Hood Canal Real Estate – www.hoodcanalliving.com – Save Money and Shop for a Home During the Holidays!

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com
The holiday season may seem like the worst time of year to shop for a new home, but it can actually be ideal, particularly if saving money is what you are after.
“Buying ‘off-season’ around the holidays can reduce competition, especially if you live in a market with limited inventory,” says Charlie Young, chief executive of ERA Real Estate. “It’s the classic supply and demand principle: the holiday season is not the peak home buying market, so with fewer people looking to buy, you won’t get involved in a bidding war.”
Rewind a few months and many frustrated buyers were priced out of the market due to bidding wars and all cash offers from investors. While that started to slow down by the fall, some experts expect the real estate buying frenzy to heat back up come spring time. If that happens many of the buyers who were shut out of the market will continue to be so.  
While inventory may not be as high during December, it can be a great time to get a bargain. According to Brendon DeSimmone, Zillow’s real estate expert, homes being shown for sale around the holidays tend to be ones that have been hanging on the market. “If they didn’t sell in the fall, the seller might be a little more motivated and you might have some more purchasing power,” he says. Not to mention anyone who is listing during the holidays is serious and isn’t only testing the waters with a lofty price tag.
Jennifer De Vivo, realtor and owner of De Vivo Realty, says smart buyers can even buy homes at “close out” prices if they wade through the stacks of stale listings leftover from the summer and fall to find good opportunities. De Vivo says homes that have been sitting on the market for more than 60 to 90 days are ripe for “creative negotiation.” What’s more, DiVo says new construction builders are very interested in making deals during the fourth quarter or the end of the year. “Builders like Lennar and KB homes are publicly traded companies who want to show their stockholders a strong fourth quarter finish,” says De Vivo. “To this end don’t be afraid to ask for more when negotiating with your builder.”  She says buyers can negotiate for things like additional closing costs and design credit dollars.
Purchasing a home before the end of the year can also save you come tax time. That’s because you’ll be able to deduct the interest and potentially even some of the closing costs if the sale happens before Jan. 1. 2015. “At the beginning of a loan, most of the monthly mortgage payments are interest so they can get a worthwhile deductible sum,” says Angel Dominguez of The Litvak Team at Urban Compass, the real estate agency.
In addition to getting a good deal and saving money on your taxes, buying a home during the holiday season can be a quicker transaction. These days it’s not far-fetched for a closing to take more than three months, but in December many players in the home buying process are slow and will welcome any business they can get. “Due to less activity in the market, many professionals involved in the process such as appraisers, title professionals, lawyers and mortgage reps may be able to expedite their services, thereby speeding up your transaction – and getting you in your home faster,” says Young.
What’s more, Dominguez says often people will get approved for a mortgage much faster in the November-December time frame. That’s because there is “significantly” less transactions happening so therefore getting approved by a lender is quicker. Another advantage, says Dominguez, is you get to lock in a low interest rate before they potentially move higher in the New Year.  Even the cost of moving can be cheaper if you do it now. Once peak season hits you’ll undoubtedly pay more for a moving company than if you move when many of the trucks are sitting idle.
Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com

Hood Canal Real Estate, Mortgage, and the Economy 12/15/14

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


Interest Rates Back Down Below 18 Month Lows:  If you have read this report over the last couple months you have seen us move to 30 year rates at 4.000%. This week the rates moved a small amount lower. Markets have been pushing rates up and down within a narrow range over that time. It has been a bit of a yo-yo ride as markets do not indicate a solid direction from current status. Stock markets moved down from recent historic highs this week which, was a large reason for the move lower in interest rates. Investors are making bets on future direction of the economy as many believe the world economy seems to be at a tipping point. The long run up in the stock markets, slowing Chinese economy, slowing economies in Europe and proposals by many central banks to prevent recession deflation are all factors suggesting there may be a pause in economic recovery. Those investors with this view point take risk out of their portfolios and buy securities that drive down rates. The bright light among many flickering economies is the US. The light may not be shining as bright as history suggests a recovery should be after a major recession but there is positive movement. The Chinese and European slowdowns do not help the US recovery as much of our business activity involves selling to foreign markets. Oil prices are also an indication that investors are predicting slowing world demand caused by slowing growth. Increased supply of oil is a major factor in the drop in price from over $100.00/barrel to $62.00/barrel but does not explain the severity of the drop. The drop in oil prices are causing more confidence among consumers which should be good for the economy. Current interest rate levels suggest rates will move higher from here by a small amount because, that has been the pattern over the last 2 months. If that pattern breaks then we have a new set of factors dominating market movements and a new analysis will be in order.

