Mortgage Market News for the week ending April 25, 2008

Looking Ahead to the Fed

With little scheduled economic news and a couple of major events on the horizon, there was little change in mortgage markets during the week. The daily volatility remained high, however. Mortgage rates ended a little higher than the prior week, and the stock market was almost flat. Investors were mostly preparing for next week’s Fed meeting and Employment data.

Investor sentiment for future Fed actions has shifted significantly over the last couple of weeks. Just weeks ago, investors were expecting an additional three quarters of a point of Fed rate cuts over the next two meetings. Now many believe that the Fed will cut rates by only one quarter point at Wednesday’s meeting and then will hold rates steady. The thinking is that the Fed will pause to consider the effects on the economy of prior rate cuts, other expansionary monetary policies, and fiscal stimulus packages (such as the tax rebates). With energy prices at record levels and the dollar at historic lows, the Fed wants to balance the risk of slower economic growth with the need to prevent higher future inflation. This path could be good for mortgage markets, as higher inflation would generally lead to higher mortgage rates.

In the housing sector, the market for existing home sales showed additional signs of stabilizing, while new home sales displayed weakness. Matching expectations, March Existing Home Sales fell a little from February. Median home prices fell 8% from one year ago, while inventories of unsold homes rose slightly. March New Home Sales fell 9% from February. The chief economist of the National Association of Realtors (NAR) suggested that housing market conditions varied greatly in different regions of the country. The NAR predicted that housing market activity will be flat for a few more months and then will pick up during the second half of the year.

Brought to you by:

Corey Phelps

Front Street Mortgage

Phone: 231-360-7283

Perfect Summer Cottage in Frankfort

Judy Stovak | Remerica-Traverse City | 231-649-9777 1676 Cedar Street, Frankfort, MI Near Lower Herring Lake 2 Bdrm Single Family House   offered at $99,900 Year Built 1940 Sq Footage 1,048 Bedrooms 2 Bathrooms 1 full, 0 partial Floors 1 Parking 3 Lot Size Unspecified HOA/Maint $0 per month DESCRIPTION Location! Location! Large corner lot amongst well kept summer residences. Very close to public access and boat launch to Lower Herring Lake, small lakeview from west side of house. Nice enclosed porch for relaxation or additional sleeping area. Quiet area just south of Frankfort for great family get togethers and weekends getaways. This home is a year around residence and ther are a few residences that are also year around.   see additional photos below Click for listing details PROPERTY FEATURES Fireplace Living room Dining room Refrigerator Stove/Oven Washer Balcony, Deck, or Patio Yard     ADDITIONAL PHOTOS Seller contact info:   Judy Stovak judy@remerica.com Remerica-Traverse City 231-649-9777 For sale by agent/broker   Equal Opportunity Housing Posted: Apr 7, 2008, 9:05am PDT

 

Simple Free Advice & Simple Solutions for U

 Selling or even thinking about it? If your property is lingering on the market & your not sure why or if you are considering selling soon here are some straight forward thoughts on your situation. Property these days must be priced right from the start. This has always been important, as a property listing is only new to the market one time. Today’s market has put this fact to the test over & over again. As a seller you must change hats & think like a buyer! If your plan was to buy today, would you look at overpriced property? Buyers are insisting on the best buy for their hard-earned dollar…just as you did. Well, guess what? Their timing just happens to be better than yours…It is a full-blown “Buyers Market” everywhere you look. Buyers are finding & taking advantage of these deals. That is actually good news because without aggressive, hard-to-impress buyers things could be even worse. Overpricing your property simply will lead to more time on the market which in the end will decrease any eventual profit. Have you looked at the condition of your property lately? Buyers are looking over things very closely & so should you. Make necessary repairs, updates & clean, clean, clean! The ONLY buyer who will even think to consider a property needing repair or updating is an investor. Investors are very hard to come by in today’s climate & what they expect is to purchase, repair, cover these costs & make as a bare-bones minimum 10% for taking the risk & putting forth the effort. Sellers…that is the not so pretty skinny. 

Don’t kid yourself either into thinking that all Realtors & real estate sales firms are the same. They are not. In this market you need all aspects of your sales efforts to be “top-notch” in order to get the job done & done right. Remember REMERICA when you decide to sell!

