TownSpeaks on Birthright Citizenship

Birthright Citizenship

One of the critical flash points of the 2016 Presidential Campaign is Birthright Citizenship where any child born in the US, no matter the citizenship status of the parent, automatically is born a US citizen. This has become a contentious point in the election. Some feel it is a valid argument and that it should be eliminated while others feel that this is a drafted component of the 14th amendment and, as a constitutional protection, that it should not be altered.

While it may appear impossible to resolve, both camps are right, but they are looking to the wrong source for correction. Birthright citizenship was originally designed to allow children born of legal immigrants the ability to become citizens automatically so that the government was not burdened with the need to naturalize all of the children born of immigrants in the country legally.




So the reasoning behind keeping birthright citizenship is valid and the mechanism should not be eliminated, but then how is the other camp right? Worst case scenario, the mechanism needs to only be altered to allow children of immigrants or visitors in this country legally, the ability to access birthright citizenship. We do not want to deter legal access to our great nation, but we also must be vigilant in controlling our borders.

A final aspect of birthright citizenship that deters us from eliminating it altogether is that the focus should not be on the mechanism, rather the source. If there are no illegal immigrants in the country to have children, then there is no need to delete birthright citizenship. Follow the logic and you find that it becomes moot when you control the source – illegal immigration. Additionally, the need to utilize birthright citizenship diminishes and usage reverts back to the intended purpose.

Joel Phillips

TownSpeaks Real Estate US Housing Supply and Demand

Economic Indicators

Courtesy of our friends at Trading Economics
The following economic indicators represent a snapshot of our economic health at any given point in time. Economists utilize varied economic indicators to track metrics such as GDP, Debt to GDP and more to determine not only where we are, but statistically where we are headed as the world's largest economy. If you would like to look at other economic indicators, please visit tradingeconomics.com.



One item worth note is that economic data in the past held fewer variables so it was, by its simplistic nature, more factual. When evaluating data today, you have to take into consideration the many variables that have been introduced to measure these economic indicators. The most prevalent example is the data on unemployment. Currently, values are not provided for underemployed and even those who have given up on looking for work and are not collecting unemployment. Adding these relevant statistics can often double the real numbers. What we are looking for in the data presented are trends in equal measurements, so take care when forming your opinion from these economic indicator snapshots.

United States GDP Growth Rate 1947-2015
The Gross Domestic Product (GDP) in the United States expanded an annualized 2.30 percent in the second quarter of 2015 over the previous quarter. First quarter GDP, previously reported to have contracted at a 0.2 percent pace, was revised up to show it rising at a 0.6 percent rate. GDP Growth Rate in the United States averaged 3.26 percent from 1947 until 2015, reaching an all time high of 16.90 percent in the first quarter of 1950 and a record low of -10 percent in the first quarter of 1958. GDP Growth Rate in the United States is reported by the U.S. Bureau of Economic Analysis. The United States has one of the most diversified and most technologically advanced economies in the world. Finance, insurance, real estate, rental, leasing, health care, social assistance, professional, business and educational services account for more than 40 percent of GDP. Retail and wholesale trade creates another 12 percent of the wealth. The government related services fuel 13 percent of GDP. Utilities, transportation and warehousing and information account for 10 percent of the GDP. Manufacturing, mining, and construction constitute 17 percent of the output. Agriculture accounts for only 1.5 percent of the GDP, yet due to use of advance technologies, the United States is a net exporter of food. This page provides the latest reported value for - United States GDP Growth Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.


source: tradingeconomics.com

Interest Rates
The Federal Reserve left its target range for the fed funds rate at 0 to 0.25 percent on July 29th, 2015. “The labor market continued to improve, with solid job gains and declining unemployment,” and “The housing sector has shown additional improvement” the Federal Open Market Committee said in a statement. The Fed will tighten policy when it sees “some further improvement in the labor market,” and is “reasonably confident” inflation will move back to its 2 percent goal over the medium term. Interest Rate in the United States averaged 5.95 percent from 1971 until 2015, reaching an all time high of 20 percent in March of 1980 and a record low of 0.25 percent in December of 2008. Interest Rate in the United States is reported by the Federal Reserve. In the United States, the authority for interest rate decisions is divided between the Board of Governors of the Federal Reserve (Board) and the Federal Open Market Committee (FOMC). The Board decides on changes in discount rates after recommendations submitted by one or more of the regional Federal Reserve Banks. The FOMC decides on open market operations, including the desired levels of central bank money or the desired federal funds market rate. This page provides the latest reported value for - United States Fed Funds Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.


source: tradingeconomics.com

United States Inflation Rate 1914-2015
The inflation rate in the United States was recorded at 0.10 percent in June of 2015. Inflation Rate in the United States averaged 3.32 percent from 1914 until 2015, reaching an all time high of 23.70 percent in June of 1920 and a record low of -15.80 percent in June of 1921. Inflation Rate in the United States is reported by the U.S. Bureau of Labor Statistics. In the United States, unadjusted Consumer Price Index for All Urban Consumers is based on the prices of a market basket of: food (14 percent of total weight), energy (9.3 percent), commodities less food and energy commodities (19.4 percent) and services less energy services (57.3 percent). The last category is divided by: shelter (32.1 percent), medical care services (5.8 percent) and transportation services (5.5 percent). This page provides - United States Inflation Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.


