Category Archives: New and Noteworthy

Market Watch

QUOTE OF THE WEEK… “I don’t care too much what happened in the past. I prefer to focus on what is coming next and I am really looking forward to it.” –Sebastian Vettel, World Champion Formula One driver

INFO THAT HITS US WHERE WE LIVE… It would do us good to not focus too much on the past month’s housing data. Housing Starts were down 16.0% in January, to an 880,000 unit annual rate. But this report really can be blamed on the weather. When it’s wet, cold, and snowy, it’s pretty hard to move dirt. And that was the weather in much of the U.S. Looking forward, many observers see home price increases moderating and inventory building, which should keep buyers interested. Compared to a year ago, the number of homes under construction is up 27% and new Building Permits are up 2.4%, so builders are clearly planning to stay active.

Existing Home Sales were down 5.1% in January, to a 4.62 million annual rate, only slightly below expectations. This was put to both the unusually harsh weather in much of the country and the lack of inventory, which could lead buyers to new home purchases. In fact, there are now just 1.9 million existing homes in inventory, relatively low for our population and the total number of homes. But median prices for existing homes are up 10.7% versus a year ago, which should encourage more sellers to come into the market. Analysts are saying that the underlying trends in housing remain “positive” to “strong.”

BUSINESS TIP OF THE WEEK… Athletes at the Winter Olympics got there by setting very high goals and then persistently pursuing them when setbacks came. Those same actions will get us where we want to go in business.
>> Review of Last Week

NOT BAD… The holiday shortened week saw two stock indexes end a little off and one a little up, so overall it wasn’t a bad time on Wall Street. The Dow slipped but remained above 16,000, and the broadly based S&P 500 also slid but remained within a whisker of its record close on January 15. The tech-y Nasdaq scored its third straight weekly gain. The markets are recovering from their recent slump, as investors are simply taking the disappointing economic data in stride, chalking it up to the unusually severe winter weather. They’re basically looking ahead to what many believe will be a stronger period of economic growth ahead. Let’s hope they’re right!

The Empire Manufacturing Index for the New York region dipped from +12.5 to +4.5 in February, but still signals growth. January Housing Starts and Existing Home Sales were off and the Producer Price Index showed wholesale prices up a little more than expected. But January’s Consumer Price Index matched expectations and gauged inflation up just 1.6% from a year ago. Initial weekly jobless claims dropped by 3,000, while continuing claims grew 37,000 yet remain comfortably under 3 million. The Philadelphia Fed Index of manufacturing dropped from a positive to a negative reading in January but weather was blamed for that slowdown too.

The week ended with the Dow down 0.3%, to 16103; the S&P 500 down 0.1%, to 1836; and the Nasdaq up 0.5%, to 4263.

As stocks moved both ways, Treasuries were flat and the FNMA 3.5% bond we watch slipped a bit, finishing the week down .06, to $100.24. National average fixed mortgage rates edged up in Freddie Mac’s Primary Mortgage Market Survey for the week ending February 20. Their chief economist cited “minutes of the Federal Reserve’s last meeting indicated little possibility of a pause in the central bank’s reduction of bond purchases.” This pushes bond prices down and interest rates up. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… Jumbo loans, whose size exceeds Fannie and Freddie’s conventional limits, showed signs of life in 2013, with $12 billion worth of jumbo mortgages securitized as of September, up from $3.5 billion for all of 2012.
>> This Week’s Forecast

NEW HOME AND PENDING HOME SALES SLIP, GDP SLIDES, CONSUMERS OK… An interesting set of reports this week, expected to show us a no doubt weather-related dip in New Home Sales and Pending Home Sales for January. The Pending Homes number gauges contracts signed on existing homes, so it forecasts sales a few months out. The GDP – 2nd Estimate is predicted to be down, registering only modest economic growth in Q4. But Consumer Confidence and Michigan Consumer Sentiment are expected to show that folks remain undaunted by all this.

