Today, WALL STREET 24/7 again heralded Virginia Beach as one of the best cities to raise children. We have high marks in so many categories and remain insulated in our economy because of our strong military presence in our Hampton Roads 5 city market. The only city in USA where the Atlantic Ocean meets the Chesapeake Bay at the wonderous Chesapeake Bay Bridge Tunnel. A great city to visit and an even better city to consider as your new home!
January 09, 2012 – Market Recap
10
Jan
 |
| We’ve said that strong job growth will be key to a successful 2012. Early signs are encouraging. Automatic Data Processing (ADP) reports that private payroll numbers surged 325,000 in December – more than double expectations for a 160,000 increase.
The news on jobs is definitely good, but it’s important to keep expectations tempered. This time last year, ADP reported that private employment jobs increased by 297,000. That bullish number got more than a few economists and pundits thumping for a full-bore recovery. Unfortunately, job growth abated and practically stagnated through the summer months of 2011. That said, we remain encouraged. The Bureau of Labor Statistics (BLS) reports that unemployment is, for the most part, dropping across the nation. The BLS’s data show that 58 metropolitan areas reported jobless rates above 10 percent, but that’s down from 112 a year earlier. Another 129 areas reported jobless rates below 7 percent, nearly double the 65 areas reported in November 2010. So it appears employment is on the rise, which bodes well for improved home sales in 2012. Prices are another reason we should see more sales. Standard & Poor’s data show current home prices when adjusted for inflation are at 2001 levels. In other words, homes are very affordable. When homes are very affordable, more homes will be sold and more markets will clear. We’ve provided many examples of markets clearing over the past few months. Beleaguered Las Vegas is the latest example. DataQuick reports that home sales increased 11.2 percent year-over-year in November, with sales being driven by below-$200,000 homes. Prices are low in Las Vegas , to be sure, but the days of free-fall depreciation appear to have ended, with the median home price holding at $115,000 for three consecutive months. Mortgage rates contribute to the affordability quotient. On that front, mortgages remain very affordable. In fact, over the past week the 30-year fixed-rate loan again touched a new low. This should come as no surprise when you see that the 10-year U.S. Treasury note also touched a new low, with its yield dipping below 1.9 percent. Rates remain low thanks to the ongoing debt crisis in Europe , which continues to draw money to U.S. Treasury securities even though these securities don’t yield enough to compensate for inflation. That’s good news for borrowers, especially borrowers on the longer end of the spectrum – such as those seeking 30- or 15-year fixed-rate loans. Is it worth waiting for even lower rates? We didn’t expect to see sub 4-percent loans in 2011, so anything is possible. But you have to consider what’s probable. With job growth accelerating and consumer confidence rising, it appears the economy is growing sufficiently to suggest any further rate drops will be measured in a few basis points. At this point, it’s really all about risk and reward. Today, the reward is very high, but we think the risk will likely rise with more evidence of improving economic growth. |
|
Economic
Indicator |
Release
Date and Time |
Consensus
Estimate |
Analysis
|
| Consumer Credit (November) |
Mon., Jan. 9, 3:00 pm , et |
$7 Billion (Increase) |
Important. Increased use of non-revolving credit reflects increased strength in sales of big-ticket items.
|
| Wholesale Inventories (November) |
Tues., Jan. 10, 10:00 am, et |
1% (Increase) |
Moderately Important. Increasing sales and inventory levels point to stronger economic growth.
|
| Mortgage Applications | Wed., Jan. 11, 7:00 am, et |
None |
Important. Overall mortgage activity continues to trend higher.
|
| Retail Sales (December) |
Thurs., Jan. 12, 8:30 am , et |
0.2% (Increase) |
Important. Most components continue to advance, which reflects a pick up in economic growth.
|
| Import Prices (December) |
Fri., Jan. 13, 8:30 am , et |
0.5% (Increase) |
Important. The rise in import prices is indicative of rising consumer-price inflation.
|
| Consumer Sentiment (January) |
Fri., Jan. 13, 9:55 am , et |
71 Index |
Important. Job growth continues to drive consumer sentiment higher.
