It's good to see that rates have come back down. As predicted, they will go up and swing back down. It's just harsh and sometimes scary to see how violently they can swing these days. As anyone who's working with us currently, we've just experienced a half a point swing in rates. luckily we're back to where most borrowers started. it's just a wild ride and i encourage you to jump on but buckle your seat belts :) !!
And now for reality. Not REALTY, but reality. I had a long conversation with my brother in law who is a higher up in major east coast diner chain. Quality resturant with upper diner food and costs. Not a Waffle House but not a Jeri's deli. Bottom line is that they're a good representation for what America is. And we spoke about how business is slow. The reality is that Main street still seems to be suffering while Wall street is talking about recovery. I don't know if this is just the nature of the world and the money will trickle down eventually but people are still broke.
We're all watching our money closer these days. I think if there is any sentiment that people are going by, it would be acceptance. Everyone knows we in hard economic times. There is no one thinking that they're imune to what's going on. With acceptance many people are not as scared to spend some money. Hell, eventually you have to buy stuff. It just now people are more picky on what they buy and when they'll buy it. And if you go out for a nice expensive dinner, you're probably bringing in lunch to the office the rest of the week. Don't be fooled, acceptance isn't the same as recovery. I feel that the pundits we see on TV and the internet report from the view of Wall Street who hasn't missed a beat. They've got government money to play with.
As for the mortgage business and rates, all we can do is jump onto the roller coaster and hope we can jump off at the lowest points. We've seen a half a point swing up and down on rates this last month.
Sunday, January 24, 2010
Wednesday, January 6, 2010
Happy New Year. What will 2010 bring?
First off, Happy New Year to all. I'm probably the last to wish it to you, and by now, hopefully the last.
Let me say, the worst part of any new year or new decade is putting the wrong year. You all must know the feeling of putting 0_ before everything. Now I've got to deal with putting a 1 then a number and no zero at all. Doesn't anyone feel bad for the zeros of this word? Anyway...
When the tides started to turn people generally felt that we'd be out of this financial mess by 2010. Even I thought things would be getting better. I'm not going to be totally negative. I feel that we're starting to see a little sparkle of light coming over the horizon but it's far off and slow moving.
There are a ton of new rules and forms that, at least for the Bear clients, are useless. I was reading one, and on it the form explains a 30 year fixed loan four different ways. These are supposed to protect borrowers not confuse them more. Whatever the changes are, they're just changes and like I said, Bear clients always know whats going on so I'm not worried just annoyed. But this is all for another time and post.
Rates are swinging like I wrote about earlier. A few weeks of the rates slowly moving up on speculation that Fed money would dry up has done a 180, as predicted, when over the past week the Fed has promised billions to GMAC and I'm guessing (totally guessing) that you'll hear that the Fed will continue to buy MBS.
Also, as everyone (except for people in the commercial business) they're getting hammered. An post on Calculated Risk had a good chart seen below about strip mall vacancies. You don't have to be a millionaire to own a strip mall and many small / family businesses occupy these types of spaces. Even in a bad neighborhood a strip mall is where locals go to get food, laundry, cell phones, local goods, etc. These are the kinds of "real world" figures that I'm always saying that should count more into figuring out the economics that are happening.
We've seen rate come back down of their recent swing up. I believe that we'll have a nice swing down similar to what happened a month or so ago. So anyone who hasn't locked in yet, now is a great time to get ready for when the rates do take their dip.
I hope that we're seeing positive numbers coming up in 2010. It seems that we will. But as anyone can tell you, the bubble we experienced took a long time to grow and pop. It will take a long time to get back to normal. I remember from 03 - 07 each year I'd get someone to come into my office and say, "this is it, its over. Get out of the business now while you still can." Not until the end of 2008, was it that we really started to feel the effects of the recession that loomed. If you tak even half of that example, we've still got another year to go until we start to level out and start to rise. Again, the rise is going to be very slow because of the new rules and regulations. These items would have been good while times where good so things didn't get out of control. But now they seem to just be getting in the way. Again, something for another post.
These last two post haven't been the Bear's greatest. I'll keep working on it. There is just so much that is going on even in this bad economy, I just want to share all the grim reaper news and ideas that I have. It's just that to see a little chance of recovery, true recovery, in a year or so is nice. I sure hope we don't find a way of messing it up.
Let me say, the worst part of any new year or new decade is putting the wrong year. You all must know the feeling of putting 0_ before everything. Now I've got to deal with putting a 1 then a number and no zero at all. Doesn't anyone feel bad for the zeros of this word? Anyway...
