As noted in last month's email, the tax credit has expired and related closings have to take place by the end of June. What about July? Are we all just going to be sitting around with nothing to do? I for one (a) hope that's not true and (b) don't believe it to be true. Yes, there are many issues lingering (like dropping prices and an ever-rising tide of foreclosures) but more core items are coming together (like economic growth, increased employment and better rates). If we could just get some common sense underwriting as well as reasonable appraisals, I think we'd be in much better shape! By way of reference, for a great article on the current state of appraisals, click here (great work, Jim!).
Home prices are still dropping, thanks to foreclosures. That isn't a problem for buyers (except as noted in the article above) but it is an issue for sellers. Yes, you can swallow your pride and lose several thousand on a sale in order to save many more thousands on a subsequent purchase, but first you need to find a buyer. What if there is a foreclosure and/or a short-sale around the corner? Unless they are in a hurry to buy, those properties may be more attractive as they can be purchased for pennies on the dollar versus your need to at least pay off your mortgage--therein lies the problem! I have no solution to offer, but at least rates are still incredibly low--the average 30-year is reportedly 4.78%, which is the lowest of the year (compared to December 2009's record low of 4.71%) and more positive news is being reported, except for the BP oil fiasco and European money woes. However, we are benefiting from their problems as investors seek a safe haven in our bonds (which in turn helped our rates). As Europe 'heals' and our recovery continues, however, rates are likely to move higher as investors seek higher returns and focus on riskier investments than our bonds. So go for it now (like all the other consumers applying to refi--currently the highest level since October 2009, per the MBA) and lock in while you still can!
Have a great holiday weekend; THANK YOU to all who serve (or served) in our military! God Bless America!
Friday, May 28, 2010
Tuesday, May 18, 2010
Read this article first; then read this article second. Same data, two different conclusions. On one hand you have Economists; you could say they are biased for the positive as they work for an investment company. As for the AP article, you could slam the author as being part of the evil 'mainstream media'. Who is right? We don't know yet. I for one like the Economists' prediction. Why? Well, other than self-serving cheerleading (e.g. real estate is our business) I do like to hear the positive spin, especially after so many negative news that has come down the pike. As for the AP? My guess is to sell newspapers, but I may be wrong. Who knows? As for noting that home sales will fall in the second half of the year... well, let's just say they are most likely not in our business. Yes, home sales will fall in the Fall of 2010. Why? Sales are typically slower in the Fall, but for the 2009 Tax Credit. So having sales drop in the Fall is not news to anyone in our industry--the Spring is 'where it's at' in terms of sales. Summer is somewhat busy but people are more focused on vacation and keeping the kids entertained. Likewise, most sales are finalized prior to the beginning of the school year so that the kids can be legally enrolled in the proper school. As for the Fall? It's just not that active, worse for the Winter. The bottom line is this--both could easily be right and/or wrong. As noted, I am hoping that the more rosy opinion is correct. Rates are still LOW and the inventory is still high so there are a lot of deals to find. If you want to buy a house, forget the tax credit for now; just ask for $8,000 (or more?) off the sales price! And sellers? Just remember you may lose money on the sale of your home, but think of the concessions you can ask for your replacement purchase? Ah, to be liquid... I'd love a mountain house and some rentals!!!
Friday, May 14, 2010
I had the opportunity to take a survey from our local paper, the AJC. One section asked to rank what I thought was the most important for the Atlanta Metro area. Using their topics, I ranked them as such: Transportation, Quality of Life, Economic Development, Regional Cooperation/Governance, Education and Health Care access and delivery. Why? As I drive up and down I-75 each day, our commute has gone from a 'typical' 45 minute drive to around an hour each evening. WHY? I have no clue. Driver's habits are one thing, volume is another and of course having trucks on the road are another issue (wouldn't that poorly planned 'northern arc' be great right now?). I got to give my 2 cents on education (I wish the teachers were allowed to TEACH), transportation (have GA take over MARTA and push it out to North Point Mall, Cumberland Galleria and the Mall of GA), the regional economy (again, fix transportation, and water woes--why do we allow so much lawn watering?), and quality of life (all of the above!). I gave a lot of thought to my answers; we'll see how they use the info!