Was it really only a 4-day workweek? For some reason it seems longer…
A college girlfriend once told me, “The more I think of you, the less I think of you.” At first I thought that was pretty clever, but then it dawned on me what she was saying… The same goes for rates. These rates, relative to where they were two weeks ago, are bad. 30-yr conforming is back into the low 5% area, “high balance” conforming is priced about .5% higher than “low balance” conforming, and on the wholesale side jumbo loans are in the mid-6% area. Suddenly any borrowers who waited to lock, especially if they incurred expenses in processing or having an appraisal done, are upset. And on the jumbo side, there is still no securitization of larger loans, with portfolio lenders holding on to the product. If housing is going to take us out of the recession, rates moving up won’t help.
There are definitely signs, however, that certain markets are turning around. Yes, prices are lower, but one broker reported, “Things are starting to pick up here in Arizona. The outlying counties are seeing multiple bids on homes in the starter home price range ($95,000 - $150,000), and they are driving other prices up. The move-up homes are getting more foot traffic and sales. And, of course, the luxury home builders are hopeful about the future – now, if only MBS prices would rally and behave! If rates would stay under 5% we might actually have a nice summer.”
Yesterday we learned that Home Sales in the U.S. climbed 0.3%, slightly lower than was expected, and the median price of a new home decreased to $209,700 from $246,400 in April 2008. Still, last month’s value was up from March. And, at first rates continued their march higher as bond prices dropped, but then turned around. Why did they improve, leading to a few intra-day price improvements? “Treasuries rose for the first time in five days on speculation that the highest yields since November are unsustainable given forecasts that the U.S. housing market shows few signs of recovery.” In addition to that, apparently there is some feeling that, with rates where they are, our debt has become more attractive to own. Heck, if a buyer wanted to own 10-yr Treasury debt at 3.00%, they must really like 3.60%, right? It is not quite that simple, but nonetheless rates came down a little.
GDP came out this morning, showing that the U.S. economy contracted slightly less than initially estimated in the first quarter. Another hint that the recession is moderating? Maybe - Gross Domestic Product, which measures total goods and services output within U.S. borders, dropped at a 5.7% annual rate which is less than the 6.1% estimated by the government last month. Output, however, has declined for three straight quarters for the first time since 1974-1975. We still have the Chicago Purchasing Manager’s survey due out (estimated at “42”) along with the University of Michigan survey. After the GDP number the 10-yr yield is 3.61% and mortgage prices are perhaps .5 to .75 better than yesterday afternoon.
Market Report 5/26-5/29
May 29th, 2009 · No Comments
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Increase in Home Sales? 1 of 3 Articles from NYTIMES, SEATTLE TIMES, NWMLS
May 7th, 2009 · No Comments
NYTIMES 1 of 3
May 5, 2009
Where Home Prices Crashed Early, Signs of a Rebound
SACRAMENTO - Is this what a bottom looks like?
This city was among the first in the nation to fall victim to the real estate collapse. Now it seems to be in the earliest stages of a recovery, a hopeful sign for an economy mired in trouble and anxiety.
Investors and first-time buyers, the traditional harbingers of a housing rebound, are out in force here, competing for bargain-price foreclosures. With sales up 45 percent from last year, the vast backlog of inventory has diminished. Even prices, which have plummeted to levels not seen since the beginning of the decade, show evidence of stabilizing.
Indications of progress are visible in other hard-hit areas, including Las Vegas, parts of Florida and the Inland Empire in southeastern California. Sales in Las Vegas in March, for example, rose 35 percent from last year.
Discuss in the Real Estate Forum
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Increase in Home Sales? 2 of 3 Articles from NYTIMES, SEATTLE TIMES, NWMLS
May 7th, 2009 · No Comments
SEATTLE TIMES 2 of 3
Pending sales of single-family homes in King County surged in April
By Eric Pryne
Seattle Times business reporter
If the Seattle residential real-estate market is coming back to life - and that’s still a big if, despite a relatively upbeat monthly report Tuesday - it’s because of people like Lori Gifford.
She and her fiancé, Scott Brush Goodwin, bought their first house last month. It’s a two-bedroom, one-bath former rental in the Arbor Heights neighborhood that the previous owner lost last year through foreclosure.
Goodwin and Gifford paid Washington Federal Savings $249,000 for it.
“I’ve been living in Seattle for 14 years, and I never really thought I could afford to buy a house,” Gifford says. But when they started looking this spring, “it all kind of came together,” she says.
The key elements: Lower prices. Lower mortgage-interest rates. And new incentives for first-time buyers.
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Increase in Home Sales? 3 of 3 Articles from NYTIMES, SEATTLE TIMES, NWMLS
May 7th, 2009 · No Comments
NWMLS 3 of 3
Pending sales in Western Washington rise with improved affordability, buyer incentives
KIRKLAND, WA, May 5, 2009 -Northwest Multiple Listing Service members reported pending sales for April surged 11.4 percent compared to twelve months ago - and rose 21.3 percent from March.
Brokers reported 6,918 pending sales during April across the 19 counties that make up the Northwest MLS market area. That’s up from the year-ago total of 6,208, and the March figure of 5,701 pending sales (offers made and accepted, but not yet closed).
For the four-county Puget Sound area (King, Kitsap, Pierce and Snohomish), brokers notched 5,372 pending sales, the highest total since August 2007 and a jump of 26 percent from March.
Inventory is shrinking and prices are showing some signs of stabilizing, according to data in the latest report from Northwest MLS. The median price for last month’s closed sales of single family homes and condominiums area-wide was $270,000. That matched the figure for March, but still lagged prices of a year ago (down 12.9 percent).
Inventory is down 18.3 percent from year-ago levels, with Clark, Kitsap and Pierce reporting the largest drops. Members added 10,824 new listings of single family homes and condos to inventory last month, down almost 20.5 percent from the year-ago total of 13,607 new listings.
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Market Newsletter 05/04/09
May 5th, 2009 · No Comments
For the week of May 04, 2009 — Vol. 7, Issue 18
Last Week in Review
“YOU’RE MOTORING.WHAT’S YOUR PRICE FOR FLIGHT?” 80’s band Night Ranger’s ballad “Sister Christian” perhaps describes the question some spring break travelers are asking travel agents as they reschedule plans to visit Mexico, in light of last week’s sudden swine flu outbreak. And while the quickly spreading illness has made this Spring’s travel season especially challenging, there are some bright spots on the horizon for the economy.
Last week, the Fed signaled that the recession may be easing, and this news was echoed by the Economic Cycle Research Institute (ECRI), who also said that the recession would probably end by the time Summer is over. The ECRI, whose leading indicators have a solid track record of predicting turns in the business cycle, said that enough of its key gauges have turned upward to indicate with certainty that a recovery is coming.
The beleaguered auto industry has been big news of late, and while Chrysler struggled to find “Mr. Right” in Fiat, the price for their flight ended up to be bankruptcy.while on the other hand, it looks like Ford will be all right tonight, as their Stock is up big from just one week ago. What’s more, as you can see in the chart below, Stocks in general had a great April. In fact, the S&P 500 had its best month in nine years, gaining 9.4%, led by the financial sector. This is further evidence that the changes in mark-to-market accounting were a great decision.
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