When the tides started to turn people generally felt that we'd be out of this financial mess by 2010. Even I thought things would be getting better. I'm not going to be totally negative. I feel that we're starting to see a little sparkle of light coming over the horizon but it's far off and slow moving.
There are a ton of new rules and forms that, at least for the Bear clients, are useless. I was reading one, and on it the form explains a 30 year fixed loan four different ways. These are supposed to protect borrowers not confuse them more. Whatever the changes are, they're just changes and like I said, Bear clients always know whats going on so I'm not worried just annoyed. But this is all for another time and post.
Rates are swinging like I wrote about earlier. A few weeks of the rates slowly moving up on speculation that Fed money would dry up has done a 180, as predicted, when over the past week the Fed has promised billions to GMAC and I'm guessing (totally guessing) that you'll hear that the Fed will continue to buy MBS.
Also, as everyone (except for people in the commercial business) they're getting hammered. An post on Calculated Risk had a good chart seen below about strip mall vacancies. You don't have to be a millionaire to own a strip mall and many small / family businesses occupy these types of spaces. Even in a bad neighborhood a strip mall is where locals go to get food, laundry, cell phones, local goods, etc. These are the kinds of "real world" figures that I'm always saying that should count more into figuring out the economics that are happening.
We've seen rate come back down of their recent swing up. I believe that we'll have a nice swing down similar to what happened a month or so ago. So anyone who hasn't locked in yet, now is a great time to get ready for when the rates do take their dip.
I hope that we're seeing positive numbers coming up in 2010. It seems that we will. But as anyone can tell you, the bubble we experienced took a long time to grow and pop. It will take a long time to get back to normal. I remember from 03 - 07 each year I'd get someone to come into my office and say, "this is it, its over. Get out of the business now while you still can." Not until the end of 2008, was it that we really started to feel the effects of the recession that loomed. If you tak even half of that example, we've still got another year to go until we start to level out and start to rise. Again, the rise is going to be very slow because of the new rules and regulations. These items would have been good while times where good so things didn't get out of control. But now they seem to just be getting in the way. Again, something for another post.
These last two post haven't been the Bear's greatest. I'll keep working on it. There is just so much that is going on even in this bad economy, I just want to share all the grim reaper news and ideas that I have. It's just that to see a little chance of recovery, true recovery, in a year or so is nice. I sure hope we don't find a way of messing it up.
Tuesday, December 22, 2009
Speculation
Speculation. That's a scary word. I've been doing a lot of reading today on why rates have gone up the last few days.
Now remember, I usually believe that rates go up and down. You'll rarely see in a day to day chart that rates just go up and up and up, conversely you won't see them go down, down, down. News will be anticipated causing rates to do one thing, reality will set it and then rates will do the opposite and land a little bit more in the direction they're supposed to go into.
Since it doesn't really matter what I think and I'm just as accurate as the "professional" writers of the economy, here's my thoughts on rates. I think they'll stay LOW, that's right, low. Why? Well, we have to look at why people think rates will go up. It's a belief that the government will stop buying MBS (mortgage backed securities) in March / April as currently planned. Also, in the same time is when the temporary credits for home buyers will end as well. But that was all supposed to happen at the end of this year. The economy looked so bad that the government said, we have to extend these programs so to stimulate the housing market.
My question is, has anything changed? Look in your pocket, has them money grown? Let's see the sales data from the holiday season. I think we'll see a weak economy. This will lead to the extension of MBS buying by the Fed. The market is reactionary. That's why rates are rising months before the Fed actually stops buying these securities. What happens if all of the sudden the Fed comes out in January and says, we're going to extend these purchases and incentives that seem to be the only real stimulus that is working for the average worker further into next year if not the end of the 2010? You'll see rates drop back down and people to continue buying houses. I don't think it seems so far fetched that these programs could continue if the Fed shows / sees that this is what is stimulating the economy and if it where to stop things would only get worse.
I find it funny how people look at dates and schedules that have changed a million times before but this is the final time, "this is the time where the Fed will stop." (paraphrasing) "Rates hit a all time low and there is now where to go but up" - recent CNBC article. I've heard the same thing about rates for the past 6 or 7 years. Every time rates get low, someone will come out and say "That's it, rate have now where to go but up and here's the reason..."
How about this one? Rates go up and down. Yes we've recently hit a little low, and have now bounced back up but they can just as easily go right back down and possibly drop even the slightest bit further down. The people that say the rates are off from their historical trends of following the yields of the treasuries and we should have higher rate are telling the truth; but my issue is that right now we're experiencing very odd times. you can't judge what's going to happen. the yield was higher in the beginning of December was higher than it was in the summer but the rates in early December where lower than at any time during the past 3 - 4 months. Explain that. It doesn't follow conventional logic. You can't expect one part of this economy to be certain and stick to past rules while other parts are doing things you've never seen or expected.