|
| The One Fly in the Ointment
Housing is still dealing with some difficult issues – namely shadow inventory and negative equity. The former has shown much improvement based on data released during the last quarter of 2011; the latter will be helped by HARP 2.0, which is expected to be fully engaged by March. The good news is economic and job growth will continue to remove rot from the system; that is, if buyers and borrowers are sufficiently motivated to act. Unfortunately, we see too few buyers and borrowers sufficiently motivated. The one question we field most often these days is, “Are mortgage rates going lower?” Embedded in the question is the belief that rates are going lower, which keeps too many people on the sidelines. Our wish list for this year includes a stronger economy, more jobs, and more confident consumers. We’d also like to see a ratcheting up of interest rates. That way, borrowers prone to procrastination will be less prone to procrastinate when they realize that any uptick in rates won’t be followed by two downticks. What’s more, rising rates will be indicative of the sustained economic growth we all want. |
Virginia Beach named Best-Run City In America; Chesapeake ranked 6th
10
Jan
On January 5, 2012, the City of Virginia Beach was named as America’s best-run city by 24/7 Wall St., a financial news website. The ranking was based on economic and social factors such as unemployment level, poverty rate, and violent crime. The City of Chesapeake also made the top 10 best-run cities, coming in 6th.
Virginia Beach has once again displayed that it is one of the best cities in the country both economically and socially. The city’s excellent financial management through factors such as “a large and diverse tax base stabilized by the presence of military bases, a strong and carefully managed financial position, and comprehensive financial policies and a conservative budgeting approach” earned it the top spot. It was also ranked in the top 10 in categories such as low violent crime and unemployment, and high median income and high school graduation rates.
24/7 Wall St. cited Chesapeake as having the 2nd lowest poverty rate in the nation as well as placing in the top 20 cities in both violent crime rates and high school graduation levels. Vast employment options in both Chesapeake and Virginia Beach are also attributed to the city’s successfully run government.
Delegate Villanueva stated: “I send my greatest congratulations to the cities of Virginia Beach and Chesapeake for their respective placement as the 1st and 6th best run cities in America by 24/7 Wall St. I am proud to represent a
district such as the 21st that is governed by qualified and caring public servants. As a former member of the Virginia Beach city council, I greatly appreciate and commend the hard work and dedication displayed by the Virginia Beach city officials and Chesapeake city officials.”
To see the complete article, please visit 24/7 Wall St.
November 14, 2011 – Market Recap
14
Nov
| Keeping you updated on the market! For the week of November 14, 2011 |
| MARKET RECAP
If we were to survey the landscape to see if people rate the decline in housing prices as either a curse or a blessing, we are sure most would say curse. After all, most homeowners have suffered a loss of equity over the past five years. However, there is an upside to the decline in home prices, particularly for first-time homebuyers and owners looking to trade up, and that’s affordability. According to financial data provider Fiserv, the monthly mortgage payment for a median-priced single-family home is 40 percent cheaper than it was five years ago, falling to $700 from $1,140. Lower prices are really the only way to remedy a supply glut. Watching an asset’s price fall is unpleasant, to be sure, but prices fall only so far and the glut clears, and then prices generally rise. For example, Miami was one of the most overbuilt metropolitan regions and suffered serious price deflation. But the glut in Miami appears to have cleared, thanks to lower prices stimulating more demand. In the third quarter of 2011, Miami home sales jumped 51 percent from a year ago. What’s more, prices are again on the rise: the average sales price in Miami for a single-family home has risen 19 percent year-over-year. It is more informative to focus on local numbers than it is to focus on national numbers. The National Association of Realtors reports that the national median single-family home price slipped 4.7 percent year-over-year to $169,500 in the third quarter. That said, the NAR’s national median price really doesn’t mean much to any specific local market. The bottom line for us is that we’ve seen enough evidence of markets clearing to suggest more markets will resemble Miami in 2012. Fiserv, though expecting some price weakness over the next few months, expects most major markets to post significant price gains in the second half of 2012. What will financing rates look like in 2012? We thought mortgage rates would be higher this year than in 2010; that hasn’t been the case. The Federal Reserve has plainly stated that it is buying long-term securities in order to hold long-term borrowing rates low. It can be silly to fight the Fed. Then again, markets can be potent forces. Consider this past week: news that another Mediterranean country, Italy , is close to insolvency did little to move interest rates or mortgage rates. In other words, investors weren’t rushing into U.S. Treasury securities. In fact, Treasury rates and mortgage rates held steady for the week. When the Greek crisis occurred, Treasury rates and mortgage rates dropped perceptibly. The fact mortgage rates hardly moved with the latest crisis suggests markets might be less willing to accept ultra-low rates in exchange for a haven from risk. |