 Thinking of Buying? Did you know that at one time interest rates topped 20%! That created some very nice bargain shopping opportunity just like in today’s market, if you could afford a 20% rate! Well, have you checked rates lately? Less than 6%! Please understand that a competitive rate such as this does not mean you will qualify. The old rules of having a job, good credit, possible money down & most importantly the right lender, still do apply. It is true that in the wake of huge amounts of bank foreclosures, job losses & other negative factors, the flow of mortgage money has decreased but it has not been shut off. Many good people can still attain a mortgage at a rate that is unprecedented. Minimal or No-money-down is still doable & many programs are still available to accommodate today’s buyer, in today’s market. I do however want to reiterate the importance of matching yourself with an honest, reputable, lender who knows the local market & comes highly recommended. Nothing will kill your dreams & put the fear of buying into you faster than aligning yourself with the wrong lender.  I’m sure you’ve heard at least once to not buy now…hold out; the market will continue to decline…No one is going to ever show you how to pick the bottom. Now IS the time to buy as the market & its momentum is heading in one direction (down) Many of the most successful investors throughout history have practiced what is called the Contrarian Theory. In the most basic terms it means to buy when everyone is selling & sell when everyone else is buying. Or, Buy Low-Sell High. Simple stuff to help you make the best decision & best deal on what will most likely be the biggest investment of your life. It is doubtful that at any time during the rest of your life there will be another opportunity to purchase real estate like we are seeing right now.  Don’t let this pass by-instead…BUY NOW!  Oh, & don’t forget to call REMERICA when the time is right for you to move.  Brad NicholsCo-Broker/Ownerbrad@remerica.com 

The Housing Game

Please join us on Saturday, April 2008 from 9 – 5PM at the Hagerty Center in Traverse City for The Housing Game, brought to you by the Traverse Area Association of Realtors, Northern Michigan College and Traverse Area Chamber of Commerce.  Learn the in’s and out’s of home buying from local professionals.  Admission is free to get in and is open to the public.  Hope to see you there!

Real Estate Recovery – Not an April Fool’s Joke

REAL ESTATE RECOVERY

 

This is not an April Fool Joke.

 

Throughout Michigan there are signs that the real estate market is showing major signs of recovery throughout the State. For example in the Grand Traverse Region between 2006 and 2007 residential units sold was only down by 6.8% when compared to the major reduction between 2005 and 2006 when there was a reduction of more than 15.4% and the 1^st quarter of 2008 numbers appear to be significantly ahead of the 1^st quarter 2007.

 

Recovery seems to be underway as evidenced by reduced residential inventory, foreclosures off by more than 7.9% throughout Michigan, good buying opportunities, Michigan now ranked # 12 in the nation in foreclosures down from # 1 less than one year ago and builders looking at projects as evidenced by recent applications for hearings and land use permits at the township level. As reported by CNBC today some buyers are acquiring land for future projects even in states like California where foreclosures have dramatically increased in recent months.

 

Additionally, we are seeing the extremely pro-active involvement of real estate associations who are finally helping their members by sponsoring and attending events designed to bring out the buying public through education and awareness of market conditions.

 

In Traverse City for example the Traverse Area Association of Realtors is sponsoring a free public real estate expo “The Housing Game” this weekend specifically designed to put a positive spin on the housing situation through education, awareness and exposure to Realtors, banks and builders.

 

In addition, some Realtors are finally getting in a pro-active mode again falling back on old fashion techniques such as contact with relatives, friends, former clients and extensive use of the internet.

 

Great buying opportunities exist throughout Michigan and some investors both foreign and domestic are finally taking advantage of the situation. If you are a seller now is the time to involve a professional – not your best friend because he or she needs a listing.

 

Now is the time to participate in the recovering real estate market by contacting a professional at Remerica Traverse City.

Brent Nichols

Co-Broker/Owner

231-941-8283

brent@remerica.com

 

Weekly Market Forecast

There has been (and will be) many changes to mortgage financing.   The media has stated that home buyers need 20% down in order to get financing.  Please let your buyers know that we still have 100% financing through our government loans! Now is a great time to purchase a home! 

