Posts
Monday, March 17, 2008
ANDERSON FORECAST SAYS HOUSING CRISIS TO EASE
The housing market woes are expected to begin easing up by late 2008 and, despite mounting job losses and fuel and food cost increases, the country will avoid a full recession, according to the UCLA Anderson Forecast report released Tuesday."Our no-recession forecast remains nervously intact," said UCLA Anderson Forecast Director Edward Leamer. "We see a lot of problems in the first half of 2008 as housing remains a drag on GDP growth and weakness in personal consumption contributes as well. We expect one quarter of negative GDP growth. The Fed continues to dish out good news for Wall Street with ever lower interest rates. The labor market is sluggish and unemployment elevates to 5.5 percent by the end of 2008. But the housing drag on GDP dissipates in the second half of the year and a normal economy returns in 2009."
Wednesday, December 12, 2007
Amazing Value
I have just listed a great home in Oceanside to view the virtual tour click here to experience this wonderful home features. http://www.previewfirst.com/ViewVirtualTour.do?id=15923
5 bedrooms plus loft with 3 bathrooms with 2664 sqft for $559,000
5 bedrooms plus loft with 3 bathrooms with 2664 sqft for $559,000
Tuesday, October 30, 2007
The San Diego Fires
It has been a week now since the devastating fires came through San Diego. The air is starting to clear up and seem "normal" again. I hope you and yours are safe. I was lucky not to have had to evacuate. What affects this fire will have totally have yet to be determined. For the housing market I am not sure either, but I would expect there will be more people that are displaced looking for homes.
Friday, September 21, 2007
What The Recent Fed Cut Really Means
Friday, September 21, 2007provided by
Fed's Half-Point Move Likely to Trim Payments on Credit Cards, Home-Equity Lines, but Offer
Scant Relief on Certain Mortgages
Consumers should soon start feeling the impact of Tuesday's Fed rate cut in the form of lower borrowing costs and stingier savings rates. But the rate cut doesn't offer much help for the key problems bedeviling many mortgage borrowers.
The Federal Reserve said it lowered short-term interest rates by half a percentage point, to 4.75%, to combat the effects of a weaker housing market and tighter credit on the broader economy. The steep reduction in the Fed funds rate surprised many on Wall Street who expected a more modest rate cut. Stocks on Sept. 18 rose sharply after the Fed's announcement, with the Dow Jones Industrial Average gaining 335.97 points, or 2.5%, to 13739.39.
The rate cut should reduce payments on many home-equity lines of credit, credit cards and some car loans. Perversely, however, some economists say it could lead to higher rates on fixed-rate mortgages down the road if bond markets expect the Fed move will spur higher economic growth or inflation.
There also is likely to be little immediate relief for borrowers with certain types of adjustable-rate mortgages. That's because the rates on some of these loans are tied to the London interbank offered rate, or Libor, which recently jumped sharply above the Fed funds rate because of the continuing credit crunch in the markets. Libor, which has drifted downward recently, is an interest rate charged by banks for short-term loans to each other.
"If Libor doesn't come down, there is no relief" for many mortgage borrowers, says James Bianco, president of Bianco Research LLC, a market-research firm in Chicago.
Borrowers who should see immediate benefits from the Fed cut are those holding loans tied to U.S. banks' prime rate. Consumers can contact their lenders to inquire how their rates are calculated. Many banks cut their prime rates by half a percentage point after yesterday's Fed move.
Here is a look at what the Fed's action means for consumers:
• Homeowners. The rate cut is good news for borrowers with home-equity lines of credit, and savings could show up as soon as the next monthly statement. Borrowers looking for a new fixed-rate home-equity loan could also see lower rates. There are likely to be regional differences, with lenders most likely to cut rates on these loans in areas where the housing market is healthy and the local economy is robust, says Doug Duncan, chief economist of the Mortgage Bankers Association. Before the Fed's latest move, rates on home-equity lines averaged 8.72%, while home-equity loans averaged 8.29%, according to HSH Associates.
But in a twist, the Fed cut could boost rates down the road for 30-year fixed-rate mortgages. These rates are typically influenced by rates on 10-year Treasurys, which have moved lower recently in anticipation of a quarter-point cut in rates and because of a flight to quality in bond markets. But if markets expect a higher level of economic growth than previously anticipated, or a pickup in inflation, borrowers could see "some modest increase in fixed-rates going forward, though not necessarily immediately," Mr. Duncan says.
