, said the GDP report provides evidence that “America’s economy is on the fast track.”

Some more forward-looking barometers, though, suggest economic growth may be moderating.

The housing market, once a star economic performer, is losing some of its shine as mortgage rates march higher. Sales of previously owned homes fell 2 percent in April to a pace of 6.76 million units, the National Association of Realtors said in another report.

House prices posted the smallest increase in 4 1 /2 years. And, the total number of unsold homes climbed to a record high of 3.38 million units.

Economists predict economic growth in the April-to-June quarter probably slowed to a pace of about 3 percent to 3.5 percent, which would still be decent. The performance of the housing market and energy prices will play key roles in shaping the ultimate outcome.

Yesterday, Federal Reserve Chairman Ben Bernanke said the central bank can’t turn a blind eye to price changes for stocks and homes when setting interest rates but should take action only when they threaten the overall economy.

Bernanke suggested that the Fed shouldn’t try to identify and then prick speculative bubbles in home or stock prices that might develop.

There is little or no evidence that the Fed “is better able than the market to identify speculative bubbles and that it can successfully ‘deflate’ such bubbles without harming the broader economy,” he wrote in response to questions raised by Rep. Jim Saxton, R-N.J.

Thursday, May 11, 2006

Harley E. Rouda Jr.

After narrowing your search and visiting various homes, you’ve finally found the home you want. But before you can confidently purchase that next home, it’s important to have the property inspected by a professional. Home inspections are a necessary method to ensure you’re getting what you pay for, while also alerting you of any potential repairs you may need to make in the future.

When planning for an inspection, be sure to ask your real estate agent for advice since they’ve undoubtedly worked with a number of quality inspectors in the past. Once you have recommendations, be sure to do your own research before hiring anyone. Find out a potential inspector’s qualifications, obtain sample reports of their work and ask for references from previous clients. Because home inspections are unregulated in many states — including Ohio — you should also look for candidates who are members of the American Society of Home Inspectors (ASHI). Inspectors certified by the ASHI meet stringent requirements and abide by a strong code of ethics.

Once you’ve hired a home inspector, try to schedule your inspection at a time when you and your agent can be present. In general, a typical home inspection can last anywhere from two to four hours, depending on the size of the home. Be sure to ask questions or raise any concerns you may have. The more you know about your potential new home, the better.

After the inspection, expect a report outlining all possible problems within the home, from minor quick fixes to major repairs. Large-scale problems (heating, cooling, roofing or plumbing) can set you back between $2,000 and $5,000, medium repairs (insulation or painting flaws) can run between $500 and $2,000, while smaller issues (electric outlets or kitchen sink) will probably cost under $500. Keep all of these costs in mind when reviewing the overall price of the home. Be sure to have your real estate agent look over the inspector’s report and offer any additional input.

While the home inspection may not reveal problems that affect your decision to buy, you’ll be aware of any minor repairs you may need to make in the near future. But it’s also possible that the complexity of problems may leave you feeling unsure about the home purchase. If that’s the case, review all of the details with your real estate agent and determine if the property is the right choice for you. Realistically, you can expect at least a few minor fixes, but it’s up to you to decide how much maintenance you’re willing to put into your new home at the very beginning.