| Economic Indicator |
Release Date and Time |
Consensus Estimate |
Analysis |
| Producer Price Index (October) |
Tues., Nov. 15, 8:30 am, et |
All Goods: 0.2% (Decrease) Core: No Change |
Important. Underlying producer price inflation is easing but remains at elevated levels. |
| Retail Sales (October) |
Tues., Nov. 15, 8:30 am , et | No Change | Important. The long-term sales trend suggests consumers are more optimistic than confidence measures state. |
| Mortgage Applications | Wed., Nov. 16, 7:00 am, et |
None | Important. Purchase activity continues to post steady (and encouraging) gains. |
| Consumer Price Index (October) |
Wed., Nov. 16, 8:30 am, et |
All Goods: 0.1% (Decrease) Core: No Change |
Important. A decrease in CPI will relieve pressure for interest rates to rise. |
| Home Builder Index (November) |
Wed., Nov. 16, 10:00 am, et |
18 Index | Important. Gains in homebuilder stocks point to growing builder confidence. |
| Housing Starts (October) |
Thurs., Nov 17, 8:30 am, et |
605,000 (Annualized) | Important. More regions are experiencing a rising level of starts. |
| Learn from the Past, But Focus on the Future
This is advice we try to pass onto our clients. It’s important to learn from the past, but it’s just as important to focus on the future. What we’ve learned from the past is to avoid an asset whose short-term growth rate has far exceeded its historical average annual growth rate. That’s not what we have today with housing. We have an asset class – residential real estate – that has reverted to historical norms and is priced to appreciate going forward. This is a difficult concept for many people to accept. We naturally anchor to the recent past, but doing so can mislead. In 2006, many people thought home prices could only go up; in 2011, many people think home prices can only go down. What we can learn from the past is that trends don’t last forever. Buying assets people are selling, and selling assets people are buying, can be very profitable. We’ve been saying for the past year that residential real estate is priced to be profitable. Our belief hasn’t changed, which is why we continue to say real estate financed with a mortgage loan will be one of the better performing assets over the next decade. |
America’s 10 Best Places to Grow Up
13
Nov
America’s 10 Best Places to Grow Up
Low crime, strong schools, green spaces, and fun activities are key ingredients for a happy childhood
By LUKE MULLINS
August 19, 2009
If you could create the ideal community to raise a child in, what ingredients would you include? First off, you’d probably want a low crime rate. A strong school system would also be key. From there, you’d need lots of other children, expansive green spaces to play in, and plenty of nearby family events. Toss in an abundance of artistic and recreational activities, and all of a sudden you’ve got one heck of a place to grow up. At U.S. News, we wanted to find out if any communities like that already existed—and if so, where they were located. So we dug into our database of 2,000 different places all across the country and pinpointed the locales that met these criteria. We then examined these communities more closely to determine which places offered the best combination of safe neighborhoods, fun activities, and top-notch educators. Our selections appear below, in our list of America’s 10 Best Places to Grow Up:
Virginia Beach, Va.: Junior adventurers will love Virginia Beach, Va. This community of 434,000 residents in the southeastern part of the state has a low crime rate, a solid school system, and 35 miles of majestic beaches on the Atlantic Ocean and the Chesapeake Bay. “It’s kind of neat to be able to come home from work, make a call to my wife or son, grab a bucket of chicken or some sandwiches, and then go out on the bay and have dinner,” says Greg Ward, who works for a marketing firm that represents the Virginia Beach Convention and Visitors Bureau.
Children can explore an impressive ecosystem of threatened and endangered species—including bald eagles and loggerhead sea turtles—in the 9,000-acre Back Bay National Wildlife Refuge. The warm summers and mild winters provide plenty of opportunities to hike, bike, and picnic your way through the 19 miles of scenic trails over at First Landing State Park. And after checking out the sand tiger sharks and the cow-nose rays at the Virginia Aquarium and Marine Science Center, children can catch an educational picture in its 3-D IMAX theater.