Stock and bond markets are closed Monday, February 17, for Presidents’ Day.
>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Feb 24 – Feb 28
Date
Time (ET)
Release
For
Consensus
Prior
Impact
Tu
Feb 25
10:00
Consumer Confidence
Feb
80.8
80.7
Moderate
W
Feb 26
10:00
New Home Sales
Jan
400K
415K
Moderate
W
Feb 26
10:30
Crude Inventories
2/22
NA
0.973M
Moderate
Th
Feb 27
08:30
Initial Unemployment Claims
2/22
335K
336K
Moderate
Th
Feb 27
08:30
Continuing Unemployment Claims
2/15
2.975M
2.981M
Moderate
Th
Feb 27
08:30
Durable Goods Orders
Jan
-1.1%
-4.2%
Moderate
F
Feb 28
08:30
GDP – 2nd Estimate
Q4
2.6%
3.2%
Moderate
F
Feb 28
08:30
GDP Chain Deflator – 2nd Estimate
Q4
1.3%
1.3%
Moderate
F
Feb 28
09:45
Chicago PMI
Feb
56.0
59.6
HIGH
F
Feb 28
09:55
U. of Michigan Consumer Sentiment – Final
Feb
81.5
81.2
Moderate
F
Feb 28
10:00
Pending Home Sales
Jan
-1.0%
-8.7%
Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… The majority of Fed members have said the first rate hike will likely come in the second half of the year. For now, the super low Fed Funds Rate will stay right where it is. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:
Consensus
Mar 19
0%–0.25%
Apr 30
0%–0.25%
Jun 18
0%–0.25%

Probability of change from current policy:

After FOMC meeting on:
Consensus
Mar 19
<1%
Apr 30
<1%
Jun 18
<1%

Adams County Colorado Down Payment Assistance

by: Mari Takeshita

Up to $5000 is available

First time homebuyer class required (will accept CHFA’s on-line classes)

BUYER MUST HAVE EDUCATION CERTIFICATE PRIOR TO WRITING CONTRACT! Certificates are good for 9 months

$203,000 purchase price limit

Closing happens in Adams County office day before closing

Buyer must have 1% of their own funds into transaction (CANNOT BE GIFTED but can include appraisal, inspection and earnest money)

NO CASH BACK AT CLOSING

Must include everyone’s income in the household

Income guidelines:

Family of one:   $42,950

Family of two:   $49,100

Family of three:                $55,250

Family of four:   $61,350

Family of five:    $66,300

Family of six:      $71,200

Family of seven: $76,100

Will allow MCC to help in ratios (maximum 33%/44%)

Buyer must meet for housing counseling with ACHA and buyer will provide all documentation to ACHA except appraisal and lender forms

Must allow 3 weeks for closing transactions

They require 48 hours to review the HUD

Transcripts are acceptable

Will only lend money buyer needs – doesn’t require you use the full $5000 (as was previously required with the $7000 assistance)

This is a grant forgiven over 5 years with no interest charged

Anyone wanting to participate must attend the training class with Adams County.  Contact Enrica Bustos at 303-227-2059 or e-mail ebustos@achaco.com and you can have buyers contact her to set up appointments as well.

Can use this program behind CHFA towards closing costs and prepaids.

 

Market Watch

QUOTE OF THE WEEK… “The only thing that should surprise us is that there are still some things that surprise us.” —Francois de La Rochefoucauld, French author of maxims and memoirs
INFO THAT HITS US WHERE WE LIVE
… Some observers were indeed surprised to seesales of new single-family homes jumped 35% from December to January. This put them at a seasonally adjusted annual rate of 543,000, according to the Mortgage Bankers Association (MBA). Their chief economist explained, “While the big jump may appear to conflict with other data,…our Builder Application Survey estimate is consistent with reports of homebuilder sentiment that show strength in the market for new homes.” In line with this, the MBA put mortgage applications for new home purchases up 27% over December.
Also surprising, particularly to those fearing another home price bubble, the National Association of Realtors (NAR) reported that nationally, the NAR housing affordability index shows that, excluding the last five years, homes in the U.S. as a whole are still more affordable than at any time since at least 1981. This was part of an article in the Wall Street Journal, which also said that the NAR found, “…the monthly mortgage payment as a share of median incomes remains unusually low. On a payment-to-income basis, then, home prices still look undervalued.”    BUSINESS TIP OF THE WEEK… Don’t buy into the idea that cold calls are a thing of the past, because today’s customers will always find you. Adopt new marketing approaches, but don’t abandon successful lead generation tactics like cold calls.