Industry News

"Up, up and away." Consumer sentiment and retail sales may have soared higher, but both wholesale inflation and oil prices are on the decline. What does all of this mean for the markets and home loan rates? Read on for the breakdown.

Consumer sentiment surged to 93.8 in December, reaching the highest level since January 2007 and the recent recession. In line with that sentiment, consumers also opened their wallets in November, spending money on goods ranging from cars to clothing as the holiday shopping season got underway. Retail Sales rose by 0.7 percent in November, which was the fastest rate in eight months.

One thing helping both consumer sentiment and retail sales of late is the continued decline in prices at the pump. In fact, the International Energy Agency recently cut its outlook for global oil demand growth in 2015. The markets have been especially volatile in recent weeks, and this news only added to the volatility. Despite the choppy trading in both Stocks and Bonds, home loan rates (which are tied to Mortgage Bonds) remain near historic lows.

Also of note, thanks to the decline in oil, the November Producer Price Index showed that inflation declined at the wholesale level. This is Bond-friendly news, since inflation reduces the value of fixed investments like Bonds, meaning this is also good news for home loan rates.

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

Lenders Reluctant To Quote Rates To Self-Employed Borrowers: A new Zillow report indicates that self-employed borrowers have a more difficult time identifying lending options. They report that self-employed receive 40% fewer loan quotes primary due to lower credit scores.  "Self-employed borrowers will no doubt face headwinds when trying to get a loan. Low credit scores, coupled with a mountain of paperwork lenders must complete specifically for self-employed borrowers, make them unattractive," said Zillow Vice President of Mortgages Erin Lantz. "So, despite self-employed borrowers with high incomes appearing on paper to be better situated to repay their loan, they're often overlooked by lenders. In cases like this, it really pays to shop around." The report goes on to say that self-employed borrowers typically have higher household incomes, Zillow reports that their incomes are 81% higher on average. They also place larger down payments and buy more expensive homes. The down side is they are twice as likely to have credit scores below 680. These factors were the motivation behind RPM’s ‘Tailored Product Line’. There are 4 different products that are targeted at self-employed borrowers. They allow credit scores as low as 660 and loan amounts as high as $4 million. These products offer truly unique solutions to challenges faced by your self-employed clients.

Fannie Mae and Freddy Mac Help Relax Lending Standards: Fannie and Freddie both released new guidelines to lenders on Monday that are intended to clarify what will prevent loan files from being purchased by them. Conforming lenders must underwrite loans to Fannie and Freddy rules in order for them to be eligible for sale. Part of the process for lenders is to predict what will disqualify a loan and that has often been done with a very subjective call on certain borrower parameters. Uncertainty about the potential disqualifications cause many lenders to add ‘overlays’ on top of standard rules in order to prevent having files rejected by the GSE’s. The recent updates by Fannie and Freddy are intended to remove much of the uncertainty by lenders giving them more confidence to approve loans. This is causing a prediction that more borrowers will be approved for loans that have been declined up to this point. I am not sure how this will impact lenders, such as RPM, that are direct sellers and do not currently have overlays on certain products. The bottom line is there is a consensus that qualified borrower are being left out of the market because of poor guidelines and this is being addressed.
Luxury Home Market Strong in Seattle Area:  A recent report showed that sales of $1 million + homes shows Seattle in the top 10.  Much of that strength has come from foreign buyers and investors but data suggests that factor is waning as the sector continues to show strength. Seattle came in at #8 behind the usual high value California markets and Houston. Sales are up over 22% in this sector from last year averaging $1.55 million. All cash sales are plummeting as foreigner sales slow. The strength of this sector is a good sign that the growth is home grown and sustainable due to local economics.
Realty Trac Identifies Potential Bubble Markets: Realty Trac has a report indicating which markets may be a bit overheated and may reverse in value. It analyzed 475 counties which represents 70% of the households. It was based on three early warning signs of a possible home price bubble: If the market was less affordable in October 2014 than its peak price during the 2005 to 2008 housing bubble; if a market was less affordable in October 2014 than its historical affordability average since January 2000; and if a market had a rising foreclosure rate on loans originated in 2014 compared to loans originated in 2013. While 99% of all markets have not returned to the overheated levels before the crash, a full 20% have exceeded their historical affordability averages. Historical averages is home liability is 28% of a median income earner purchasing a median value home. Many of the overheated markets are in areas one would expect. Many California markets are of concern but Texas is showing up as well. In those counties where home prices are approaching or exceeding historical levels, most are still near average affordability due to low interest rates. Boston, a few Texas cities and others are among those markets. Seattle area foreclosure rates are only slightly higher than historical averages. In Seattle the recent price increases would make one might think that they are well on its way to a bubble.  Recent slowdowns suggest buyers have gotten savvier and aren't overbidding at levels we saw a last year.  All three counties in the Seattle metro were more affordable than their historical levels in October. The region did have a slight increase in foreclosure rate in two of the three counties. We have a strong job market with wages that are keeping up with appreciation thanks largely to a growing tech sector. As a result, prices in Seattle are appreciating at an appropriate pace after they slowed from the double digit increases we saw last year.

