The shrinking dollar

In the Alice-through-the-rabbit-hole world of finance and investing, things aren’t always what they seem.

The U.S. dollar touched a one-year low compared to the euro Tuesday – making the European coin worth more than $1.48.

For many here in the states, that’s cause for celebration.

It’s also counter-intuitive. Wouldn’t we want our economy’s currency to always outvalue that of other nations?

Not if we’re sending goods to those other countries, or trying to lure their tourists and business investment here.

Here’s a primer from the Federal Reserve Bank of Chicago.

Even if you don’t cover Disneyworld or Las Vegas, or live in a state that’s trying to woo a foreign factory, you definitely can find some local industry – agriculture, manufacturing, pharmaceuticals, tourism, IT – that exports products or commodities and otherwise ebbs and flows with the fate of the greenback.

On the flip side, consumers planning to travel overseas – or send their children as foreign exchange students – really suffer when the dollar is weak. With the school year just underway, the plight of study-abroad programs would make a great personal finance piece.

Overseas interest in commercial and residential property is a story that’s ripe for the plucking in just about any market.

In 2008, an extremely weak dollar fostered news reports that overseas car makers like Volkswagen AG and BMW to build or expand U.S. factories, and to source more car parts here, to take advantage of the amped-up purchasing power.

Houses, cottages and vacation condos are more attractive to foreign buyers when the dollar is weak – a 2008 report by the National Association of Realtors claimed that 26 percent of its members had served an international client in the previous year.

Search for a Realtor with the NAR’s Certified International Property Specialist in your state or zip code and ask some of them about overseas interest in your region.

When it comes to the markets, our dollar tends to zig when other investments zag, and vice versa. That’s because traders use the U.S. greenback as a safe haven, much as we store cash in a piggy bank. When other investments –stocks, commodities, overseas currencies – start to appear worth the risk, the piggy bank is lightened in favor of those other buys.
Here’s a Radio Free Europe article that puts demand for the dollar in perspective.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Housing heads up

This week and next are heavy with residential housing reports, so if you haven’t done a home-price story lately, it’s a good time fire one up.

The key to avoid confounding yourself and readers is to use the data consistently, because a number of home price indices are released in rapid succession toward the end of each month.

On Tuesday, the Federal Housing Finance Agency monthly house price index is expected; this one is based on transactions underwritten by Fannie Mae and Freddie Mac and will reflect July prices. The FHFA site also offers downloadable data and a home-value calculator you may wish to offer as a link to readers.

And on Friday the U.S. Census Bureau’s new home sales report, which also includes price information, will be released to reflect August Data. That follows the existing home sales report by the National Association of Realtors, which comes out Thursday.

The Standard & Poor’s/ Case-Schiller Home Price Index, a somewhat broader measure, will be issued on Sept. 29.

Confused? You’re not alone. A caveat to working with this type of data is to look at the overall trends, not obsess over the absolute percentage gains and losses. Use the numbers to portray a general sense of where you local market is heading, but dig for anecdotes, specific dollar figures from actual home buyers, and other up-to-the-minute detail for your narrative.

This Bankrate.com article, meanwhile, is a helpful primer on the methodology behind the various home price indices along with caveats and tips.

And this Marketwatch.com piece from last week is a succinct roundup of the challenges some analysts think will depress home prices for years to come. Note the color-coded map depicting how long each state is expected to languish before a rebound; according to it, my territory won’t recover until 2023.

Break down a similar graphic for the cities, counties and neighborhoods in your region and readers will stampede to read it, clip it and clamp it to their refrigerators. In fact, you’ll just about be guaranteed “most e-mailed” status in the newsroom the day it runs.

If Moody’s Economy.com can’t provide to you the same level of detail it gave Marketwatch, perhaps your local Federal Reserve bank, a real estate economist at a local bank or an expert at the regional multi-listing service would give it a shot.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Digging into development

It’s not what you know, it’s whom you know.

And if there’s one single business beat that epitomizes that old saw, it’s the commercial development realm.

Stagnant strip malls, overbuilt office complexes, failed factories - they seem to be lurking everywhere. And they’re not just an aesthetic blight, they’re a constant reminder of moribund local economies.

Now – when things are quiet, to say the least – is a good time to pave your path into the commercial real estate beat. Don’t wait until development’s eventual rebound to start forging relationships in this fruitful arena.

A few gallons of coffee downed this fall over vacancy-rate chitchat can determine whether you have next year’s 1A scoop about a new Fortune 500 firm coming to town, or whether you hear about it on the radio en route to the office.

As with residential real estate stories, a good place to start is the National Association of Realtors. Their site’s commercial channel offers e-newsletter sign-up, Twitter sign-up and other resources for keeping tabs on overarching trends.

The NAR’s affiliate CommercialSource.com is a great tool for searching commercial listings by market, with links to a variety of other organizations and data providers.

On a regional scale, some of the Federal Reserve banks track commercial occupancy rates and trends; here’s a link to a previous tipsheet about how to find the FRB that oversees your territory. Some local listing services also do periodic analyses of commercial space; the commercial lending divisions of your hometown banks can give guidance there.

Better yet, get in your car and drive around. Those giant “For Lease” signs in key business districts, on landmark buildings and at stalled malls will give you quite a list of names and numbers with which to start.

