Camelot Investment Committee Talking Points

“To improve is to change; to be perfect is to change often.” -Winston Churchill

US Housing Hotspots

The housing market in the past decade has rebounded in a number of major metropolitan cities. The prices of new and existing homes in San Francisco, Seattle, Portland, Denver, and Dallas are starting to raise above pre-2008 collapse levels. Currently, these cities are starting to exhibit inflated prices compared to other markets. Although it is easy to say these areas have favorable growth opportunities, housing in Midwest and Eastern cities have not recovered to pre-2008 pricing levels. In Chicago and Minneapolis real prices using CPI shows home valuation is close to 1980 home values, and housing in hotspots is considerably higher in real value. 

On the renting side, many metropolitan markets show favorable conditions for landlords. In US hotspots, house to rent ratio is converging towards the long run average. In non-hotspot cities, the ratio for house to rent is still lower than the long run average. Prior to 2008, conditions for landlords were unfavorable, but time has helped new/existing landlords see improved rental returns relative to the value of housing. 

Productivity and Service Growth Slowdown

Last week, the Department of Labor and the Institute for Supply Management released statistics related to productivity and service sectors growth. Productivity is measured as the output of goods and services per hour worked (Economics). The United States has seen a decline in productivity over the last three quarters. Although it’s quite uncommon to see 3 consecutive quarters of lower productivity, the US productivity is relatively higher compared to other developed economies. 

The Purchasing Manufactures Index fell to 51.4% in August from 55.5% in July. This 4.1% point drop shows a slowing in order activity. This drop marks the lowest growth over the past six and a half years (Economics). These two indicators are pointing at an overall slowdown in the economy, and hopefully, this downward trend will reverse for the second half of 2016.

Compiled by the Camelot Portfolios Investment Committee

Darren Munn, CFA, Chief Investment Officer

Sarah Berndt, Portfolio Manager

Eric Kartman, Research

Drew Steinman, CPA, Trader/Research

Frank Echelmeyer, MBA, CKA®, Advisor Consultant

-for Broker/Dealer and RIA use only-


Economics, Trading. US Nonfarm Labor Productivity . 2016. American house prices: Realty check. 2016.



The materials presented is for use by professional advisors only.  It is not intended as informational and educational, and is not intended to be interpreted as investment advice.  The references to specific investment ideas, be they concepts, trends, sectors or even specific securities, are not recommendations for any advisor to adopt for any of their clients.  No investor or client reading these materials should view them as investment advice.  These materials are to be utilized as a catalyst for thought and discussion regarding the economy, investments, and responsible investing in general.  Past performance is not necessarily indicative of future returns, and there is no guarantee that any information presented herein will contribute to a profitable portfolio.  All facts referenced herein are derived from sources believed to be reliable.  

Any charts, graphs, or visual aids presented herein are intended to demonstrate concepts more fully discussed in the text of this brochure, and which cannot be fully explained without the assistance of a professional from Camelot Portfolios LLC.  Readers should not in any way interpret these visual aids as a device with which to ascertain investment decisions or an investment approach.  Only your professional adviser should interpret this information. A265