[Slide Show: America's 10 Best Places to Grow Up.]
And in early September, the community is launching an online resource—VBparents.com—designed to keep parents plugged in to local health and school news, while ensuring that they are up-to-date on all of the community activities available to their kids. “There are lots of great parenting resources out there. This one is going to be specific to raising your child and your family within the city of Virginia Beach,” says Jenefer Snyder, city of Virginia Beach GrowSmart coordinator. “We are constantly going to be connecting it back to community services, activities, events, programs, and classes.”
Madison, Ala.: Of the roughly 43,000 residents in the friendly, churchgoing town of Madison, Ala., about 12,000 are under 18 years old. And this bedroom community of Huntsville, Ala., offers no shortage of outlets to keep these young folks active. “There is an event almost every weekend—whether it is in Madison, Huntsville, or Madison County—that families can attend,” says Paul Finley, the mayor of Madison. Children can take advantage of the area’s expansive outdoor amenities: watching beavers plunge into Bradford Creek or rabbits dart through the 130-acre Rainbow Mountain Trails park. And if they behave well enough, perhaps some lucky children can even persuade their mom and dad to send them to Space Camp at the U.S. Space and Rocket Center in nearby Huntsville.
San Jose, Calif.: With 9 square miles of green spaces, 300 days of sunshine a year, and four different professional sports franchises to follow, San Jose, Calif., has everything you need for a happy childhood. At just over 1 million residents, San Jose considers itself the capital of Silicon Valley, but it doesn’t take a computer scientist to understand the city’s appeal to kids. San Jose is the country’s safest big city, and although it’s certainly expensive—the median home price is $449,000—the city offers all sorts of great activities for children. Rather than chasing its skateboarders away, San Jose has embraced them by opening six public skateboarding parks, including Lake Cunningham Regional Skate Park, the largest one in the state. And at the Children’s Discovery Museum of San Jose, children can experience everything from theater to gardening.
Overland Park, Kan.: Just 12 miles outside of Kansas City, Mo., is the lovely community of Overland Park, Kan. This family-friendly suburb in America’s heartland has a four-season climate and is opening a 12-field, artificially turfed, fully lit soccer complex in the late summer. “Soccer is a big sport in this community,” says Mayor Carl Gerlach. Meanwhile, at the Deanna Rose Children’s Farmstead, kids can visit nearly 200 farm animals, toss a bobber into a fishing pond, or take a ride in a horse-drawn wagon. The 17-mile-long Indian Creek Trail makes for a great bike ride. At the same time, sports fans are only a short car ride away from a Kansas City Chiefs football game or a Kansas City Royals baseball game. In addition, “we have three different school districts in Overland Park,” Gerlach says. “All three have been nationally ranked and won awards.”
Boston: With an exciting history and a boatload of activities, Boston is a great option for parents looking to raise children in a big city. Kids will marvel at the African penguins in the New England Aquarium, gawk at the humpback whales on a whale-watching tour, and erupt as the Red Sox take the field at beautiful Fenway Park. At the same time, Boston is one of the safest large cities in the country.
Denver: Whether they prefer snowboarding in the Rocky Mountains, biking through America’s largest city park system, or heading over to Invesco Field at Mile High for a Broncos football game, Denver is a wonderful place to be a kid. Also among the country’s safest big cities, Denver has 300 days of annual sunshine, eight different professional sports franchises, and countless opportunities for fishing, white-water rafting, and horseback riding.
Rochester, Minn.: With about 100,000 residents, the safe, friendly city of Rochester, Minn., has enough activities to tire out even the most energetic youngsters: 85 miles of trails for in-line skating, 3,200 acres of public parks for touch football, and 56 different playgrounds. “It’s a huge sports town,” says Brad Jones, executive director of the Rochester Convention and Visitors Bureau. Fortunately, the area’s big sport—hockey—is well-suited for Rochester’s chilly winters. “We [also] have two hockey complexes, one with four rinks under one roof and the other with two,” Jones says. “We have the National Volleyball Center located here, and it’s always hopping with volleyball tournaments and trainings.”
