Keeping It REAL Estate Newsletter for April 2011

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Great market statistics! 

New-home sales rose in March after weak winter

http://apne.ws/hJQsT2

New-home sales rose 11 percent last month from February to a seasonally adjusted rate of 300,000 homes, the Commerce Department said Monday. That follows three straight monthly declines. Still, the pace remains far below the 700,000 homes a year that economists view as healthy.

Attanasio Properties on You Tube

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Check out my new You Tube channel and like it! 

 

Happy Tuesday!

Dreamy Decks and Patios

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Browse these inspired outdoor gathering spots and gather ideas for your own backyard.

Easter Traditional Meals and Delicious Ham Leftovers

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Happy Easter Everyone!

 

Easter leftovers can be turned into day's worth of delicious soups, casseroles and salads.

Real Estate Outlook: Jobs and Housing

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Housing and the economy are interrelated. One's successes and defeats affect the other. And that's just what then National Association of Home Builders want you to know.

Weekly Mortgage Update: Week of 4/11/2011...HERE'S JOE!

This week brings us the release of seven relevant economic reports for the bond market to digest. We are also heading into corporate earnings season, which could lead to fluctuations in the stock markets. If earnings come in lighter than estimates, the stock markets may fall, leading to an influx of funds into bonds. But if earnings and forecasts are strong, the major stock indexes may rally, pulling funds from bonds and leading to higher mortgage rates.



There is no relevant economic news scheduled for release tomorrow. The first report of the week comes Tuesday morning but it is the least important one. February's Goods and Service Trade Balance will be posted early Tuesday morning. This data gives us the size of the U.S. trade deficit, but unless it varies greatly from forecasts, it likely will not cause much movement in mortgage rates. Current forecasts show a $45.7 billion trade deficit.



The first important report will be posted early Wednesday morning when the Commerce Department will release March's Retail Sales data. This piece of data gives us a measurement of consumer spending, which is very important because consumer spending makes up two-thirds of the U.S. economy. Forecasts are calling for a 0.5% increase in sales last month. If we see a larger increase in spending, the bond market will likely fall and mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower Wednesday.



The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET Wednesday. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by region. Since the Fed relies heavily on the contents of this report during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any significant surprises. Generally speaking, signs of strong economic growth or inflation rising would be considered negative for bonds and mortgage rates. Slowing economic conditions with little sign of inflationary pressures would be considered favorable for bonds and mortgage pricing.



The two Treasury auctions are scheduled for Wednesday and Thursday. There is a 10-year Treasury Note sale Wednesday and a 30-year Bond sale Thursday. We could see some weakness in bonds ahead of the sales as investing firms sell current holdings to prepare for them. This weakness is usually only temporary if the sales are met with a decent demand. The results of the auctions will be posted at 1:00 PM ET each day. If the demand from investors was strong, the bond market could rally during afternoon trading, leading to lower mortgage rates. If the sales were met with a poor demand, the afternoon weakness may cause upward revisions to mortgage pricing Wednesday and/or Thursday afternoon.



Thursday’s important data comes when the Labor Department will post March's Producer Price Index (PPI) at 8:30 AM ET. It will give us an important measurement of inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, inflation fears may hurt bond prices since it erodes the value of a bond's future fixed interest payments, leading to higher mortgage rates. A slight increase, or better yet a decline in prices, would be good news for the bond market and mortgage rates. Current forecasts are calling for a 1.0% increase in the overall reading and a 0.2% rise in the core data.



The remaining three economic reports will all be posted Friday morning. This first will be March's Consumer Price Index (CPI). This index is one of the most important pieces of data we see each month. It is similar to Thursday’s PPI but measures inflationary pressures at the consumer level of the economy. If inflation is rapidly rising, bonds become less appealing to investors, leading to bond selling and higher mortgage rates. As with the PPI, there are two readings in the index that traders watch. Analysts are expecting to see a 0.5% increase in the overall readings and a 0.2% rise in the core reading. If we see larger increases, we could get higher mortgage rates Friday.



March's Industrial Production data will be posted at 9:15 AM ET Friday. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for an increase in production of 0.6%. This data is considered to be only moderately important to rates, so it will take more than just a slight variance to influence bond trading and mortgage pricing.



