Archive for the 'The Economy' Category
January 2013 – Looking back at the local real estate market for the past 4 years, the change from a declining market to an improving market is evident. The important values that are used to track market performance are price, volume and distressed sales.
Median Price – The modest uptrend in prices that occurred early in 2010 gave way to further declines in late 2010 and early 2011. This decline followed a seasonal pattern but was larger than normal. Median prices in 2011 were essentially unchanged, beginning and ending at $227,000. 2012 opened a bit lower at $220,000 and since then the uptrend has been very strong, rising to $245,000 in the 4th quarter, an annualized pace of 15%. Also in 2012, the typical seasonal decrease in 4th quarter prices was instead an increase of 4%.
The current uptrend in prices is strong enough to overcome the typical winter sag.
Unit Volume – Since the low point in Q1 2009, unit volume (homes sold per quarter) has been on a constant upswing. From 120 units in Q1 2009 to over 300 for the last three quarters of 2012, this trend reflects a general recognition by consumers of excellent pricing, the most favorable interest rates in decades, and significant pent up demand. Homes are flying off the shelves 2.5 times as fast as in early 2009, and typical marketing time has been cut in half, from 150 days to about 75. In the popular areas in and around the villages of Grass Valley and Nevada City, correctly priced properties are on the market for only a handful of days.
Volume is showing seasonality, but less so than normal due to strong demand and weak supply.
Distressed Sales – In a normal or rising market, the percentage of distressed sales (Short Sales and REO) is quite low, usually 5% or less. After peaking at 60% in Q1 2011, the trend has been downward and has been below 40% for the last 6 months.
During the last 2 years the distressed inventory has been around 20%, and recently dropped to 18%. The mix has shifted from 50-75% Short Sales and 25-50% REO, to well over 50% REO the last few quarters. This indicates that the flow of distressed properties is drying up at the source (fewer homeowners in trouble) and moving through the system. Our hungry market is devouring the supply of distressed properties and the inventory is shrinking.
Over the last 3 years, these trends have been very valuable in tracking the market and scouting for a recovery. At the end of 2012, we see that these three trends of price, volume and distressed sales have been aligned and pointing towards a recovery for two solid years.
Due to the low inventory, we are experiencing a sellers’ market in much of Nevada County. As prices increase and more people are able to act on their plans and dreams, inventory is expected to rise and bring the market back into a healthier balance.
Paul Sieving is a Realtor® with Summit Realty Group-Virtual Brokerage, a former Director and MLS Chair of NCAOR, was Board Chair of the Grass Valley Chamber of Commerce in 2004, and has served our community as a real estate professional for 12 years. Comments, questions and thoughts are welcome at [email protected] or (530) 274-0906.
Email Marketing Made Simple
If you plan to market your business using email, you need to know a little about email marketing and how it works. You must find a way to avoid the spam filter but also keep youremail marketing campaign effective. Read on to get more great advice on email marketing.
It is very important that when a customer chooses to opt-out of your email marketing campaign, you recognize this and stop sending them emails as quickly as possible. Continual emails to a customer who has opted out, may cause them to feel disrespected and that can harm any email marketing campaign.
Make sure you add a personal touch to your email marketing campaign; they will love the personal attention. Nothing turns off your reader more quickly than a letter that reads like it is just a form intended for the masses. Go beyond just adding their first name! The information you collect at the time of signup should include the location from which they signed up, as well as the reason they signed up. This kind of information can be folded into your email and also instills a proper email marketing campaign.
The more personalized the emails you send your customers are, the more likely they will be to buy from you again. A good email marketing campaign will inform them of exclusive offers and promotions. Send out emails about products they may find enticing. If a reader has already bough
Make sure your emails contain interesting content, there’s nothing worse than a boring or dry email marketing campaign. As well as offering sale items, don’t forget to include useful information into your email marketing strategy. Send subscribers information they can’t find on your site. Also give them deals on whatever products and services you sell. Also send emails to offer bonuses and best wishes for the holidays. Sending emails only when you want to promote a product is short-sighted and can quickly diminish any hopes of an effective email marketing campaign.