Cedar Rapids, Iowa: It would be tough to find a safer community than Cedar Rapids, Iowa, where the crime index is about a fifth of the national average. And with a solid school system, plenty of fun activities, and affordable housing costs, this eastern Iowa city can keep your kids happy without emptying your wallet. Tim Boyle, the executive director of the Cedar Rapids Area Convention and Visitors Bureau, says the city’s manageable size—it has just 123,000 residents—allows its young people to get involved in a variety of different activities. “The thing that I like about Cedar Rapids is you could end up with a junior or senior in high school who is an offensive tackle on the football team and has the lead in the spring musical,” Boyle says. In addition to a strong music program in its public schools, the area has more than 50 public tennis courts, more than 75 parks, 23 sand volleyball courts, and even a BMX dirt track. During the winters, which can get extremely cold, children can remain active on three indoor soccer fields and five ice-skating rinks.
Plano, Texas: With 7,000 faculty and staff members serving 55,000 students in this Texas community, the Plano Independent School District has achieved national recognition for its strength. The Department of Education has handed 24 of its schools National Blue Ribbon Schools of Excellence awards, and 99 of its seniors were named semifinalists in the 2008 National Merit Scholarship Program. “We have a wonderful park system here in our community that has always been very much focused on youth sports, whether it is soccer or baseball or basketball,” says Mayor Phil Dyer. Meanwhile, the community’s less costly lifestyle—median home prices are just $213,900—means there should be enough cash left in the budget for the 50-minute trip to Arlington, Texas, for a Dallas Cowboys game.
Edison, N.J.: Working parents in Edison, N.J., can take advantage of the township’s expansive after-school programs, which expose youngsters to a host of activities, including magic, piano, cooking, and arts and crafts. More than 30 area parks have facilities for tennis, basketball, soccer, and other sports. At the same time, this community of about 100,000 also offers organized youth leagues for everything from softball to lacrosse.
Here’s our list of America’s 10 Best Places to Grow Up:
Homeowners in Denial About Value of Properties
08
Sep
Homeowners in Denial About Value of Properties
The New York Times
ANN CARRNS
Homeowners, especially those who bought their houses after the real-estate bubble burst, are still having trouble accepting just how much the values of their properties may have fallen, says a new report from the real-estate site Zillow.
Current sellers who bought their homes in 2007 or later, an analysis of the site’s home listings shows, are overpricing their properties by an average of 14 percent.
Sellers who bought their houses before the bubble, and those who bought during the big run-up in home values, also are overpricing their homes, but not by as much. Those who bought before 2002 are pricing their homes roughly 12 percent over market value, while those who bought from 2002-06 price them about 9 percent over market value.
In the analysis, Zillow compared the asking price of one million homes for sale to the homes’ previous purchase price, then factored in the change in the Zillow Home Value Index for the respective ZIP code, to determine an estimate of that home’s current market value.
Stan Humphries, Zillow’s chief economist, says those who bought post-bubble, in 2008, 2009 or later, seem to think they escaped the worse of the housing market debacle and tend to price their homes too high as a result. But 2006 was just the start of the housing recession, which continues today; home values are now down nearly 30 percent from the market’s peak. And, values have fallen about 12 percent from January 2009 through May of this year, he says.
That means, he says, that even people who bought after the bubble burst need to take a hard look at what has happened in their local market since they bought their home. Traditionally, people tend to overprice their homes a bit anyway, to allow room for negotiation. But unrealistic overpricing in the current environment, he says, means properties stagnate.
Sellers, he said, need primarily to consider comparable sales and asking prices in their market when setting an asking price for their home. Factoring in what they paid for their home, or how much they owe on their mortgage, “leads to conclusions that are divorced from the outside market,” he said, and the market determines whether a buyer is interested in your house: “The buyer doesn’t care what you paid or what your mortgage is.”
Of course, some sellers who owe more than their house is worth are limited in how low they can price their home because selling for less than their mortgage means they’ll have to negotiate a short-sale with their bank. “They’re hoping against hope that they can sell at a higher price,” Mr. Humphries said.