I think everything right now needs to be less reactionary to what is supposed to happen in 3 - 6 months and more to what's going on now. If that means rates go up today, fine then the Fed will have to extend their buying policies and THEN the rates will come right back down. It's still reaction but it's current and actual reactions to what's happening. With so much in limbo how can people speculate on what's going to happen in the future? I remember at the end of 2008 we where supposed to be done with the depression and back to normal at the beginning of 2010. We might not technically be in a recession but it sure feels like we are and I don't see anything that says in six months we'll be anywhere different.
Only time will tell. Let's visit this in six months and see if everything that was "planned" actually happened.
Now remember, I usually believe that rates go up and down. You'll rarely see in a day to day chart that rates just go up and up and up, conversely you won't see them go down, down, down. News will be anticipated causing rates to do one thing, reality will set it and then rates will do the opposite and land a little bit more in the direction they're supposed to go into.
Since it doesn't really matter what I think and I'm just as accurate as the "professional" writers of the economy, here's my thoughts on rates. I think they'll stay LOW, that's right, low. Why? Well, we have to look at why people think rates will go up. It's a belief that the government will stop buying MBS (mortgage backed securities) in March / April as currently planned. Also, in the same time is when the temporary credits for home buyers will end as well. But that was all supposed to happen at the end of this year. The economy looked so bad that the government said, we have to extend these programs so to stimulate the housing market.
My question is, has anything changed? Look in your pocket, has them money grown? Let's see the sales data from the holiday season. I think we'll see a weak economy. This will lead to the extension of MBS buying by the Fed. The market is reactionary. That's why rates are rising months before the Fed actually stops buying these securities. What happens if all of the sudden the Fed comes out in January and says, we're going to extend these purchases and incentives that seem to be the only real stimulus that is working for the average worker further into next year if not the end of the 2010? You'll see rates drop back down and people to continue buying houses. I don't think it seems so far fetched that these programs could continue if the Fed shows / sees that this is what is stimulating the economy and if it where to stop things would only get worse.
I find it funny how people look at dates and schedules that have changed a million times before but this is the final time, "this is the time where the Fed will stop." (paraphrasing) "Rates hit a all time low and there is now where to go but up" - recent CNBC article. I've heard the same thing about rates for the past 6 or 7 years. Every time rates get low, someone will come out and say "That's it, rate have now where to go but up and here's the reason..."
How about this one? Rates go up and down. Yes we've recently hit a little low, and have now bounced back up but they can just as easily go right back down and possibly drop even the slightest bit further down. The people that say the rates are off from their historical trends of following the yields of the treasuries and we should have higher rate are telling the truth; but my issue is that right now we're experiencing very odd times. you can't judge what's going to happen. the yield was higher in the beginning of December was higher than it was in the summer but the rates in early December where lower than at any time during the past 3 - 4 months. Explain that. It doesn't follow conventional logic. You can't expect one part of this economy to be certain and stick to past rules while other parts are doing things you've never seen or expected.
I think everything right now needs to be less reactionary to what is supposed to happen in 3 - 6 months and more to what's going on now. If that means rates go up today, fine then the Fed will have to extend their buying policies and THEN the rates will come right back down. It's still reaction but it's current and actual reactions to what's happening. With so much in limbo how can people speculate on what's going to happen in the future? I remember at the end of 2008 we where supposed to be done with the depression and back to normal at the beginning of 2010. We might not technically be in a recession but it sure feels like we are and I don't see anything that says in six months we'll be anywhere different.
Only time will tell. Let's visit this in six months and see if everything that was "planned" actually happened.
Tuesday, December 15, 2009
News and expectations
Today's been an odd day for news. So odd that something is not feeling right and I hope it's not true. I'm seeing articles saying that we're slowly but surely coming out of the recession that we're in. Of course that's easy to say when you fall flat on your face, of course things will get better eventually. Slowly, I too agree with. But that's the kind of article that makes you think "things" are going to be ok sometime soon.
Then I read the dollar is inching up. Then I read home manufacturing is down. And in my gut and from what I saw from the results of Black Friday, we're not going to have great / good numbers from December, which is what will make or break many business's year.
The odd feeling that I'm getting is stagnation. Which is not good for anyone. I know it's hard to hear and unfair to say but if the housing market is going up or down, with low rates like they are, we can do something with it. But if you have everyone just holding and saving their money we're going to go into stagnation which is the worst thing that could happen on an unstable economy.
