Archive for December, 2013

10 year US Treasury notes hit 3%

Tuesday, December 24th, 2013

PREDICTION: This will be the headline news in the Money section any day now. 3% is the highest since July, 2011. As we have stated many times the 30 year mortgage interest rate tracks the same highs and lows of the 10 year US Government Treasury notes. If you check with your local mortgage broker, they’ll tell you that mortgage rates are the highest they have been all year. In fact, the last 2 1/2 years. Recent economic statistics have been coming in stronger than projected. That is good news for the economy, but bad news for interest rates. I look for next year to have continued higher rates, average increase in real estate prices and a pickup in sales. Happy New Year to all!! FSBO.COM

Interest Rates

Sellers were once Buyers…

Sunday, December 22nd, 2013

Planning to sell your house the first of the year? You know the reason why. You know where you are moving to. You know the bottom line price you want to sell for. And, you know you want to sell for the most amount of money in the shortest period of time with the least amount of aggravation. You are not quite sure which road to take to accomplish this. Do I use an agent? Do I sell FSBO? Do I ask a family member or friend for their advice? In the end, we know what you want, but you need to consider: What does the buyer want? It doesn’t matter the road you take without understanding what the buyer wants. You were a buyer once, what was your ‘train of thought’. As a buyer you wanted the perfect house in the best location with the lowest price and on your terms. If you are able to offer the buyer what they want, then FSBO is the best road to take. As we have stated in many blogs, the buyers mortgage company and your title company know how to complete the sale. Make sure you get them involved as early as possible and your plan will work out.

Get ready for the Dodd-Frank Act

Tuesday, December 17th, 2013

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, aka: Dodd-Frank Act. This 848 page Act came in response to the financial crisis of 2008. Dozens of changes have been made for those buying a house. A few examples: starting in January, 2014, higher priced mortgage loans will have a maximum debt to income ratio of 43%, down from 45%. (This means less house based on your debt/income ratio), escrow requirements will be in place longer (monthly property tax and insurance payments added to your monthly mortgage bill stays longer), pre-loan counseling requirement for high priced mortgages, new appraisal provisions, loan originator compensation changes, and more.

In response to the financial crisis of 1929,  a far reaching act, the Glass-Steagall Act of 1933 was passed. This was an attempt to establish bank regulations. For over 60 years things were fine, but over the years the banks slowly picked away at this Act. Finally, in 1999 banks were deregulated with the Gramm-Leach-Bliley Act, which repealed Glass-Steagall. Ten years later, a financial/housing crises occurred, which led to big bank bailouts, etc. You know the rest of the story.

Dodd-Frank Act

New Housing crisis for renters

Tuesday, December 10th, 2013

For the 43 million renters in the US, over half pay 30 percent of their incomes in rent. Ten years ago renters paid less than 18 percent of their income in rent according to a Harvard University study. Those 43 million renters represent 35% of all households. While rent payments compared to income has increased dramatically, mortgage payments compared to income is still close to record low.

With mortgage rates still in the 4% range, monthly payments are attractive. According to a Federal Reserve report on Monday, U.S. household net worth hit a record in the third quarter as home prices marched higher. They said household net worth increased $1.9 trillion to $77.3 trillion.

Finally, you saw last months new housing starts jumped up because of the new apartments being built. The trend is clear in the minds of investors. As long as rents are rising, investors will keep buying and building.

‘Buying Alaska’ What’s the price?

Wednesday, December 4th, 2013

My favorite cable channels are the ‘History Channel’, ‘The Learning Channel’ and the ‘Discovery Channel’. Their educational programs offer informative content while you are being entertained. Whether it is a documentary or a ‘reality show’, the stations control the content and script. Just like selling your property. You control the photos, videos and description. I do find it odd, in these days of Internet information and email, that the buyers on the show, ‘Buying Alaska’, are willing to get on an airplane or boat with an agent to look at a property, yet have no idea what the property looks like or the price. The buyers wait until they have seen the property, then in every episode they ask: “What is the price?”. A little unrealistic, wouldn’t you say. Being a real estate guy, I was intrigued with the properties. I am interested in what properties look like in every state. But come on, not knowing the price or having looked at photos just doesn’t make sense.

Alaska FSBO

Alaska Real Estate