It’s Really Not So Hard To Have Successful Email Marketing
As you can see from the article above, the advice given will help your email marketingcampaign be successful, but that is only true if you stick to it. You can improve your bottom line more quickly with this solid advice on email marketing in any running campaign or future project that your have in mind.
Source: Kenneth Johnston
More borrowers turn to credit unions for mortgages
NEW YORK – Dec. 17, 2012 – Borrowers seeking a mortgage or looking to refinance increasingly turn to credit unions. These financial institutions are expected to surpass a record-breaking $100 billion in mortgage loan originations this year.
The growth has mostly been attributed to a surge of refinancers and a growth from consumers’ “disillusionment with big banks,” The New York Times reports.
“We’d be remiss if we didn’t give a shout-out to the major banks for being annoying to consumers and forcing people to seek out other alternatives,” says Bob Dorsa, the president of the American Credit Union Mortgage Association in Las Vegas.
Credit unions are aggressively going after business, says Ed Kovalefsky, the CUC Mortgage Corp. chief operating officer. “They try to be as competitive as possible with regard to rates,” he says.
Credit unions may offer slightly lower closing costs than banks too. Another potential advantage, housing experts note, is that credit unions mostly keep their servicing on all their mortgage loans in-house – an incentive for them to be more responsive to their customers.
However, credit unions’ bigger bite out of the mortgage market may be short-lived.
“Historically, when rates go up and refi goes down, our share and origination volume drops,” Dorsa says. “We’ve made a concerted effort this time to get out in front of Realtors®, so we hope we won’t take as much of a hit production-wise as we have in the past.”
Source: “The Credit Union Alternative,” The New York Times (Dec. 13, 2012)
Rate on 30-year mortgage ticks up to 3.34%
Mortgage experts polled by Bankrate.com this week seem pretty sure that rates will either decline further (50%) or stay the same (42%) over the short term. Only 8% expect an increase.
WASHINGTON – Dec. 7, 2012 – Average U.S. rates on fixed mortgages ticked up this week just slightly above their record lows, keeping home-buying and refinancing attractive to consumers.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan ticked up to 3.34 percent, above last week’s rate of 3.32 percent. Two weeks ago, the rate dipped to 3.31 percent, the lowest on records dating to 1971.
The average on the 15-year fixed mortgage rose to 2.67 percent from 2.64 percent last week. The rate declined to 2.63 percent two weeks ago, also a record low.
Mortgage rates have been near record lows all year. That has helped fuel a modest housing recovery.
Sales of newly built and previously occupied homes are up from a year ago. Builders are more confident in the market and are responding by starting construction on more homes.
Home prices have also increased. A report issued Tuesday by Core Logic showed that a measure of U.S. home prices rose 6.3 percent in October compared with a year earlier. That was the largest yearly gain since July 2006.
Rising prices encourage more people to sell their homes. And they lead to more buying, in part because some start to worry prices could eventually rise further.
Trending up: short sales outside foreclosure
About 29 percent of all Florida home sales during late summer and early fall were short sales granted when the homeowner was not yet in foreclosure, according to a new RealtyTrac measure of non-distressed short sales. That’s an increase of 32 percent from the previous year.
In Palm Beach, Broward and Miami-Dade counties, 21 percent of sales were of properties where the owner was not in foreclosure, but owed more to the bank than the home was worth – a 49 percent annual increase. The difference between the sale price and unpaid mortgage balance in South Florida was an average of $106,712.
Daren Blomquist, RealtyTrac vice president, said this is a new trend that reflects recent federal changes that expand what can be considered a financial hardship and attempts to streamline the short sale process. It’s also likely that banks are more reluctant to file a foreclosure, hoping to avoid years-long foreclosure proceedings in court.
“We’re hearing a lot more about short sales happening outside of foreclosure,” Blomquist said. “Everyone is celebrating that foreclosures are down, which is good, but a lot of the reason for that is distressed homes are being disposed of further upstream.”
Source- Florida Realtors
For the second straight year, the jobs market looks to be slowing into the summer.
Last Friday, in its monthly Non-Farm Payrolls report for May 2012, the Bureau of Labor Statistics reported 69,000 net new jobs created, plus a one-tick rise in the national Unemployment Rate to 8.2%.