>> Review of Last Week

BEST WEEK SO FAR… Stocks posted their best gains of the year last week, as investors who feel good about our economic prospects prevailed over those with the opposite point of view. All three major stock indexes saw solid gains, with the tech-heavy Nasdaq leading the way, hitting its highest level since July 2000. That was right after the Nasdaq closed at its all-time high on March 10, 2000. Those who shrugged off the week’s largely disappointing economic data blamed it on the winter weather, ignoring the fact that many reports are seasonally adjusted!
The disappointments were led by Retail Sales, down 0.4% in January, following a 0.1% dip in December. But if you excluded volatile auto sales, January retail came in unchanged, after increasing 0.3% the month before. Initial weekly jobless claims were up a little and continuing claims were down a bit, so there were no signs of any new strength building in the labor market. Industrial Production and Capacity Utilization were both down in January, but University of Michigan Consumer Sentiment impressed to the upside for February.
The week ended with the Dow up 2.3%, to 16154; the S&P 500 up 2.3%, to 1839; and the Nasdaq up 2.9%, to 4244.
As usual, the stock buying was accompanied by bond selling. This drove prices down, as Treasuries logged their first weekly loss in six and the FNMA 3.5% bond we watch finished the week down .87, to $100.30. Nevertheless, following a week of light economic reports, national average fixed mortgage rates were largely unchanged in Freddie Mac’s Primary Mortgage Market Survey for the week ending February 13. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. DID YOU KNOW?… Barclays Securitized Products Research reports that since 2011-12, there’s been a sustained recovery in the housing market, with prices up 20-25% over Q1 2012 and existing and new home inventories now below pre-crisis levels.

>> This Week’s Forecast

FEWER HOUSING STARTS AND EXISTING HOME SALES, INFLATION OK, A LOOK AT FED MINUTES… Economists expect Housing Starts to moderate in January, along with Existing Home Sales. But, hey, they’re also forecasting inflation to stay in check, both for businesses (Producer Price Index) and for the rest of us (Consumer Price Index). Wednesday, we’ll see if the FOMC Minutes from the Fed’s last meeting reveal anything that new Chairman Janet Yellen didn’t share with Congress last week.
Stock and bond markets are closed Monday, February 17, for Presidents’ Day.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of Feb 17 – Feb 21

 Date Time (ET) Release For Consensus Prior Impact
Tu Feb 18 08:30 NY Empire Manufacturing Index Feb 7.5 12.5 Moderate
W Feb 19 08:30 Housing Starts Jan 964K 999K Moderate
W Feb 19 08:30 Building Permits Jan 980K 986K Moderate
W Feb 19 08:30 Producer Price Index (PPI) Jan 0.2% 0.4% Moderate
W Feb 19 08:30 Core PPI Jan 0.1% 0.3% Moderate
W Feb 19 14:00 FOMC Minutes 1/29 NA NA HIGH
Th  Feb 20 08:30 Initial Unemployment Claims 2/15 335K 339K Moderate
Th  Feb 20 08:30 Continuing Unemployment Claims 2/8 2.973M 2.953M Moderate
Th  Feb 20 08:30 Consumer Price Index (CPI) Jan 0.1% 0.3% HIGH
Th  Feb 20 08:30 Core CPI Jan 0.1% 0.1% HIGH
Th  Feb 20 10:00 Philadelphia Fed Index Feb 7.4 9.4 HIGH
Th  Feb 20 10:00 Leading Economic Indicators (LEI) Jan 0.4% 0.1% Moderate
Th  Feb 20 11:00 Crude Inventories 2/15 NA 3.267M Moderate
F Feb 21 10:00 Existing Home Sales Jan 4.70M 4.87M Moderate