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

Hood Canal Real Estate, Mortgage, and the Economy

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

Interest Rates Move Off 18 Month Lows:  Interest Rates continue to move within a narrow range with 18 month low points at the bottom and about .125% higher at the top end. Rates have remained amazingly resilient in the face of some significant head winds that would normally move them higher. Rates usually move higher when stock markets move higher. That has not been the case recently. Stock market indexes continue to move higher and are not past historic levels. They are moving higher primarily due to a search for yield by investors all over the world. Stock and bond markets in most parts of the world are languishing under anemic economic conditions as compared with the US. This is causing money to move in to our markets which increases values. This is the same situation with bonds where yields in Europe are low as compared to their economic activity. This is causing money from international sources to buy our bonds which is keeping our interest rates low. This week rates moved higher after a jobs number came in very favorably. The economy continues to show signs of recovery even though it is not robust enough to address concerns of middle class wage earners. Inflation remains low, wages are moving slightly higher, US currency is getting stronger, oil prices are moving lower and consumer confidence is up. All of this exists while economies in Europe, Japan and China are slowing. This gives us a wonderful set of circumstances of low rates and growing economic activity and stock markets in the US. For now we do not see those circumstances changing.  

Industry News

"Start me up." The Rolling Stones. The labor sector has kicked into high gear, with job growth in November far exceeding expectations.
The November Jobs Report showed that 321,000 jobs were created, far above the 230,000 expected. In addition, 44,000 jobs were added to September's and October's figures. This report marks the tenth straight month of 200,000 plus job growth, which is the longest stretch since 1994.

Another positive in the report is that the Unemployment Rate held steady at 5.8 percent. However, there is one thing to watch in future months: Hourly Earnings came in double expectations. If future months show this is the start of a trend, inflation talk could heat up. Remember that inflation is bad for Bonds, as it reduces the value of fixed investments like Bonds. This means inflation can also cause home loan rates to worsen, as they are tied to Mortgage Bonds. But the main takeaway is that the labor market and overall economy continue to improve, and these improvements should provide a boost to the housing market.

Speaking of housing, research firm CoreLogic reported that home prices (including distressed sales) rose by 6.1 percent from October 2013 to October 2014. This is up from the 5.6 percent annual gain recorded in September, halting a seven-month slowdown. Home price gains are at more normal levels now, after the double digit gains seen earlier in the year.

