Hood Canal Real Estate. Interest Rates on a Wild Ride

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com

Interest Rates Go On A Wild Ride:  After breaking below the best rates since the big increase in May 2013, the market took us on a wild ride this week. The stock market continued to sell off until the end of the week and interest rates spiked down for about 2 hours on Wednesday. In the end rates settled back where they were at the end of the previous week. The focus continues to be on how the stock market behaves as many have expected a ‘correction’ for quite some time. If it is a normal correction we may have seen the worst of it. If there is a large sell off, like many suggest, then more is to come and interest rates will benefit. Many factors seem to be aligning against stocks at this time. The end of QE3, ISIS, Ebola, Ukraine and a significant stall in European Chinese economies. The US economy on its own seems relatively healthy compared with the rest of the world so one may think our markets should remain optimistic but even that has a negative aspect. The strengthening dollar is thought to hurt many companies that do business overseas. At the end of it all one would not expect a big selloff in the stock markets if we look at the real state of companies and the economy but, fear and emotion can be a powerful motivator. We have had those two factors in abundance. On top of that many cite the mantra, ‘Do Not Fight The Fed’. The Fed support is ending this month but the question now is whether that factor is already baked in to the numbers. For now our best guess is rates will remain low and may move lower over the next few months.

Industry News

"I don't know why I go to extremes." Billy Joel. It's been a week of extreme volatility in the markets, though the reasons for this are pretty clear. Read on for details, and what they mean for home loan rates.

The sell-off in Stocks continued in the latest week, pushing Mortgage Bonds considerably higher—and helping home loan rates reach 18-month lows. There are several reasons investors have moved into the safe haven of the Bond markets, including economic and geopolitical concerns abroad, rising Ebola fears, and weak economic data here at home. For example, manufacturing in the New York region plunged in October to its lowest level in six months, while Retail Sales in September were dismal, showing an ease in most consumer spending sectors.

Another major reason Stocks have worsened lately is the upcoming end of the Fed's Bond-buying program. Stocks performed terribly after the first and second rounds of the Fed's Bond-buying program ended, and that pattern seems to be occurring again. This is a key factor that could impact the markets—and home loan rates—in the weeks and months to come. If Stocks continue to worsen, Mortgage Bonds and home loan rates could continue to improve.

Of note in the housing sector, September Housing Starts rose by 6.3 percent from August. However, the gains were led by an 18.5 percent increase in apartment starts, while single family dwellings were up just 1.1 percent. Building Permits, a sign of future construction, came in just below expectations. While these were okay readings, the National Association of Home Builders Housing Market Index was a big disappointment in October, falling five points after consecutive gains in the previous four months. The three main components of the index (which include current sales conditions, expectations for future sales, and a gauge to traffic prospective buyers) all declined.

The bottom line is that home loan rates remain near some of their best levels of the year, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Real Estate Miscellaneous Stats

17 Tips For A Successful Real Estate Career: I thought this was an interesting article.  http://www.inman.com/2014/10/17/17-tips-for-a-successful-career-in-real-estate-sales-2/
September Home Sales Surge in September:   Pending Home Sales in Western Washington surge 13% in September from the same time last year according to the NAR. Listings are also up so inventory only declined 1.2%. Market analysts suggest that there will be a leveling off but not a slow period  in our market activity as long as pricing increases stay at recent lower levels and interest rates do not rise. Our markets are currently out performing national readings. Closed sales for September also were up from last year by 4.6%. King County median value is up 9.5% from last year but, much of this could be due to the strength in the luxury market. OB Jacobi, president of Windermere Real Estate, noted luxury home sales in the Greater Seattle area have been very strong, with agents reporting stiff competition in certain segments of the market, especially for homes over $2 million. “I attribute this to Seattle’s economic boom, which is attracting an increasing number of high-paying, executive level professionals and international interest,” he remarked. Market experts stress the importance of not overvaluing a listing as buyers are informed about fair market pricing. King County supply is at 2.3 months and Snohomish County is at 2.8. International buyers, primarily from Asia, are a big part of local sales mostly on the Eastside. Home prices in Seattle 12% from 1 year ago to $517,000.00. Median prices in Bellevue is up 6.3% to $605,000.00 and Snohomish County was up 8.4% to $330,000.00. Stephen O’Conner with the UW Runstad Real Estate school expects the market to remain hot through the end of the year but says many buyers are still watching on the sidelines.
Existing Home Sales Drop in August:  Many pundits suggest the Real Estate market has cooled and anecdotal evidence suggest the same. The numbers show that, in spite of the August drop, activity remains stronger than earlier in the year nationwide. Sales activity is 5.3% lower than the same time last year for the whole US. Each area within major markets have their own characteristics and more central areas still show strength. Homebuyers should be seeing some more choices and most markets have around 4-5 months of supply. Investors have backed off significantly which should also help primary residence buyers. Cash sales made up 23% of all purchases which is the lowest level since 2009 and only 12% of all sales closed with cash were investors.

Real Estate Analysts Focus On Millennials:  Large numbers of economists have looked at how the Real Estate markets are being affected by Millennial generation member’s behavior. Some reports suggest they are the reason for the recent stagnation while other suggest they will soon be the catalyst for a growing boom in the market. I recently sent out a chart giving data that suggests there is a coming surge from this group but many factors are holding them back. Here are a few recent reports: Why Millennials Are Hurting the Real Estate Recovery” (MarketWatch, May 12) to “Millennial-Driven Housing Boom Could Be On The Way” (Time Magazine, June 28) to “More Millennials Leave Parental Nest, Without Lifting Housing Market” (Trulia, Sept. 16) to “How Millennials Could Be Housing Market Heroes” (USNews.com, Sept. 17). With such contradictory info it is hard to develop a marketing strategy. It does seem that the raw force of demographics will take over at some point. Realtor.com reports that nearly 50% of Millenials viewed Real Estate online in August. Another report suggested that many Millennials are not familiar with low down payment mortgage options and do not think they can buy. Many others are waiting for a recovery in the economy and their wages. Student debt is said to limit their ability and timing to buy. One study said the $1 Trillion student debt load in this group will reduce Real Estate purchases by over 414k units. The Federal Reserve Bank of New Yorkthat found college graduating Millennials, with student debt, are less likely to own a house than those that never attended college. In spite of this about half of all in this group say they will own a home in the next 5 years. Other data suggests that tighter credit standards, pickier buyers and trauma from the Great Recession are making it harder for this group to buy. The bottom line is this group is larger than the Boomers and will be a force in the next few years. 

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com