Week of: Monday, March 24, 2008

Present Market Conditions
In his report last week, Freddie Mac’s Chief Economist Frank Nothaft stated that the Federal Reserve decided to lower the target federal funds rate by 0.75 percentage points to 2.25 percent in the Federal Open Market Committee last week. This is the sixth time the Federal Reserve has taken such rate reductions in the past six months. As a result, the federal funds rate is now 3.0 percentage points below where it was just six months ago. In addition, the magnitude of the three rate cuts so far this year is twice as large as all of the cuts from last year, which communicates both the urgency of the situation and the Fed’s determination to avoid a recession and stabilize financial markets.Expectations
Long term mortgage rates fell sharply in the past week as the Federal Reserve cut rates to stimulate the economy and increased liquidity to shore up financial markets. 30-year fixed rates averaged 5.87% this week compared to 6.13% last week according to Freddie Mac’s mortgage market survey. Investors will be waiting for the results of the Jobless Claims and Consumer Sentiment reports due out later this week.Guidance
With housing prices holding at an affordable level, now is a great time to explore your mortgage options. Contact Georgie so she can structure a mortgage solution to meet your financial goals.

Private West Side Traverse City Build Lot – Heritage Estates

5087 S Colonial Dr

Traverse City, MI

         

Builder will build to suit on this gorgeous lot in popular Heritage Estates, a wonderful neighborhood near both the JR & SR high schools on Traverse City’s west side, minutes from shopping, downtown & the hospital. This great parcel backs up to a landlocked property, so no neighbors will be springing up in your backyard! The nearly half acre lot is set up for a walkout. Builder has built 10 gorgeous residences in this admired sub – come take a look at his quality built homes & make this your new address.

Click for details

For more information, please call Mary Murray at 231-632-2343 or marymurray@remerica.com

Newer Home for Slae in Buckley – REDUCED!!

113 S Wood Meadows Dr

Buckley, MI

Park like wooded lot, 5/12 pitch roof, only 20 minutes south of Chums Corners. Private master bedrom & bath. Vaulted ceilings, open & spacious feel. All appliances, large storage shed, treated site built deck.

Click for details

For more information, please call Sharon Reid-Brown at 231-632-6260 or sharonreid@remerica.com

2BR home West of Interlochen – 3 Outbuildings

16550 Fewins Rd

Interlochen, MI

Nice wooded lot with cozy, cute home with 2 outbuildings and three garages. 1 car garage next to home is 16 x 20, 2nd garage/pole building is 24 x 24, 3rd pole building is 24 x 40. Close to 1000’s of acre of state land, great starter home for hobbyist.

Click for details

For more information, call Judy Stovak at 231-649-9777 or judy@remerica.com.

 

Diesel Prices Impacting Home Buying?

Items for contemplation:

Being an old diesel head, by my calculation diesel fuel is up in the last year more than 40%.

Because diesel fuel is used for every form of transportation (trucks, trains, airplanes, delivery trucks) it should not be any surprise that the cost of food products, durable goods, building materials, equipment, you name it has increased in cost at far greater rate than the general inflation rate.

The loss of the Bear Stearns investment house and purchase by JP Morgan supported by the FED clearly is an indication of just how deeply the fuel and housing crisis is impacting our daily life and, for us involved in the housing sector, the ability to achieve the American dream of home ownership.

Across the board we are seeing major builders in turmoil, small and large builders in foreclosure, banks making margin calls, investors loosing their nest eggs, personal portfolios being attacked by recessionary fears, the depreciating dollar, the ever stronger Euro, oil going up daily and no end in site for downward price adjustments in home sector.

Because Michigan led the nation in an uncontrolled economic flat-spin (sky-divers term for an out of control free fall) we are now seeing buying opportunities far ahead of the nation. Now is the time to buy individual homes; now is the time to buy packaged foreclosures; now is the time to buy development properties; now is the time to invest in our State because it is the right economic decision for you at this moment in time.

So what does diesel fuel have to do with housing, simply put everything! Every building product used in some way is dependent upon the consumption of diesel fuel. Generators, trucks, cement mixers, delivery trucks, processing plants, worker to/from work transportation etc.  At the moment the impact of soaring diesel fuel costs is just beginning to be understood and the dramatic impact of diesel fuel has not yet been fully impacted in the housing industry as it has been in some sectors of the economy (freight haulers for example).

Bottom Line: Buy now while the price of homes and building materials are at record level lows and before the price of diesel begins to boost the price of homes and commercial projects.

 

Brent Nichols

Co-Owner/Co-Broker

brent@remerica.com