 

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… Fed Chairman Yellen told Congress last week that she was committed to keeping the Funds Rate near zero “well past the time” unemployment falls below 6.5%. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus
Mar 19 0%–0.25%
Apr 30 0%–0.25%
Jun 18 0%–0.25%

Probability of change from current policy:

After FOMC meeting on: Consensus
Mar 19      <1%
Apr 30      <1%
Jun 18      <1%

Market Watch

QUOTE OF THE WEEK… “I was obliged to be industrious. Whoever is equally industrious will succeed equally well.” —Johann Sebastian Bach, German composer
INFO THAT HITS US WHERE WE LIVE
… We who toil in the housing market may not be as successful as the Baroque musical genius, but we should do all right this year. Fannie Mae projects overall economic growth to rise from 2.6% in 2013 to 2.9% in 2014, with housing’s contribution expected to double from 0.3% to 0.6%. Fannie Mae economists also expect a modest rise of about 2% in existing homes sales for the year, and a strong 20.2% gain for new home sales. The median price for an existing home will go up 6.7% on an annual basis, to $208,000, while the new home median price is expected to rise 6.8%, to $283,000. 
The Mortgage Bankers Association (MBA) is forecasting purchase loan originations to reach $677 billion for 2014, 3.8% higher than 2013. Looking back to December, Housing Starts came in down 9.8%, to a 999,000 unit annual rate. But 
single-family starts are up 7.6% from December a year ago. Most significantly, builders started 928,000 homes in 2013, which is up 18.4% over 2012 and the strongest year for new home starts since 2007. New building permits were down 3.0% In December, to a 986,000 annual rate, but single-unit home permits are up 4.5% versus a year ago. Analysts have noted the underlying trends for home building continue to rise.
BUSINESS TIP OF THE WEEK… The first step in achieving growth is to adjust your thinking. Understand that growth is mandatory: if you don’t grow, sooner or later, you’ll shrink.

>> Review of Last Week

UP AND DOWN… The Dow snapped a two-week losing streak and the tech-heavy Nasdaq scored another weekly gain, but the S&P 500 was off a smidge. These mixed stock market performances matched the up and down economic reports of the week. We’re quite used to this now. The downward moves came from data on housing, which showed new construction contracted in December after the November surge. Plus, the preliminary Michigan Consumer Sentiment reading for January fell, while December Retail Sales disappointed, up just 0.2%.
But on closer inspection, if you took out auto sales, Retail Sales were up a decent 0.7% for the holiday month. Job openings rose to 4 million in November, up from 3.93 million the prior month, reaching their highest level in five years. Industrial production went up 0.3% in December and is 3.7% ahead for the year. Manufacturing in New York in December and in the Philadelphia region in January also posted strong gains. Finally, weekly jobless claims fell by 2,000, as the four-week moving average dropped by 13,500 from the previous reading.
The week ended with the Dow up 0.1%, to 16459; the S&P 500 down 0.2%, to 1839; and the Nasdaq up 0.5%, to 4198.
The mixed economic data sent bond prices up, as investors remained wary after the prior week’s negative jobs report. The FNMA 3.5% bond we watch ended the week up .13, to $100.20. National average fixed mortgage rates fell again for the week ending January 16 in Freddie Mac’s Primary Mortgage Market Survey. This was attributed to “signs of a weakening economic recovery.” Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. DID YOU KNOW?… A National Association of Home Builders survey reported that in 2013 the average new home was 300 square feet larger, at 2607 square feet, but the average lot shrank from about a half-acre to one-third of an acre, compared to 2011.