But others are simply faced with a reluctance — understandable, to be sure — to sell the house for less than they paid. “They could price more aggressively, but there’s a psychological hurdle,” he says. “They don’t want to realize a loss.”
Humphries foresees home values continuing to fall through the middle of next year for a variety of reasons, including persistent unemployment, a significant pipeline of homes in foreclosure, as well as high rates of homes with negative equity, which means many more will likely end up in foreclosure. A return to a “normal” market is likely at least three years away, he says.
Is your home on the market? What factors went into your asking price?
July 11, 2011 – Market Recap
15
Jul
Keeping you updated on the market!
|
MARKET RECAPThe past week was slow on housing news, which is understandable given the Independence Day weekend. Mortgage rates moved slightly higher, and it’s possible they could start trending higher through the month. One reason is hiring, which is on the rebound. ADP’s National Employment Report showed that private sector employment rose to 157,000 new jobs in June, nearly triple May’s rate and well-ahead of the consensus estimate of 68,000 from Reuters. June’s employment figures suggest the economic recovery, which slipped in the spring, has found new traction. New traction, in turn, could pressure interest rates to move higher. Real estate research firm DataQuick reported that sales of existing homes in Phoenix reached a six-year high of 9,837 in May. This regional piece of housing news is important for the economics lesson it imparts. We’ve noted many times in the recent past that lower prices stimulate sales and are the most efficient, most expedient means of clearing high inventory. The Phoenix market is proving that to be true. DataQuick also reported that 40 percent of the Phoenix sales were for homes less than $100,000, which is a 40 percent increase from year-ago sales. The median price of a home in Phoenix stayed consistent at $120,000, which is actually a good sign: increased demand is causing more distressed inventory to hit the market that needs to be cleared. With both supply and demand increasing, prices are likely to hold steady going forward. Once the excess supply is absorbed, prices can then start moving higher. Many of the homes sold in Phoenix were investment rental property. This makes sense; many people are still shut out from the mortgage market due to either bad credit or insufficient down payment. This is producing a renaissance in rental properties. The Wall Street Journal reports that the average nationwide rate for apartments and home rentals is up 6.7 percent year-over-year. Rent increases for studio apartments and five-bedroom homes were particularly vigorous, rising 14.3 percent and 12.1 percent, respectively. Rent.com expects even more rent hikes this year. This upward price trend in rents suggests to us that buying an owner-occupied home will become a more viable option over the next couple of years. Here, again, is another economics lesson: as investors buy rental properties because of rising rents, they also stimulate interest in more potential homebuyers who are renting. This is one reason we are bullish on the long-term outlook for housing. |
| Economic Indicator |
Release Date and Time |
Consensus Estimate |
Analysis |
| International Trade (May) |
Tues. July 12, 8:30 am, et |
$44.3 Billion (Deficit) | Moderately Important. Falling petroleum prices are shrinking the deficit. |
| Mortgage Applications | Wed., July 13, 7:00 am, et |
None | Important. Higher purchase activity reflects a rise in home sales. |
| Producer Price Index (June) |
Thurs., July 14, 8:30 am, et |
All Goods: 0.4% (Decrease) Core: 0.2% (Increase) |
Important. Falling energy prices have slowed producer-price increases, but inflation remains a concern. |
| Retail Sales (June) |
Thurs., July 14, 8:30 am, et |
0.4% (Decrease) |
Moderately Important. Sales are easing on fewer big-ticket purchases and falling gasoline prices. |
| Consumer Price Index (June) |
Fri., July 15, 8:30 am, et |
All Goods: 0.1% (Decrease) Core: 0.2% (Increase) |
Important. Consumer-price inflation remains elevated, so an unexpected rise could send interest rates higher. |
| Industrial Production (June) |
Fri., July 15, 9:15 am, et |
0.7% (Increase) |
Moderately Important. Capacity utilization continues to increase, suggesting strong business-sector growth. |
| Time to Remove the Monkey Wrench from the Gears