Even though the strong Jobs Report caused volatility in the markets, 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

Fannie Mae and Freddy Mac Help Relax Lending Standards: Fanny and Freddie both released new guidelines to lenders on Monday that are intended to clarify what will prevent loan files from being purchased by them. Conforming lenders must underwrite loans to Fannie and Freddy rules in order for them to be eligible for sale. Part of the process for lenders is to predict what will disqualify a loan and that has often been done with a very subjective call on certain borrower parameters. Uncertainty about the potential disqualifications cause many lenders to add ‘overlays’ on top of standard rules in order to prevent having files rejected by the GSE’s. The recent updates by Fannie and Freddy are intended to remove much of the uncertainty by lenders giving them more confidence to approve loans. This is causing a prediction that more borrowers will be approved for loans that have been declined up to this point. I am not sure how this will impact lenders, such as RPM, that are direct sellers and do not currently have overlays on certain products. The bottom line is there is a consensus that qualified borrower are being left out of the market because of poor guidelines and this is being addressed.
Luxury Home Market Strong in Seattle Area:  A recent report showed that sales of $1 million + homes shows Seattle in the top 10.  Much of that strength has come from foreign buyers and investors but data suggests that factor is waning as the sector continues to show strength. Seattle came in at #8 behind the usual high value California markets and Houston. Sales are up over 22% in this sector from last year averaging $1.55 million. All cash sales are plummeting as foreigner sales slow. The strength of this sector is a good sign that the growth is home grown and sustainable due to local economics.
Northwest MLS Report For October: The new report summarizing October activity shows year-over-year gains in new listings, pending sales, closed sales and prices.
Northwest MLS members reported pending sales last month up nearly 6.9 percent from twelve months ago.  New listings that are coming on the market are receiving a substantially higher than normal sales activity in many market areas. More central markets are still experiencing a large backlog of buyers looking for homes while some outlying markets have seen a slowdown in competition for listings.
Although the pace of sales has slowed somewhat since June, agent managers say demand is steady, with about half of all new listings selling in the first 30 days. Last month,   pending sales of single family homes and condominiums outpaced the number of new listings. A comparison of total inventory shows a drop of nearly 3.7 percent from a year ago. At month end there were 23,501 active listings across 21 counties in the MLS database. That's nearly 900 fewer listings than the year-ago total of 24,391.
Statewide inventory at the end of October stood at 3.24 months, a slight drop from the previous month's figure of 3.7 months. In King County there is less than two months of supply, well below the four-to-six month level that many industry analysts use as a gauge of a balanced market. An exception to that is Snohomish county which had gains in inventory. As the selection expands, buyers who have been on the sidelines are being lured back into the market, according to MLS director John Deely, principal managing broker at Coldwell Banker Bain in Seattle. Deely observed  sellers are now seeing brisk activity and even multiple offers after adjusting their prices after they had languished on the market. This suggests buyers have become more sensitive to price and are watching inventory closely.
Closed sales were over 7500 for October. Prices on those sales were up 7 percent, rising from an area-wide median price of $271,000 to $290,000. Four counties reported double-digit price hikes, led by San Juan County, where prices jumped 18.4 percent, and Snohomish County, with a 17.4 percent year-over-year gain.
Brokers consensus is it is vital to property price listings under current conditions where buyer’s have been wary of recent price increases. Many buyers have to be selective and not enter in to bidding wars as student debt and down payment hurdles cap their ability to compete. Attention on listings suggests buyers are watching for level of interest before making offers hoping to stay out of competitive situations. This often does not work as others seem to do the same thing.
Northwest MLS brokers also commented on distressed sales and upticks in remodeling and new construction.
Local brokers point to the promise of increases in new construction by local builders, a positive economic forecast for the region, and more homeowners surfacing from being "under water" and now able to sell due to increase in appreciation. This creates conditions for 2015  gearing up to be as active if not more so than 2014.
                                                                                                        
Corelogic Report Shows National Strength For October:  Corelogic recent report shows many markets are approaching their historic highs with nine states actually exceeding historic highs. This makes for the 32nd consecutive month of price increases for the overall US. All states saw annual price increases but 27 are nearing full recovery defined as being within 10% of historic highs. Most of the 9 states exceeding their historic highs are in the middle of the country including Colorado, Wyoming, Louisiana, Nebraska, North Dakota, South Dakota, Tennessee, and Texas. Individual markets within states with strong recoveries were noted including Seattle. The report noted moderating price increases with most markets increasing at half their Spring 2014 pace.

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