Recent news has been mixed for borrowers with adjustable-rate mortgages. Borrowers with ARMs that are tied to Treasury averages have benefited from a recent decline in rates. For those who are facing their first rate reset on Oct. 1, "that reset will be less painful than it would have been had it taken place a couple months ago," says Greg McBride, a senior financial analyst with Bankrate.com.
But higher borrowing costs may still be in the offing for homeowners whose adjustables are tied to Libor. Libor is frequently used to set rates for subprime adjustables, loans made to borrowers with scuffed credit. As for non-subprime ARMs, roughly half of these originated in recent years are also tied to Libor, estimates Keith Gumbinger, a mortgage analyst with HSH Associates. Borrowers can determine which index their adjustable is tied to by checking their loan documents.
The rate cut isn't likely to do much for the biggest problem facing the mortgage market: a liquidity crunch that has made it tougher for many borrowers to get a loan. "People have been characterizing this as a bailout for housing, but I don't think that's accurate," says Mr. Duncan of the Mortgage Bankers Association. The rate cut is "much more about the broader economy," while the mortgage market's troubles are "all about credit and property values."
• Savers. Savers could soon see lower payouts on their savings accounts, certificates of deposit and money-market mutual funds. In fact, some banks have already started to reduce their rates or scale back their deals. Bank of America Corp., for instance, recently shortened the maturities on its promotional CDs paying 5% to four months from eight months.
Nevertheless, banks are going to be reluctant to cut rates before their competitors, in part because consumer deposits remain one of the cheapest sources of funds available for the banks, says Bankrate.com's Mr. McBride. In fact, average CD rates have barely budged in recent months with yields on five-, three- and one-year CDs currently at 4%, 3.77% and 3.76%. "That is very uncharacteristic," since CD yields normally move well in advance of a Fed action, he says. "Savers are getting a break."
Average yields on money-market mutual funds, which have been hovering at 5% for about a year, are likely to drop to about 4.5% in the next month, says Pete Crane of Crane Data LLC. But part of the fall in yields may be counteracted by some managers' moves to buy higher-yielding asset-backed commercial paper, he says. As a result, there may be a benefit to shopping around since money managers can differentiate their funds' performance by investing in the higher-yielding securities.
• Credit Cards. Many credit-card customers should soon see some relief. About 85% of all credit cards carry variable rates. But many holders of these cards will see a benefit only if their current rate exceeds any floors established by the issuers, typically around 14% to 15%, below which their rates can't fall. Today, most interest rates are in the 18%-to-19% range.
Since most issuers adjust their pricing on a monthly basis, about half of all variable-rate cards should see an adjustment in October, with the rest in November, says Robert McKinley, chief executive of CardWeb.com. "Consumers could find some money in their pockets in about a month." The half-percentage-point drop in rates should result in a savings of about $30 a month for the typical household, which carries a median credit-card debt of $7,000, he says.
• Auto Loans. A rate cut isn't likely to have a big impact on new-car loans in part because more than half of all auto loans are already offered at reduced rates due to heavy manufacturer incentives, says Art Spinella, president of CNW Marketing Research Inc. But the Fed's move could make it cheaper to get a used-car loan because many people turn to banks and credit unions to finance their purchase, he says.
Still, consumers could start seeing better financing deals if the Fed continues to cut rates. Auto-loan rates, generally tied to the movement in Treasurys, already had started to ease given the recent drop in Treasury yields. Average rates on five-year new-car loans are 7.72%, versus 7.81% on July 4, according to Bankrate.com.
• Student Loans. Students with private, variable-rate student loans pegged to the prime rate may see their rates adjust more quickly than borrowers with loans tied to Libor. (Loans pegged to Libor or the prime rate are split about equally.)
But that doesn't automatically mean that borrowers should switch to prime-based loans. Historically, loans pegged to Libor have tended to yield a slightly lower rate than loans tied to prime over the life of the loan, says Mark Kantrowitz, publisher of FinAid.org.