Take it slow. People sitting on millions of square feet of costly, idle space don’t need us to rub it in. Set up a lunchtime backgrounder and ask about challenges unique to your market, key pending projects, what’s on hold, etc. Do this a few times and slowly but surely you’ll become attuned to the big plays in office and industrial real estate.

Bone up ahead of time by visiting the Web portal of Site Selection magazine, the bible of the real estate and development sector. In addition to timely analysis on topics ranging from public policy to real estate finance, Site Selection produces tools like annual state and market rankings that can add context and texture to your local reports.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Crafting Local Housing Stories

Get ready for another busy week on the residential real-estate front. A number of key statistics will be released over the next few days, giving you more news pegs for reports on the local housing scene.

Dollar signs are an irresistible draw for most readers, and there are plenty to be found in upcoming reports:

* On July 22, the Federal Housing Finance Authority its monthly Home Price Index. This one will reflect May 2009 sale prices for mortgages backed by Fannie Mae and Freddie Mac. Here’s an FAQ about the report and how it compares to other home-price indices. The monthly gains and/or declines in selling prices are presented regionally but the site offers quite a bit of historical data on a quarterly basis that's available for selected metropolitan markets.

Also Wednesday, the Mortgage Bankers Association weekly roundup of home-loan application data can provide some demand-side perspective as well as average interest rates and terms.

* On July 23, the National Association of Realtors posts its monthly Existing Home Sales report at 10 a.m. It shows the number of units sold, as well as home prices, also on a regional basis. Ancillary reports break out single-family dwellings, condos and other niches. While you await the report, here’s a look at the NAR’s historical data and methodology.

* Next week will bring another round of reports, including the U.S. Census Bureau’s new home sales report on July 27, reflecting May sales. It also includes sales prices and makes for an interesting – though not, of course, apples-to-apples – contrast to the NAR’s existing sales report. On Tuesday, more home price data arrives via the S&P/Case-Shiller Indices.

It’s helpful to be familiar with all of the above data and the methods used to obtain it. But really, the reports are just some of the building blocks for reporting on your local real estate scene. You need to get a narrative going and show how a stagnant market hinders mobility – that people who can’t sell their current houses can’t move to take another job, be closer to family, retire in Tennessee. Hit the classified ads and talk with the people behind the real-estate listings (keeping in mind that do-it-yourselfers may be more accessible than those represented by agents). Take note of “reduced” signs as you drive around – those marked-down prices represent someone’s nest egg or dream fund evaporating.

With all of the above elements in place, you can pull together a compelling home sales package. For the Web, consider video interviews or tours with stranded homeowners, or an interactive graphic mapping recent home sales and prices in selected communities. Your audience will be clicking for more.

Here are a few other residential real-estate resources you should bookmark:

* The Real Estate Center
* Real Estate Magazine
* Builder: the online trade journal for the construction industry

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

Prepping for the Home Builders' Forecast

Real-estate watchers are hoping for an upbeat omen Thursday when a trade group releases its monthly builder sentiment report, which showed an uptick in May but then dropped in June after hitting record-breaking lows over the winter and early spring.

Why should you and your audience care about a dry-as-a-bone industry index? The National Association of Home Builders polls its members about what level of demand they expect in the near future for new houses. The results of the survey – formally known as the NAHB/Wells Fargo Housing Market Index - are considered a harbinger for the overall residential real-estate market and the ripple outward toward consumers, lenders and suppliers – not to mention appliance dealers, furniture stores, painters and other businesses that serve home builders and buyers.

In short, most of us. Any story that addresses the precarious local housing scene and its effect on just about everyone’s fortunes will grip your readers’ attention. With a little digging, you’ll find myriad options for localizing and adding color to an otherwise abstract report.

First, visit the NAHB newsroom and sign up for their e-mail delivery, so you’ll get future releases automatically. Familiarize yourself with the methodology and historical results of the poll; you’ll notice the dramatic dip into single digits late in 2008 and early this year; a five-year look-back would make an eye-catching graphic, or you might just add a link to this chart with your story.

Then delve into the impact on your audience. On the NAHB site, locate the state-by state list of local builders’ associations. Click on the URLs for local sites and you'll get a member directory or search engine leading you not only to area builders but to industry trades and suppliers, from masonry experts to architects to electrical contractors. All of these small- and medium-sized businesses have a housing-related story to tell. And since most are privately owned, they’re not under the corporate constraints of large and publicly traded developers – meaning you're apt to get more candid comments and even access to workers, job sites and dynamic photo/video possibilities.

Layer those anecdotes with specific data - in prose or in graphic form - about housing permits issued in your region. County governments often can provide recent stats; otherwise check out the U.S. Census’ Building Permits report - which is current through May right down to the county level for many major U.S. markets.

The NAHB also has subsets of data you can tap for quirky angles, depending on your audience demographic. For example, the 55+Housing Market Index (55+HMI) measures developments aimed at mature buyers and retirees – helpful info if you’re in snowbird territory.

Another go-to residential real-estate resource you should bookmark: The National Association of Realtors; this trade-group site offers statistics, analysts and assistance with local contacts. They’ll be releasing their monthly existing home sales report on July 23.

It’s nearly impossible to overestimate your readers’ interest in home sales trends and real-estate values. In an era of dwindling equity, a tidal wave of foreclosures and a glut of new construction, the fallow housing market still is fertile ground for enterprising reporters.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.