The final release of the week is the University of Michigan's Index of Consumer Sentiment at 9:55 AM ET Friday. Their consumer sentiment index will give us an indication of consumer confidence, which hints at consumers' willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can have a moderate impact on the financial markets. Good news would be a sizable decline from March's 67.5 reading. Current forecasts are calling for a reading of approximately 66.0.



Overall, look for the most movement in rates the middle part of the week. The Retail Sales and CPI reports are the biggest names on the agenda. Either of them can cause significant movement in the markets and mortgage rates, so either Wednesday or Friday will probably be the most active day of the week. Look for the stock markets to influence bond trading and mortgage rates the first part of the week, but we can expect to see the most movement in rates the latter part. I am expecting it to be an active week for the mortgage market, so please maintain contact with your mortgage professional if still floating an interest rate.



If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...







Information courtesy of Joe Patterson, Princeton Capital, (408)674-7438

Will You Be Getting Your IRS Refund If There Is a Government Shutdown?

http://fxn.ws/dSTmqq

IRS Commissioner Doug Shulman assured taxpayers Wednesday that their tax e-filings will not be affected should the government shut down on Friday, the situation is more dire than the explanation he offered. Americans can expect to encounter problems regardless of how they file their taxes because tomorrow close to 1 million government workers will be forced to take unpaid furloughs, crippling government and leaving millions of taxpayers wondering what to do.

As I've said for awhile, once we start to see jobs being added...then I will say the recovery is underway...Looks like some more good news!

http://n.pr/hT4qVF

Fewer people applied for unemployment benefits last week, a sign that layoffs are dropping and employers may be hiring more workers.

The Labor Department said Thursday the number of people seeking benefits dropped 10,000 to 382,000 in the week ending April 2. That's the third drop in four weeks.

As I've said for awhile, once we start to see jobs being added...then I will say the recovery is underway...Looks like some more good news!

http://n.pr/hT4qVF

Fewer people applied for unemployment benefits last week, a sign that layoffs are dropping and employers may be hiring more workers.

The Labor Department said Thursday the number of people seeking benefits dropped 10,000 to 382,000 in the week ending April 2. That's the third drop in four weeks.

Outdoor options for lighting...good timing, can't wait to get outside and enjoy the nice weather...finally!

http://bit.ly/fEAVvk

A trend toward creating "outdoor rooms" has dramatically increased lighting options for homeowners who want to extend their time outside.

Most indoor lighting fixtures — chandeliers, pendant lights, table lamps — now have a counterpart designed for patios or decks.

Weekly Mortgage Update...Here's Joe for the week of April 4th, 2011

This week brings us the release of little relevant economic data for the markets to digest. We will, however, see the minutes from the last FOMC meeting. There are no important monthly economic reports scheduled for release this week, so look for the stock markets to heavily influence bond trading and mortgage rates.



There is nothing of relevance scheduled for tomorrow or Tuesday morning, but Fed Chairman Bernanke will be speaking at a financial conference in Georgia tomorrow evening. Whenever he speaks, the markets pay attention and this one will be no different. However, since the speech is at 7:15 PM ET, we won’t see its impact on the financial and mortgage markets until Tuesday morning. I don’t believe that his words will cause too much movement this time, but the potential does exist, especially since it is an extremely light week in terms of economic releases and other relevant events. Therefore, we should be attentive to what he says.



The first important event comes Tuesday afternoon when the Fed releases the minutes of their last FOMC meeting. Market participants will be looking at them closely. They give us insight to the Fed's current thought process and individual Fed member opinions. Any surprises in the 2:00 PM ET release, particularly about inflation or when the Fed may start raising key interest rates, could cause afternoon volatility in the markets Tuesday and possible changes in mortgage pricing.



The only other data worth mentioning is the weekly release of unemployment figures Thursday morning. This data usually does not impact mortgage rates much, but due to the lack of other data on the calendar this week’s update could influence rates. Analysts are expecting the Labor Department to announce that 385,000 new claims for unemployment benefits were filed last week. This would be a small decline from the previous week. The larger the number, the better the news for the bond market and mortgage rates.



Overall, there are several variables that could make this week very quiet or quite rocky for mortgage shoppers. Tuesday's FOMC minutes could very well be a major market mover or a complete non-factor. In other words, we may have a very calm week ahead of us, or we may see rates move noticeably several days. With no important economic data to drive trading and mortgage rates, bonds may move with stocks. This means large stock gains could lead to bond selling and higher mortgage rates. But stock weakness could lead to mortgage pricing improving for the week. Regardless, a lack of economic data is not reason to let our guard down if still floating an interest rate. Watch the markets closely and proceed cautiously if not locked yet.