>> This Week’s Forecast

EXISTING HOME SALES HOLD AS LEADING INDICATORS GAIN… This holiday-shortened week is also short on economic reports, which all come Thursday. Somewhat encouraging for the housing recovery, December Existing Home Sales should hold just under the 5 million unit annual rate. The December Leading Economic Indicators (LEI)index is forecast to continue moving ahead. We’ll also watch weekly Initial Unemployment Claims to see if they keep trending lower.
The stock and bond markets are closed Monday, January 20, in observance of Martin Luther King, Jr. Day.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of Jan 20 – Jan 24

 Date Time (ET) Release For Consensus Prior Impact
Th  Jan 23 08:30 Initial Unemployment Claims 1/18 327K 326K Moderate
Th Jan 23 08:30 Continuing Unemployment Claims 1/11 2.900M 3.030M Moderate
Th Jan 23 10:00 Existing Home Sales Dec 4.90M 4.90M Moderate
Th Jan 23 10:00 Leading Economic Indicators (LEI) Dec 0.2% 0.8% Moderate
Th Jan 23 11:00 Crude Inventories 1/18 NA –7.658M Moderate

 

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… Economists expect the Fed’s super low Funds Rate to stay where it is for a while longer. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus
Jan 29 0%–0.25%
Mar 19 0%–0.25%
Apr 30 0%–0.25%

Probability of change from current policy:

After FOMC meeting on: Consensus
Jan 29      <1%
Mar 19      <1%
Apr 30      <1%

Market Watch

by : Sharon Campbell

QUOTE OF THE WEEK… “We don’t know who we are until we see what we can do.” —Martha Grimes, American writer

INFO THAT HITS US WHERE WE LIVE… Last week saw that the housing market can put up some pretty impressive New Home Sales numbers. Sales of new single-family homes shot up in October by 25.4% over September to a seasonally adjusted annual rate of 444,000. This put new home sales up 21.6% versus a year ago. One research firm pointed out that these numbers provide evidence that the edging up of mortgage rates has not seriously hurt the housing recovery.

These analysts noted that October New Home Sales are about equal to those recorded from January to June this year, in spite of the fact that average mortgage rates had drifted up a bit. In fact, the 12-month moving average for new home sales is now at its highest level since March 2009. Inventory is up 25.5% over a year ago, giving buyers more choice, but the faster sales pace dropped the months’ supply to 4.9. For the past 20 years, the average supply of new homes has been 5.7 months. 

BUSINESS TIP OF THE WEEK
… To improve your creativity and mental performance, a study has found that exercise helps. Writers like Henry David Thoreau, Henry James, and Thomas Mann apparently knew this. They all liked a brisk walk before starting work.

>> Review of Last Week

JOBS UP, STOCKS DOWN… A better than expected monthly Employment Report sparked a stock rally on Friday, but it wasn’t big enough to prevent the Dow and S&P 500 from ending down for the week, after eight weekly gains in a row. The good news jobs report featured 203,000 nonfarm payrolls added in November, plus a drop in the unemployment rate from 7.3% to 7.0%, and this one wasn’t driven by a decrease in the labor force participation rate. Investors were delighted to see that the labor market is improving, but not strongly enough to cause the Fed to start tapering its bond buying this month.

Earlier in the week, upbeat economic news had the opposite effect, raising tapering fears that sent stocks down. Better-than-expected data included: the November ISM Index of manufacturing, October New Home Sales, Michigan Consumer Sentiment, and lower-than-expected Initial Unemployment Claims. The GDP-2nd Estimate for Q3 surprised at 3.6%, but analysts cautioned that 1.68% of the uptick came from the change in inventories. The Fed Beige Book opined: “The economy continued to expand at a modest to moderate pace from early October through mid-November.” We’ll take that. 

The week ended with the Dow down 0.4%, to 16020; the S&P 500 down less than a point, to 1805; and the Nasdaq up 0.1%, to 4063.