2012 is shaping up like 2011, it appears.
Last year, between May and August, the jobs market was decidedly worse as compared to the rest of the year, adding just 80,000 jobs on average per month as compared to 190,000 new jobs created on average during each of the other 8 months.
This year, a similar slowdown may be in store.
Although the May jobs report marks the 20th consecutive month during which the U.S. economy added new jobs, the reported figure fell well short of analyst expectations, which called for 150,000 net new jobs last month.
In addition, it was found that the previously-reported tallies for new jobs created in March and April were overstated by a total of forty-seven thousand jobs. This lowered the overall net new jobs created last month to 22,000.
Mortgage rates in San Marcos are falling on the news.
Since the jobs report’s release, 30-year fixed rate mortgage rates have dropped below Freddie Mac’s reported 3.75% mortgage rate for borrowers willing to pay 0.7 discount points plus closing costs; and, the 15-year fixed rate mortgage has dropped farther below 3.00%.
The weaker-than-expected data has moved Wall Street investors away from stock markets in favor of the relative safety of bond markets, a market which includes the one for mortgage-backed bonds. When mortgage-backed bonds are in demand like this, it helps to push down mortgage rates nationwide.
That’s exactly what we’re seeing.
Mortgage rates are expected to make new lows this week, in part, because of U.S. employment weakness. Should this year’s jobs market rebound like in 2011, though, look for mortgage rates to climb back shortly.
A question I get asked quite often is “Should we continue to rent or is it beneficial to buy right now?” Well, it depends on the numbers! Back when interest rates and home prices were still sky high, renting is a great temporary solution for persons who want a place of their own. However, things have changed significantly since so let’s analyze the numbers:
As an example, in Santa Ana, a 3 bed 2 bath 1500 SF SFR will rent for about $2,000/mo or more. The same 3 bed 2 bath 1500 SF SFR can be had for $275,000 to $325,000. Let’s see what the numbers look like as far as out of pocket costs and monthly payments:
|Deposit (out of pocket)||
|Monthly Lease Payment||
|Down Payment (out of pocket)||
|Principle & Interest Payments @ 3.875%||
|Estimated Tax and Insurance||
|Estimated Mortgage Insurance||
|Estimated Monthly Housing Expense||
Most people at this point may realize that for just a little more every month, they can experience the freedom and joy of homeownership. However, there will still be some that may say “well that’s still $158 more than renting!” Yes! That’s true but we’re forgetting that the homeowner may now qualify for an annual income deduction of around $11,000 on their tax returns for the interest paid on their mortgage, one of the many benefits of owning a home. That’s about $2,400 a year or $200 a month in savings for most folks. Mind you that we are Realtors and not CPA’s by any means, so you will need to advise your prospective buyers to consult with a CPA regarding tax related questions. However, the benefit of owning vs. buying is quite clear given the unique circumstances today where both prices and interest rates are incredibly low. Some of our thirty year products today are as low as 3.375%!
Renters need a decent credit to lease a place. If their credit is good enough for leasing, chances are, it’s probably good enough for a purchase. Can you name a few renters within your sphere of influence who may need your help?
I will be glad to answer any questions or comments you may have. Please feel free to shoot me an email at [email protected]. Stay tuned for my cash-flow analysis of investment opportunities today!
Been shopping for a mortgage rate? You may want to lock something down. Tomorrow morning, mortgage rates are expected to change. Unfortunately, we don’t know in which direction they’ll move.
It’s a risky time for California home buyers to be without a locked mortgage rate.
The action begins at 8:30 A.M. ET Friday. This is when the government’s Bureau of Labor Statistics releases its April Non-Farm Payrolls report.
The monthly Non-Farm Payrolls report is more commonly known as “the jobs report” and provides a sector-by-sector breakdown of the U.S. employment situation, including changes in the Unemployment Rate.
In March 2012, the government reported 120,000 net new jobs created — half the number created during the month prior, and the third straight month of declining job creation. The Unemployment Rate fell one-tenth of one percent to 8.2%.
For April, economists expect to see 160,000 net new jobs created, and no change in the national Unemployment Rate.