Information provided by Joe Patterson with Princeton Capital...(408)674-7438

Sunshines doesn't sell papers, an update in response to recent newspaper articles

The Case Against Case-Shiller (and other lagging housing market indicators)

 

As I opened the morning paper the other day, I saw a story splashed across the business section suggesting that we might be heading into a “double-dip” housing recession based on the latest S&P Case-Shiller index report. What was ironic was that over the past week, I had just finished meeting with my office managers throughout Northern California ­– most of whom were reporting that their local markets were revving up with great activity, and some markets with a real sense of urgency. What gives?

 

The paradox made me think that a lot of people – consumers and real estate reporters alike – may not realize that such monthly reports as the Case-Shiller index and even the very popular DataQuick Bay Area market report are really lagging indicators of the housing market. They are in effect old news by the time they are released. These reports are based on closed sales the previous month that actually began two or three months before in many cases.

 

Take the most recent Case-Shiller report: This study came from closed home sales – not in March or even February – but January. Those same transactions began when consumers agreed to buy the home perhaps as early as the fall. These kinds of reports are a very old “snapshot” of the housing market by the time they get to the news media. This would be like someone opening up their sports section last October and instead of seeing the Giants in the World Series, found our local heroes 10 games out of first because the papers was still reporting the July standings.

 

So what’s a better way to take the current temperature of the market? New sales or pending sales are a much more accurate assessment of what’s happening now because they are a forward-looking indicator. These are sales that have just occurred, but haven’t gone through the 30 days or 60 days necessary to complete escrow. New pending sales offer the best barometer of what's happening at the moment regarding buyer confidence in the housing market; the transactions that will be reported by Case-Shiller and DataQuick a month or two from now.

 

And what’s encouraging to me is that all across the Bay Area, pending sales in March are outpacing the same total last year – in some cases by as much as 200% over March 2010. Our Greenbrae office is a good example. The housing market in March was “on fire” in Central Marin, according to our Greenbrae manager. The office was planning for 26 new sales, but exceeded that with close to 60 sales. He said the office has not had a month like this since the boom in ’07 and even then it did not have such a high number of transactions. That story is echoed by many other offices, from Marin down through the Peninsula and across the Bay.

 

This is not to say that every community and every neighborhood in the Bay Area is seeing a revival in new sales. There are still slow areas that are still challenged, depending on the price point. And even within some cities, certain parts of the market are doing well while others might be soft. And the overall market will continue to be challenged by shadow inventory of distressed properties coming on the market.

 

But my point is that if you read the lagging indicators like the Case-Shiller report you’d think the market is dropping off the cliff. Far from it. We are definitely seeing a tremendous improvement in many parts of the Bay Area, and we’re not alone.

 

According to the National Association of Realtors, the pending home sales index for properties nationwide, a forward-looking indicator, rose 2.1 percent to 90.8, based on contracts signed in February, from 88.9 in January. Lawrence Yun, NAR’s chief economist, said, “Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the home buyer tax credit.”

 

The outlook wasn’t even across all regions, however. The PHSI in the Northeast fell 10.9 percent to 65.5 in February. In the Midwest the index rose 4.0 percent in February to 81.1. Pending home sales in the South increased 2.7 percent to an index of 100.3. While in the West the index rose 7.0 percent to 105.6 and is now 0.6 percent higher than February 2010.

 

“We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5 to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines,” Yun said.

 

One other thought when it comes to housing numbers: It’s important to take the lower median or average sale prices in monthly reports this time of year with a grain of salt.

 

In many markets throughout Northern California, REOs and short sales can make up as much as 20% to 30% of the entry level sales.  While typical homeowners might take a break from the holidays and list (or re-list) their property in January or February, banks don’t take any breaks in November and December. These listings stay on right through the holidays. So a greater percentage of available listings that sell are "distressed" properties at lower price points, bringing the median and average sales prices down for several months in the New Year.

 

Information courtesy of  Rick Turley, President, Coldwell Banker Northern California

Happy Saturday, listing appointment this morning, look for a hot new listing in Holiday!

Happy Saturday, listing appointment this morning, look for a hot new listing in Holiday!

Home Staging: 5 Tips for Sellers

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 It seems that the money and effort I put into updating and staging my apartment was well worth the expense.