Fear that the Fed would soon start to taper its bond buying program sent bond prices south. The FNMA 3.5% bond we watch ended the week down .21, to $100.04. Freddie Mac’s Primary Mortgage Market Survey reported national average fixed mortgage rates increased for the week ending December 5. Reasons given were the better jobs and home sales numbers. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?
… Activities the Fed may engage in while tapering include reducing its asset purchases and adjusting the Funds rate. Tapering usually only happens when the Fed feels confident about the economy’s direction.

>> This Week’s Forecast

RETAIL SALES AND INVENTORIES INCH UP, WHOLESALE PRICES HOLD… The forecast says November Retail Sales will edge upward, showing consumers are still doing their part to help the economic recovery. Both overall retail sales and the number excluding volatile auto sales should continue north.

October Business Inventories are also predicted up. Lastly, we note that wholesale inflation (the prices businesses pay) should stay under control, as measured by theProducer Price Index (PPI).

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Dec 9 – Dec 13

 Date Time (ET) Release For Consensus Prior Impact
W
Dec 11
10:30 Crude Inventories 12/7 NA –5.585M Moderate
W
Dec 11
14:00 Federal Budget Nov NA –$172.1B Moderate
Th
Dec 12
08:30 Initial Unemployment Claims 12/7 315K 298K Moderate
Th
Dec 12
08:30 Continuing Unemployment Claims 11/30 2.750M 2.744M Moderate
Th
Dec 12
08:30 Retail Sales Nov 0.6% 0.4% HIGH
Th
Dec 12
08:30 Retail Sales ex-auto Nov 0.3% 0.2% HIGH
Th
Dec 12
10:00 Business Inventories Oct 0.3% 0.6% Moderate
F
Dec 13
08:30 Producer Price Index(PPI) Nov –0.1% –0.2% Moderate
F
Dec 13
08:30 Core PPI Nov 0.1% 0.2% Moderate

 

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… No matter what the Fed does about tapering its asset purchases, experts say that the Funds Rate should remain at its super low level for quite some time. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus
Dec 18 0%–0.25%
Jan 29 0%–0.25%
Mar 19 0%–0.25%

Probability of change from current policy:

After FOMC meeting on: Consensus
Dec 18      <1%
Jan 29      <1%
Mar 19      <1%

Real Estate and the Holidays

by: Mari Takeshita

A buyer wanted to know, “Is it true that the holidays are a good time to buy a home?”

Yes, this could be a very good time to buy for several reasons. Like many businesses, the real estate business slows down during holiday time.

When real estate slows down, mortgages slow down, making it a better time to get a mortgage. That doesn’t mean you will have lax guidelines, rather it means that if there are fewer loans to process, yours can move along faster.

Many sellers tend to avoid the end of the year because of the short days, wintry weather and the belief that buyers are otherwise occupied with the holidays. But those who sell at year-end are often under pressure and highly motivated to cut a deal. There may be tax reasons motivating a seller to sell before the end of the year and that creates a greater opportunity for negotiation.

If you’re a serious buyer, you needn’t be shy about intruding into sellers’ homes at a time normally reserved for family and friends. If a home is for sale, you can assume that the owners want sincerely interested buyers to see it.

Often home prices are lower in December than in other months. Industry reporting services often show home appreciation slows in the fourth quarter, making homes more affordable.

Since it is a busy time of year, you may find that there aren’t many buyers shopping for homes, which is exactly why this may be a good time to house-hunt. Fewer buyers could mean a great opportunity for you to make an offer and negotiate a favorable price.

I’d be more than happy to discuss this further or answer any questions you may have about real estate.

 MARI TAKESHITA
YOUR REALTOR

MARI@REALTORMARI.COM

Market Snapshot

by: Mari Takeshita

Looking at the real estate sales figures for Oct, 2013, the local real estate market continues to thrive even as we enter what is typically the slowest time of the year.  The number of active listings continued their downward trend with a handful of fewer properties on the market this year compared to 2012.

Inventory fell 6% or by nearly 600 homes and condos from September to October 2013.  All other market indicators point to a healthy market as well with under contract and sold listings experiencing double digit increases from 2012.   This is typical this time of the year and will start to increase in early spring.