Rates are low and you're still seeing people buying and selling (be it short sale or foreclosure too) we've got a punchers chance to take on 2010. But if my gut is wrong, and I hope it is, let's hope stagnation of this economy doesn't set in. Only time will tell. Let's see what the rest of this week says because once we get into the second half of December, you're not going to be able to do much... except await the next Bear installment :)
Then I read the dollar is inching up. Then I read home manufacturing is down. And in my gut and from what I saw from the results of Black Friday, we're not going to have great / good numbers from December, which is what will make or break many business's year.
The odd feeling that I'm getting is stagnation. Which is not good for anyone. I know it's hard to hear and unfair to say but if the housing market is going up or down, with low rates like they are, we can do something with it. But if you have everyone just holding and saving their money we're going to go into stagnation which is the worst thing that could happen on an unstable economy.
Rates are low and you're still seeing people buying and selling (be it short sale or foreclosure too) we've got a punchers chance to take on 2010. But if my gut is wrong, and I hope it is, let's hope stagnation of this economy doesn't set in. Only time will tell. Let's see what the rest of this week says because once we get into the second half of December, you're not going to be able to do much... except await the next Bear installment :)
Monday, November 23, 2009
Thanksgiving showdown
Well, this is it boys and girls. This is the start of the of holiday buying time. This is where companies can make or break their year. Some have high hopes that this will be an lean year at best. But as you probably could guess, I'm thinking that this holiday season is going to be bad.
Sure you might see great sales but that leads to the question, who's going to buy these items. If you're broke, who cares if a TV is 1500, down from 3000? I've had my eye on a new TV and I've watched the price come down and down. If it wasn't for the fact I've got bills to pay I would buy it. I'm thinking that I'm in the same boat as a lot of other Americans this year. Even the family has said there will be no gifts, just a few for our family get together but no "big" holiday spending. I think that's what kitchen table talk is.
You're starting to see the numbers to support this. Even with everyone thinking that the government will extend their housing programs into next year, nothing official has come out which causes great anxiety. I can almost guarantee that these programs will extend but who am I, just some Broker (the best) but not the one who makes the rules.
I love Thanksgiving. It's my favorite holiday. I'm not one that goes out on Black Friday because I'm usually in a food coma for at least a day or two, but I'm going to be interested in what the stores do look like and the reports of how those store's earnings are doing in this most important of times. If stores don't do well, forget about seasonal hiring; how bad would it be for people to continue to loose their jobs at this time of year. That too will be a telling statistic of where the economy is at and where it's going.
I'm sure we'll talk again this week since I'll have time to pontificate, but if I don't, BEAR wishes one and all a happy Thanksgiving.
Sure you might see great sales but that leads to the question, who's going to buy these items. If you're broke, who cares if a TV is 1500, down from 3000? I've had my eye on a new TV and I've watched the price come down and down. If it wasn't for the fact I've got bills to pay I would buy it. I'm thinking that I'm in the same boat as a lot of other Americans this year. Even the family has said there will be no gifts, just a few for our family get together but no "big" holiday spending. I think that's what kitchen table talk is.
You're starting to see the numbers to support this. Even with everyone thinking that the government will extend their housing programs into next year, nothing official has come out which causes great anxiety. I can almost guarantee that these programs will extend but who am I, just some Broker (the best) but not the one who makes the rules.
I love Thanksgiving. It's my favorite holiday. I'm not one that goes out on Black Friday because I'm usually in a food coma for at least a day or two, but I'm going to be interested in what the stores do look like and the reports of how those store's earnings are doing in this most important of times. If stores don't do well, forget about seasonal hiring; how bad would it be for people to continue to loose their jobs at this time of year. That too will be a telling statistic of where the economy is at and where it's going.
I'm sure we'll talk again this week since I'll have time to pontificate, but if I don't, BEAR wishes one and all a happy Thanksgiving.
Friday, October 2, 2009
Keep 'um coming!!!
As I've predicted rates have stayed low, if not gotten lower. If you own a home and aren't thinking about refinancing then you're not doing the correct thing. At least check in and see what's possible.
I certainly can't guarantee that everyone will qualify. And with these new HVCC rules, who knows what value you are going to get? But if we don't explore the options, like run the credit and possible pay for an appraisal, then you'll never know.
If we think that there is a possibility to refi, I'm looking at rates in the 4's for a 30 year fix and have even seen some rates in the 3's, YES 3's on a 5/1 ARM even interest only!!!