Fed's Half-Point Move Likely to Trim Payments on Credit Cards, Home-Equity Lines, but Offer
Scant Relief on Certain Mortgages
Consumers should soon start feeling the impact of Tuesday's Fed rate cut in the form of lower borrowing costs and stingier savings rates. But the rate cut doesn't offer much help for the key problems bedeviling many mortgage borrowers.
The Federal Reserve said it lowered short-term interest rates by half a percentage point, to 4.75%, to combat the effects of a weaker housing market and tighter credit on the broader economy. The steep reduction in the Fed funds rate surprised many on Wall Street who expected a more modest rate cut. Stocks on Sept. 18 rose sharply after the Fed's announcement, with the Dow Jones Industrial Average gaining 335.97 points, or 2.5%, to 13739.39.
The rate cut should reduce payments on many home-equity lines of credit, credit cards and some car loans. Perversely, however, some economists say it could lead to higher rates on fixed-rate mortgages down the road if bond markets expect the Fed move will spur higher economic growth or inflation.
There also is likely to be little immediate relief for borrowers with certain types of adjustable-rate mortgages. That's because the rates on some of these loans are tied to the London interbank offered rate, or Libor, which recently jumped sharply above the Fed funds rate because of the continuing credit crunch in the markets. Libor, which has drifted downward recently, is an interest rate charged by banks for short-term loans to each other.
"If Libor doesn't come down, there is no relief" for many mortgage borrowers, says James Bianco, president of Bianco Research LLC, a market-research firm in Chicago.
Borrowers who should see immediate benefits from the Fed cut are those holding loans tied to U.S. banks' prime rate. Consumers can contact their lenders to inquire how their rates are calculated. Many banks cut their prime rates by half a percentage point after yesterday's Fed move.
Here is a look at what the Fed's action means for consumers:
• Homeowners. The rate cut is good news for borrowers with home-equity lines of credit, and savings could show up as soon as the next monthly statement. Borrowers looking for a new fixed-rate home-equity loan could also see lower rates. There are likely to be regional differences, with lenders most likely to cut rates on these loans in areas where the housing market is healthy and the local economy is robust, says Doug Duncan, chief economist of the Mortgage Bankers Association. Before the Fed's latest move, rates on home-equity lines averaged 8.72%, while home-equity loans averaged 8.29%, according to HSH Associates.
But in a twist, the Fed cut could boost rates down the road for 30-year fixed-rate mortgages. These rates are typically influenced by rates on 10-year Treasurys, which have moved lower recently in anticipation of a quarter-point cut in rates and because of a flight to quality in bond markets. But if markets expect a higher level of economic growth than previously anticipated, or a pickup in inflation, borrowers could see "some modest increase in fixed-rates going forward, though not necessarily immediately," Mr. Duncan says.
Recent news has been mixed for borrowers with adjustable-rate mortgages. Borrowers with ARMs that are tied to Treasury averages have benefited from a recent decline in rates. For those who are facing their first rate reset on Oct. 1, "that reset will be less painful than it would have been had it taken place a couple months ago," says Greg McBride, a senior financial analyst with Bankrate.com.
But higher borrowing costs may still be in the offing for homeowners whose adjustables are tied to Libor. Libor is frequently used to set rates for subprime adjustables, loans made to borrowers with scuffed credit. As for non-subprime ARMs, roughly half of these originated in recent years are also tied to Libor, estimates Keith Gumbinger, a mortgage analyst with HSH Associates. Borrowers can determine which index their adjustable is tied to by checking their loan documents.
The rate cut isn't likely to do much for the biggest problem facing the mortgage market: a liquidity crunch that has made it tougher for many borrowers to get a loan. "People have been characterizing this as a bailout for housing, but I don't think that's accurate," says Mr. Duncan of the Mortgage Bankers Association. The rate cut is "much more about the broader economy," while the mortgage market's troubles are "all about credit and property values."
• Savers. Savers could soon see lower payouts on their savings accounts, certificates of deposit and money-market mutual funds. In fact, some banks have already started to reduce their rates or scale back their deals. Bank of America Corp., for instance, recently shortened the maturities on its promotional CDs paying 5% to four months from eight months.
Nevertheless, banks are going to be reluctant to cut rates before their competitors, in part because consumer deposits remain one of the cheapest sources of funds available for the banks, says Bankrate.com's Mr. McBride. In fact, average CD rates have barely budged in recent months with yields on five-, three- and one-year CDs currently at 4%, 3.77% and 3.76%. "That is very uncharacteristic," since CD yields normally move well in advance of a Fed action, he says. "Savers are getting a break."