source: tradingeconomics.com

United States Unemployment Rate 1948-2015
Unemployment Rate in the United States remained unchanged at 5.30 percent in July from 5.30 percent in June of 2015. Unemployment Rate in the United States averaged 5.83 percent from 1948 until 2015, reaching an all time high of 10.80 percent in November of 1982 and a record low of 2.50 percent in May of 1953. Unemployment Rate in the United States is reported by the U.S. Bureau of Labor Statistics. In the United States, the unemployment rate measures the number of people actively looking for a job as a percentage of the labor force. This page provides the latest reported value for - United States Unemployment Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.


source: tradingeconomics.com

United States Government Debt to GDP 1940-2015
The United States recorded a Government Debt to GDP of 101.53 percent of the country's Gross Domestic Product in 2013. Government Debt to GDP in the United States averaged 60.81 percent from 1940 until 2013, reaching an all time high of 121.70 percent in 1946 and a record low of 31.70 percent in 1974. Government Debt to GDP in the United States is reported by the U.S. Bureau of Public Debt. Generally, Government debt as a percent of GDP is used by investors to measure a country ability to make future payments on its debt, thus affecting the country borrowing costs and government bond yields. This page provides - United States Government Debt To GDP - actual values, historical data, forecast, chart, statistics, economic calendar and news.


source: tradingeconomics.com

United States Balance of Trade 1950-2015
The United States recorded a trade deficit of 43840 USD Million in June of 2015. Balance of Trade in the United States averaged -12987.51 USD Million from 1950 until 2015, reaching an all time high of 1946 USD Million in June of 1975 and a record low of -67823 USD Million in August of 2006. Balance of Trade in the United States is reported by the U.S. Census Bureau. The United States has been running consistent trade deficits since 1976 due to high imports of oil and consumer products. In recent years, the biggest trade deficits were recorded with China, Japan, Germany and Mexico. United States records trade surpluses with Hong Kong, Netherlands, United Arab Emirates and Australia. This page provides the latest reported value for - United States Balance of Trade - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.


source: tradingeconomics.com

TownSpeaks Real Estate Indicators

Residential and Commercial Real Estate Indicators

Residential and Commercial Real Estate Indicators of Economic Health

Utilizing real estate trends to understand the economy is no secret. Given the size and scope of the real estate industry, there is little doubt that a fundamental shift in real estate pricing and sales statistics can reasonably communicate the direction markets and economic health are headed.

Housing starts directly impact home sales, construction jobs and real estate related employment are key metrics used by many economy experts, but there is a great deal more to the picture as we look at how we can use residential and commercial real estate indicators to measure economic health. In fact, we can use residential and commercial real estate indicators to project or predict economic events or shifts in fundamental investment strategies.




Commercial construction and sales are possibly even better predictors of where we are headed financially and, at a minimum, you need to look at a holistic view of the real estate industry. Historically, standard commercial is a trailing indicator following the residential market. As a general rule, commercial follows residential by about 2 years. This isn't quite the crystal ball surprise you were looking for, so let's dig in a little deeper.

Opening an office or expanding offices is a result of how businesses are performing over time. Perform well and the business grows to the point where it expands beyond existing capacity. Through difficult financial times, companies will fire and layoff. These trends, while slower in the commercial arena, almost immediately impact employment and housing which carries much higher volatility.

Businesses are simply more stable and smooth transitioning by their very nature. Commercial real estate is less immediate due to the slower, wider nature of business cash flow versus personal cash flow. So when we see residential real estate go up or down, there is a fairly strong likelihood that commercial will follow in the same direction. By the same token, if we see commercial real estate expand, then we have to factor in the 2 years prior where the market was already in the process of changing.

Once we understand the nature of this complex cycle, then it is relatively straightforward to identify where we are from an economic outlook standpoint. Add to this the historical approximation of a ten-year top-to-top / bottom-to-bottom cyclical pattern and we get a pretty good idea of the economic landscape. It is worth noting however, that current economic and political conditions have greatly destabilized our cyclical patterns to the point where they are less recognizable, but the patterns still remain. To find out why is outside the scope of this article, but we cover it in the newsletter so signup now.

So standard commercial overlaps residential. Another commercial segment is multi-family consisting of 5 units or more per building. This tells us a similar but different story. Apartments fall into the commercial category because they represent rental rather than purchase. If we factor this rental component in with the overall commercial and residential models, we not get a 360 degree view of our economy all wrapped up in the housing market.

Given that we have a relatively predictable model in the real estate industry, we can surmise that the extrapolation of data is relevant and significant enough in weight to apply with confidence as a projection of economic condition. Loosely translated, this means that not only can you use a real estate model as a gauge of economic condition, you can use it as a tool for prognosticating the real estate market itself to determine investment direction and depth.