Let me try to help you. I usually don't do adds here but when I'm seeing the trends like I have in the past, I don't want people to miss the boat because this truly could be the last chance. As always we can be reached at 818 264-0999.
Please be patient as well. Now the lenders are starting to get backed up again and so is everyone else. From appraisers to title and escrow and even us brokers. Each deal is now twice as hard and there is a lot of up front work that needs to be done so we know that we can get each loan done. The good part is eventually the loans are funding. It might take longer that the good old days but the loans are still funding. So call now and see what can be done.
I certainly can't guarantee that everyone will qualify. And with these new HVCC rules, who knows what value you are going to get? But if we don't explore the options, like run the credit and possible pay for an appraisal, then you'll never know.
If we think that there is a possibility to refi, I'm looking at rates in the 4's for a 30 year fix and have even seen some rates in the 3's, YES 3's on a 5/1 ARM even interest only!!!
Let me try to help you. I usually don't do adds here but when I'm seeing the trends like I have in the past, I don't want people to miss the boat because this truly could be the last chance. As always we can be reached at 818 264-0999.
Please be patient as well. Now the lenders are starting to get backed up again and so is everyone else. From appraisers to title and escrow and even us brokers. Each deal is now twice as hard and there is a lot of up front work that needs to be done so we know that we can get each loan done. The good part is eventually the loans are funding. It might take longer that the good old days but the loans are still funding. So call now and see what can be done.
Housing thoughts
Sorry I've been lazy with the blog.
I think we're getting closer to the bottom of the market. There may still be another 10% to drop in the average area. I feel that in the higher end homes you'll start to see a much larger drop. The financial crisis we're all experiencing is starting to hit the homes that are 900k and above. The homes that I think that will be hit the hardest are the ones that are 900k - 2 million. The reason being that the buyers of those homes that have a standard of 20 - 25% are still going to have trouble finding financing. Also, those seem to be the homes that the bank was less willing to foreclose on because, let's face it, there are not a lot of people that have 180 - 400k to put down on a house. I could go on, but I don't want to bore you with facts and numbers.
The people with homes in the 4 million and over, they're always going to be and have been a different breed. Unless they are hit with job losses, those homes won't need to sell and you'll see people sitting on those. But if you an average home buyer, now is a great time to be looking.
I know that the banks are sitting on a ton of inventory. Adding to that 60% of people who manage to get a rate mod are still going into foreclosure, so you've got that group that will start hitting soon. I'm seeing places that where going for 600k, going down as low at 350 - 400. Sure they where way over inflated but you can get good deals. And with rates this low it makes a lot of sense. Just be patient. At this very moment the inventory of houses is not very good. Anything that is worth looking at probably already has multiple offers on it. The key is to have the financing ready and save as much for a down payment as possible. If you're going against multiple offers and you can put a good down payment together, if it's a short sale or foreclosure where the banks are making the decisions, they want to go with the quickest and least hassle buyers.
As always, if you have any questions, give us a call. I'm happy to discuss all options with you.
818 264-0999
I think we're getting closer to the bottom of the market. There may still be another 10% to drop in the average area. I feel that in the higher end homes you'll start to see a much larger drop. The financial crisis we're all experiencing is starting to hit the homes that are 900k and above. The homes that I think that will be hit the hardest are the ones that are 900k - 2 million. The reason being that the buyers of those homes that have a standard of 20 - 25% are still going to have trouble finding financing. Also, those seem to be the homes that the bank was less willing to foreclose on because, let's face it, there are not a lot of people that have 180 - 400k to put down on a house. I could go on, but I don't want to bore you with facts and numbers.
The people with homes in the 4 million and over, they're always going to be and have been a different breed. Unless they are hit with job losses, those homes won't need to sell and you'll see people sitting on those. But if you an average home buyer, now is a great time to be looking.
I know that the banks are sitting on a ton of inventory. Adding to that 60% of people who manage to get a rate mod are still going into foreclosure, so you've got that group that will start hitting soon. I'm seeing places that where going for 600k, going down as low at 350 - 400. Sure they where way over inflated but you can get good deals. And with rates this low it makes a lot of sense. Just be patient. At this very moment the inventory of houses is not very good. Anything that is worth looking at probably already has multiple offers on it. The key is to have the financing ready and save as much for a down payment as possible. If you're going against multiple offers and you can put a good down payment together, if it's a short sale or foreclosure where the banks are making the decisions, they want to go with the quickest and least hassle buyers.
As always, if you have any questions, give us a call. I'm happy to discuss all options with you.
818 264-0999
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