Trouble financing a home purchase is the one variable that could derail our prediction of a housing recovery. Bloomberg News recently ran a compelling article that encapsulates our most frequent lament: we need more liberal and subjective underwriting standards to get more buyers into homes. Bloomberg writes, “While a record share of Americans want to buy homes, U.S. policies [on banking and lending], often working at cross-purposes, are making it more difficult.” We’ve been saying for months now that the market has gone too far in the direction of excessively high standards. Security-filings data provided by Fannie Mae show that nine of 10 mortgages it bought in the first quarter of 2011 were for borrowers with credit scores higher than 700, a 32 percent increase in the percentage of these higher-score loans. Meanwhile, the average credit score for FHA loans was 701 in April, up from 669 three years earlier. There is a disconnect at work. People, a lot of people in fact, still want a home. In May, a record 5.5 percent of Americans said they wanted to purchase a home, according to the Conference Board, a New York research firm. This is frustrating, especially when considering we have the expertise and experience to price risk, but many people don’t want to apply for a loan because they believe it is a waste of time. It’s no a waste of time; we want to speak with anyone interested in a purchase or refinance loan. However, if there was a cause that we could all get behind, it is loosening up the lending purse strings and getting more people mortgages who are worth the risk and can afford it. |
Tips for staging your house
15
May
As you stage your home when it is vacant, select one area in either the kitchen or dining room to set a table for two. In this case, some of the shells and stones were scented with a fresh, clean fragrance and tied in with the glass light fixture above and the green glass bowl on the table top. Submit your photos for a challenging room in your home for some free advice on how to stage.
Staging a home has much to do with making a home look good and “smell” great. A very inexpensive and effective method is dryer sheets.
If they are distributed throughout the home in strictly a “clean, fresh” fragrance such as fresh linen, it will make a very positive impression on your potential buyers. Write to me for where to buy these at the best price!
Photos in your home take on an entirely new meaning when you place a for sale sign in your yard. Basically, it means that you need to remove those precious photos and pack them early for your next home. When people view a home, they try very hard in most 15 minute tours, to envision living in this house with their family.
A very important factor in our home staging division “MIRAGE”, is to keep the word neutralize in mind. While decor magazines encourage bright and bold colors, the home buyer normally takes a step back when they enter a room with this type of boldness. I have chosen a very soft “signature” color for our company….details soon!
Mortgage Market Update
27
Apr
In This Issue…
Last Week in Review: Europe and the Treasury Department impacted Bonds. Find out what it all means to home loan rates.
Forecast for the Week: This week will be busy from start to finish… but the biggest news will hit on Friday. Read below to learn why.
View: Mobile phone banking is convenient. But is it safe? Read these tips to help lower your risk!
Last Week in Review
“It’s not a matter of IF, but WHEN!” That old adage proved true last week as the fiscal problems in Europe came back to roost as predicted – even after being overshadowed recently by news from Japan and the Middle East.
Despite all the focus on government debt in Europe, it’s important to note that the problems are more than just financial; there is also a ton of political capital at risk. The stronger and more fiscally conservative Euro member countries like Germany and France do not want to pick up the tab for poor performing countries like Ireland, Greece, Portugal and many others standing in line behind them. And as news flows out of Europe – either good or bad – Mortgage Bonds and home loan rates here in the US will move in sympathy.
One news item that pressured Bonds lower last week was word that inflation in the United Kingdom (UK) jumped to the highest level in two years in February. Remember, inflation is the archenemy of Bonds, and inflation around the globe seeps into the US.
In fact, we’re already seeing it as Producer Prices (which look at wholesale inflation) are running at very hot levels… with prices up 3.3% in just the last three months. If pricing pressures don’t recede for producers of goods and services, companies will have one of two choices:
Either: Absorb the higher cost of goods – and, thereby, hurt earnings growth
Or: Pass those increased costs onto consumers – thereby, creating consumer inflation
Both of those scenarios would be bad for Stocks and Bonds. And since home loan rates are tied to Mortgage Backed Securities – which are a type of Bond – those scenarios would also be bad for home loan rates.
Speaking of Mortgage Backed Securities, last week the Treasury Department announced it is going to begin selling some of its massive Mortgage Backed Securities holdings. This is important to anyone looking to purchase or refinance a home. That’s because this announcement immediately pushed Bond prices significantly lower, as Traders tried to get their own positions sold. Think of it as a financial game of musical chairs… in which no one wants to be the last one standing with a mitt full of Mortgage Backed Securities. This isn’t the last we’ll hear about this – and since home loan rates are tied to Mortgage Backed Securities, this creates the potential for home loan rates to rise in the near future.