Also consider that the average property was only on the market 43 days!  Of course this inevitably causes an increase in pricing with home values up 7-8% from 2012!   Month over month, home values remained nearly flat which isn’t bad considering the time of year. A nice home or remodeled home is still selling in a day or two and you will want to be aggressive to preview those homes quickly.

However, the average property is still selling at 98% of list price! A nice or remodeled home is still selling above market and they are appraising for that too. Discuss the market place with your Realtor and be open to the advise given.

Hope to wish you well and that you will be in  your own “home sweet home” in 2014

Market Watch

by : Sharon Campbell

QUOTE OF THE WEEK… “We don’t know who we are until we see what we can do.” —Martha Grimes, American writer

INFO THAT HITS US WHERE WE LIVE… Last week saw that the housing market can put up some pretty impressive New Home Sales numbers. Sales of new single-family homes shot up in October by 25.4% over September to a seasonally adjusted annual rate of 444,000. This put new home sales up 21.6% versus a year ago. One research firm pointed out that these numbers provide evidence that the edging up of mortgage rates has not seriously hurt the housing recovery.

These analysts noted that October New Home Sales are about equal to those recorded from January to June this year, in spite of the fact that average mortgage rates had drifted up a bit. In fact, the 12-month moving average for new home sales is now at its highest level since March 2009. Inventory is up 25.5% over a year ago, giving buyers more choice, but the faster sales pace dropped the months’ supply to 4.9. For the past 20 years, the average supply of new homes has been 5.7 months. 

BUSINESS TIP OF THE WEEK
… To improve your creativity and mental performance, a study has found that exercise helps. Writers like Henry David Thoreau, Henry James, and Thomas Mann apparently knew this. They all liked a brisk walk before starting work.

>> Review of Last Week

JOBS UP, STOCKS DOWN… A better than expected monthly Employment Report sparked a stock rally on Friday, but it wasn’t big enough to prevent the Dow and S&P 500 from ending down for the week, after eight weekly gains in a row. The good news jobs report featured 203,000 nonfarm payrolls added in November, plus a drop in the unemployment rate from 7.3% to 7.0%, and this one wasn’t driven by a decrease in the labor force participation rate. Investors were delighted to see that the labor market is improving, but not strongly enough to cause the Fed to start tapering its bond buying this month.

Earlier in the week, upbeat economic news had the opposite effect, raising tapering fears that sent stocks down. Better-than-expected data included: the November ISM Index of manufacturing, October New Home Sales, Michigan Consumer Sentiment, and lower-than-expected Initial Unemployment Claims. The GDP-2nd Estimate for Q3 surprised at 3.6%, but analysts cautioned that 1.68% of the uptick came from the change in inventories. The Fed Beige Book opined: “The economy continued to expand at a modest to moderate pace from early October through mid-November.” We’ll take that. 

The week ended with the Dow down 0.4%, to 16020; the S&P 500 down less than a point, to 1805; and the Nasdaq up 0.1%, to 4063.

Fear that the Fed would soon start to taper its bond buying program sent bond prices south. The FNMA 3.5% bond we watch ended the week down .21, to $100.04. Freddie Mac’s Primary Mortgage Market Survey reported national average fixed mortgage rates increased for the week ending December 5. Reasons given were the better jobs and home sales numbers. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?
… Activities the Fed may engage in while tapering include reducing its asset purchases and adjusting the Funds rate. Tapering usually only happens when the Fed feels confident about the economy’s direction.

>> This Week’s Forecast

RETAIL SALES AND INVENTORIES INCH UP, WHOLESALE PRICES HOLD… The forecast says November Retail Sales will edge upward, showing consumers are still doing their part to help the economic recovery. Both overall retail sales and the number excluding volatile auto sales should continue north.

October Business Inventories are also predicted up. Lastly, we note that wholesale inflation (the prices businesses pay) should stay under control, as measured by theProducer Price Index (PPI).