Based on the accuracy of those predictions, mortgage rates in Oceanside are subject to change. If the actual number of jobs created in April exceeds economist expectations, mortgage rates should rise. Conversely, if the actual number of jobs created falls short, mortgage rates should drop.
Job growth’s link to mortgage rates is straight-forward. Jobs are an economic growth engine and mortgage rates are based economic expectation. Therefore, as the number of people entering the U.S. workforce increases, so do Wall Street’s growth projections for the economy. When that happens — especially in a recovering economy such as this one – mortgage rates tend to rise.
So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has created jobs for 18 straight months, a winning streak that has added 2.9 million people to the U.S. workforce. If that winning streak continues and expectations are beat, mortgage rates are likely to rise off their all-time lows, harming home affordability in Ranch Del Oro, among other areas.
Americans continue to get back to work.
Last Friday, in its Non-Farm Payrolls report for the month of March, the Bureau of Labor Statistics announced 120,000 net new jobs created, plus combined revisions in the January and February reports of +4,000 jobs.
The March report marks the 18th straight month of job growth nationwide — the first time that’s happened in 5 years.
The Unemployment Rate dipped in March, too, falling one-tenth of one percent to 8.2%. This is its lowest national Unemployment Rate since February 2009.
Clearly, the jobs market is moving in the right direction. Yet, after the Non-Farm Payrolls report was released Friday morning, stock markets dropped and bond markets gained — the opposite of what a casual market observer would expect.
It happened because, although job growth was strong, Wall Street decided it just wasn’t strong enough. The market expected 200,000 jobs created in March at least and the actual reported figure fell short.
Lucky for you, Wall Street’s pain is Main Street’s gain. After the jobs report was released, mortgage rates immediately dropped to a 3-week low, making homes more affordable in California and throughout all 50 states.
The market’s reaction is an excellent example of how important jobs data can be to home affordability — especially in a recovering economy.
The economy shed 7 million jobs between 2008-2009 and has since added more than half of them back. Wall Street pays close attention to job creation because more working Americans means more consumer spending, and more consumer spending means more economic growth.
Rate shoppers caught a bit of a break on the March payroll data. By all accounts, the labor market recovery in underway and, as it improves, higher mortgage rates are likely nationwide. For now, though, there’s a window for low mortgage rates that buyers and would-be refinancing households can try to exploit.
If you’re actively shopping for a home or a mortgage, today’s mortgage rates may be at “last chance”-like levels. Once rates rise, they’re expected to rise for good.
If you’re out shopping for a home this week, or trying to lock a mortgage rate, with Friday comes home affordability risk. Consider locking your mortgage rate today.
The March Non-Farm Payrolls report is due for release Friday morning and mortgage rates are expected to move. Unfortunately for the home buyers and rate shoppers of San Marcos , we can’t know in which direction that will be.
The prudent play may be to lock your mortgage rate today.
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called “the jobs report”, the release is a bona fide market-mover, month after month.
Depending on how the March jobs data reads, FHA and conforming mortgage rates could rise — or fall — by a measurable amount post-release. This is because today’s mortgage market is closely tied to the economy, and the economy is closely tied to job growth.
The connection between jobs and mortgage rates is basic.
More workers leads to higher levels of consumer spending nationwide and consumer spending accounts for the majority of the U.S. economy.
In addition, when more workers are paid, more taxes are paid, too. Local, state and federal governments collect more monies when payrolls are rising which, in turn, benefits projects that purchase new goods and services, and, in many cases, results in the hiring of additional personnel.
Job creation can be a powerful, self-reinforcing cycle.
Between 2008 and 2009, the economy shed 7 million jobs. It has since recovered half of them. Friday, analysts expect to count another 200,000 jobs created. If the actual number of jobs created exceeds estimates, look for stock markets to gain and bond markets to lose. This leads to higher mortgage rates — especially with the Federal Reserve zeroed in on the labor market.
If the actual number of jobs created in March falls short of expectations, however, mortgage rates may fall.
Unfortunately, by the time the report is released, it will be too late to act on it. The release is made at 8:30 AM ET and bond markets are closed for Good Friday.