Fortunately, home loan rates are still at very attractive levels for now, despite the Bond market taking a hit for most of last week. So if you’ve been thinking about purchasing or refinancing a home, this is the time to see how you can benefit before rates possibly move higher. Because as bad as it was to lose some Bond pricing in the last few days, prices could move significantly worse depending on how they hold on to technical support.
For more information on what this means and how it may impact you or someone you know, call or email today. I’ll be happy to explain the situation and offer advice based on your unique situation.
Forecast for the Week
This week will be busy from start to finish… but the biggest news will hit on Friday!
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Right away Monday morning we’ll see the Personal Consumption Expenditures (PCE) Index, which is the Fed’s favorite gauge of inflation. And as stated above, inflation is the archenemy of Bonds – which means it’s also bad for home loan rates.
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We’ll also see a new report Monday morning on Pending Home Sales, which comes after last week’s disappointing reports on Existing Home Sales and New Home Sales.
· This week, we’ll gain new insight on consumers – with the Personal Spending and Personal Income reports on Monday as well as the Consumer Confidence report on Tuesday. · Manufacturing will also be in the news with Thursday’s release of the Chicago PMI, which reports on manufacturing in Chicago and is a good indicator of overall economic activity.
· But the big news to watch this week relates to employment, which kicks off Wednesday with the
ADP National Employment Report on non-farm private employment. -
Next up is another round of Initial Jobless Claims on Thursday. Last week’s report indicated that Jobless Claims are improving on a weekly basis, but at a snail’s pace and not enough to make a meaningful dent in our stubbornly high unemployment rate.
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Finally, the busy week culminates with the highly anticipated Jobs Report on Friday. This report features new data regarding job growth and the unemployment rate – needless to say, this report can be a big market mover!
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
As you can see in the chart below, Bonds and home loan rates took a negative turn last week, due in large part to pressure from inflation concerns and a rebound in the Stock market. However, rates are still attractive
- making this an opportune time to take action for people looking to purchase or refinance a home before rates potentially worsen further.
Safe Ways to Bank With Your Smart Phone
Follow these steps to lower the risk of having your personal information stolen.
By Cameron Huddleston, Kiplinger.com
Using your smart phone to check your bank account balance or deposit a check is convenient. But is it safe?
Hackers are getting better at finding ways to tap into smart phones and capture people’s account numbers and other personal information. However, there are ways to lower your risk of becoming a victim, says Michael Gregg, a cyber security expert and founder of Superior Solutions. Here are his tips:
Don’t use public Wi-Fi to access accounts online. Use your phone provider’s network, instead, because it’s more difficult for hackers to tap into it. Public Wi-Fi connections, on the other hand, are easily compromised not just by savvy cybercriminals but by anyone who downloads a free program, which allows users to see what others are doing online and log onto their accounts as them.
Watch out for smishing (fake text messages). If you get a text message supposedly from your financial institution warning you that there may be a problem with your account, don’t click on any links or call a number in the message. The link could take you to a phony site with malicious software that will give criminals access to your phone. And the number could connect you with scammers who are trying to collect your account information. Go directly to your bank’s Web site to check your account or to get a customer service number. And if you get a text message asking you to download a security update for your phone, don’t be fooled. Smart phone makers don’t send out security updates by text message, Gregg says.
Be careful where you browse. Go to sites you know to conduct financial transactions. And before downloading any banking applications, check your financial institution’s site to make sure it offers one. Apple puts all apps for the iPhone through serious scrutiny, but other smart phone makers do not. A year ago, more than 50 fraudulent mobile banking apps appeared in the Android marketplace and were removed once they were discovered — after many had bought and downloaded the apps.
Don’t jailbreak your iPhone. You’ll lose your security mechanisms, Gregg says, if you tamper with your iPhone so it can run on another service provider’s network or download additional apps.
Reprinted with permission. All Content c2011 The Kiplinger Washington Editors. www.kiplinger.com.
Economic Calendar for the Week of March 28 – April 1, 2011
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Economic Calendar for the Week of March 28 – April 01