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Dec 9 – Dec 13

 Date Time (ET) Release For Consensus Prior Impact
W
Dec 11
10:30 Crude Inventories 12/7 NA –5.585M Moderate
W
Dec 11
14:00 Federal Budget Nov NA –$172.1B Moderate
Th
Dec 12
08:30 Initial Unemployment Claims 12/7 315K 298K Moderate
Th
Dec 12
08:30 Continuing Unemployment Claims 11/30 2.750M 2.744M Moderate
Th
Dec 12
08:30 Retail Sales Nov 0.6% 0.4% HIGH
Th
Dec 12
08:30 Retail Sales ex-auto Nov 0.3% 0.2% HIGH
Th
Dec 12
10:00 Business Inventories Oct 0.3% 0.6% Moderate
F
Dec 13
08:30 Producer Price Index(PPI) Nov –0.1% –0.2% Moderate
F
Dec 13
08:30 Core PPI Nov 0.1% 0.2% Moderate

 

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… No matter what the Fed does about tapering its asset purchases, experts say that the Funds Rate should remain at its super low level for quite some time. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus
Dec 18 0%–0.25%
Jan 29 0%–0.25%
Mar 19 0%–0.25%

Probability of change from current policy:

After FOMC meeting on: Consensus
Dec 18      <1%
Jan 29      <1%
Mar 19      <1%

How much money do I need to purchase a home?

by : Mari Takeshita

It depends on the cost of the home, the type of loan you get and the amount of your down payment.

From the moment you write an offer on a house and it is accepted by the seller, you will need earnest money. This is the first check a buyer will need to write to accompany the offer to buy a home.

Then there’s the cash needed to pay for a home inspection as well as upfront fees for credit reports and an appraisal.

Next comes the down payment, which is the amount of cash required by the lending institution securing your loan. Based on your credit score, debt-to-income ratio and available cash, lenders will advise which loan products, if any, are available and whether a down payment will be necessary. A down payment is separate from earnest money, and depending on the lender, it can be money gifted from parents or other sources.

In some instances, if you qualify as a first-time home buyer, you can receive down payment assistance and closing cost monies from the county you choose to live in. IN THE DENVER METRO area, a lot of first time buyers will use CHFA, which requires you to have a minimum of a 620 Fico score and a minimum of $1000.00 Out of pocket. The balance of the down payment is thru the  CHFA program.

The next consideration when buying is closing costs. These fees are not part of the financed amount of a purchase and can add 3-5 percent on top of the sale price of the home. In  some instances, closing costs can be part of the home purchase negotiations.

Your  Realtor can write an offer asking for the seller to pay your closing costs. You can also ask your lender about assisting in paying the closing costs they the interest rate.

While there are Veterans Affairs loans and some conventional loan products that offer “100 percent financing,” closing costs are still additional costs that can’t be completely wrapped up in the loan. (Note: Some fees, such as the VA funding fee, may be wrapped up in the loan.)

You can also discuss with your Realtor or whoever is representing them in the transaction whether to ask the sellers to cover the cost of a home warranty, HOA fees or other expenditures.

MARI TAKESHITA

303-941-6274

 

Equity in a Home Purchase

  • When you pay rent, you are paying your landlord’s mortgage or adding equity to his or her bank account. However, when you have a home mortgage, you increase your degree of ownership in your home with every payment.
  • A general rule is that if you intend to stay in your property for at least five to seven years, the costs of purchasing the home are more likely to be offset by accrued equity and increased housing value.
  • In the event that equity in the home grows to more than a 20-to-80 percent loan-to-value ratio, you will be able to borrow against your equity in the home. This can be cautiously used should you need capital to pay for major purchases.
  • If interest rates drop, you can refinance your mortgage at more favorable rates, or, once you’ve paid the entire mortgage off, borrow against the equity in your home to fund major purchases such as a second home or your child’s education.
MARI TAKESHITA

YOUR REALTOR

CHERRY CREEK PROPERTIES