Average yields on money-market mutual funds, which have been hovering at 5% for about a year, are likely to drop to about 4.5% in the next month, says Pete Crane of Crane Data LLC. But part of the fall in yields may be counteracted by some managers' moves to buy higher-yielding asset-backed commercial paper, he says. As a result, there may be a benefit to shopping around since money managers can differentiate their funds' performance by investing in the higher-yielding securities.
• Credit Cards. Many credit-card customers should soon see some relief. About 85% of all credit cards carry variable rates. But many holders of these cards will see a benefit only if their current rate exceeds any floors established by the issuers, typically around 14% to 15%, below which their rates can't fall. Today, most interest rates are in the 18%-to-19% range.
Since most issuers adjust their pricing on a monthly basis, about half of all variable-rate cards should see an adjustment in October, with the rest in November, says Robert McKinley, chief executive of CardWeb.com. "Consumers could find some money in their pockets in about a month." The half-percentage-point drop in rates should result in a savings of about $30 a month for the typical household, which carries a median credit-card debt of $7,000, he says.
• Auto Loans. A rate cut isn't likely to have a big impact on new-car loans in part because more than half of all auto loans are already offered at reduced rates due to heavy manufacturer incentives, says Art Spinella, president of CNW Marketing Research Inc. But the Fed's move could make it cheaper to get a used-car loan because many people turn to banks and credit unions to finance their purchase, he says.
Still, consumers could start seeing better financing deals if the Fed continues to cut rates. Auto-loan rates, generally tied to the movement in Treasurys, already had started to ease given the recent drop in Treasury yields. Average rates on five-year new-car loans are 7.72%, versus 7.81% on July 4, according to Bankrate.com.
• Student Loans. Students with private, variable-rate student loans pegged to the prime rate may see their rates adjust more quickly than borrowers with loans tied to Libor. (Loans pegged to Libor or the prime rate are split about equally.)
But that doesn't automatically mean that borrowers should switch to prime-based loans. Historically, loans pegged to Libor have tended to yield a slightly lower rate than loans tied to prime over the life of the loan, says Mark Kantrowitz, publisher of FinAid.org.
Thursday, September 13, 2007
Builder Blow Out Weekend
If you have seen alot of the builders are advertising BIG incentives this weekend. I am not sure why this weekend maybe 1 started and then the rest followed. I visited a new home site today to find another large incentive. Please feel free to call me as I am always previewing new homes as well as resale for all my clients. Bridget 760-533-4551. Bridget@SellingNorthCounty.com
Wednesday, September 12, 2007
3 Stories
In California it is no secret land is at a premium and I believe we are really seeing that now as the amount of 3 story condos seems to be increasing. I have previewed many of these units and I have come to the conclusion you better like stairs. I am curious to see how the sales will do. I personally when I make my next move will be to a single level, but here that is no easy task. I work with many buyers who like single level living as well. I will be surprised to see how there sales go.
Friday, July 27, 2007
Proceed With Caution
There has been much talk in this market about forclosures, short sales and auctions. Many buyers call me and say they want these what they mean is they want a great deal. What most buyers do not know with the lower price tag comes with costs in other places. Because the seller is no longer owning the home the buyer will not receive disclosures meaning information pertaining to the condition of the home. Banks may or may not cover the costs for a termite inspection and repair which means the buyer will need to pay for this in addition they will need to purchase their own home warranty. These are all services normally provided by the seller. When you go to the auction prices are normally brought well below market to generate interest. I have found with some of these auctions the buyer is required is to pay a 5-10% fee on top of the final purchase price of the home. So the buyer is actually covering the normal percentage the seller pays to a real estate agent to sell there home and secure a buyer.
So why do I bring this up?? There is currently 13 months of inventory in San Diego County on the Multiple listing service. With so many homes to choose from find a home where it is still owned by the seller and is reasonable with expectations to selling there home. You can find your "Deal" there!
So why do I bring this up?? There is currently 13 months of inventory in San Diego County on the Multiple listing service. With so many homes to choose from find a home where it is still owned by the seller and is reasonable with expectations to selling there home. You can find your "Deal" there!
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