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Posted on 12 September 2012 | No responses

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Bellevue Real Estate, Mortgage, and Economy 5/13/12

Posted on 13 May 2012 | No responses

Here is the Bellevue Real Estate Report for May 13, 2012:

Mortgage Rates Test Historic Lows : The continuing concerns coming from Europe are causing shock waves through the world economy. People in Europe are insisting on hanging on to a fiscal illusion with expectations set by living for years under Social Democratic governments. Being unwilling to accept that they cannot borrower their way to prosperity and over spend in the process, they are rejecting plans to secure their countries solvency. This is taking the world financial system in to uncharted territory. In the entire history of the 10 yr treasury note there have been three days when the yield was below where it is this week; on Sept 22nd and 23rd and Oct 4th 2011. How much lower US interest rates will decline is hard to handicap; we are like fish out of water when it comes to forecasting markets in the face of the uncertainty and unprecedented crisis in Europe and the implications for the EU and Europe’s banks as well as economic concerns. See European commentary below.

Survey says? Last week’s economic report calendar may have been light, but some important surveys revealed key data to note. Read on for the details…and how home loan rates fared.
As you can see in the chart, the National Association of Realtors (NAR) said that of the 146 Metro cities surveyed, home prices rose in 74 of them in Q1 2012. This is up from 29 cities that saw an increase in home prices in Q4 2011. In addition, the NAR also said that inventories for existing homes fell 22% since this time last year and are down 41% since the peak in mid-2007. While the housing market has a long way to go, this report was a nice step in the right direction.
There was also news from the National Federation of Independent Business, which said that its small business optimism index gained 2% in April as the survey revealed that companies have increased plans for hiring and investing in the future. While companies added new employees at a slower pace in April than in March, the index rose to 94.5 — the highest level since February of 2011. Overall, though, the report showed that our economy is improving but is still fragile. The state of our economy is part of the reason for the improvement in Bonds (and home loan rates, which are tied to Mortgage Bonds) of late.
Another big reason that Bonds and home loan rates have been improving is the fresh round of uncertainty out of Europe. France elected a new president, and this change of the guard represents the ninth EuroZone leader swap since the financial crisis began. Greece is also back in the news and their citizens are not taking to the austerity measures either. The New Democracy government, a pro-bailout party, is having trouble gathering the support to rule the government. This has sparked some safe haven trading into our Bonds, as investors see our Bonds as a safe place for their money.
The events in Europe and potential softening of our economy have resulted in home loan rates remaining near historic lows. That means now continues to be a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.

Europe Has Failed to Produce a Successful Plan: Over this last week elections in Europe show the populations of many countries besides Greece are bucking against austerity plans proposed to bring debt loads in to line. Greek voters roundly rejected the austerity plan placed on them by the ECB while in France voters rejected the idea of severe spending cuts at the expense of jobs and being aligned with Germany’s insistence for increased austerity. In short, no matter that spending cuts are vital to preserve sovereign solvency, people are rejecting the painful reality and choosing the illusion. Europe is now in complete disarray with no plan in the face of the rejections by voters over the weekend. Many experts say Greece is cooked and will default soon. Europe’s economies will continue to decline and there will be defaults of sovereign debts in a number of other countries. It will be years before Europe can right itself, in the meantime the global economic outlook must be lowered in the minds of investors. Money from around the world continues to flood US treasury markets as fears of defaults and uncertainties drive US rates to new historical lows.

Everything looks positive for the US interest rate markets at the moment but most economists surveyed are forecasting the 10 yr note yield will be at 2.25% by the end of June; if they are correct, which can be debated, the mortgage market is at or close to its best levels for months to follow. Regardless of the forecasts, the present level of interest rates remains the best in 60 years. We hear a lot of talk that potential buyers of homes or those wanting to re-finance are waiting for rates to fall more. While anything in this climate is possible, the likelihood of substantially lower mortgage rates is remote. Mainly because at some point at these levels investors will realize that investing in very low interest rates is difficult to justify. The support in bonds now is two-fold; safety as Europe could blow up at any time and what looks like a decline in stocks is increasingly likely. UK GDP declined in the last two quarters. The increasingly serious question for Europe is whether the massive austerity cuts demanded have failed to gain support and are for a number of countries unachievable, leading to further deterioration of economies and dragging other global economies down with it. In the US economists predict Labor Department data this week will indicate U.S. hiring increased in April, though not enough to reduce the jobless rate. Consumer spending climbed in March, but a little weaker than estimates. The concern we have for the 10 yr is that it still has not shown the ability to hold under 1.90% on rallies going back to October.

Real Estate Miscellaneous Stats:

King County Home Prices On The Rise: Lack of supply is making it slim pickings for home buyers in many areas of King County. Median value for April was up 3% from one year ago at $360,000.00. Historic low interest rates and improving employment in our area are causing the researchers at the UW Runstad Center for Real Estate Research says we could see a strong prime real estate season coming this year. Listings are down 38% from last year. Distressed property experts continue to predict a large increase in foreclosed properties coming on the market over the next year but some suggest banks are being more sensitive to keeping a slower supply coming to market in the interest in keeping up values. A tight rental market is causing more people to consider buying. A 3 year low in vacancy rates at 4.6% is causing renters to have less choice and higher prices. Prices remain location dependent as Southwest King county continue to see price declines while Seattle city prices are up 10.4% from one year ago with a median value of $425,000.00. Snohomish County prices are also up about 10% from last year.
Interest Rates Set New Historic Lows: The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.04% from 4.05%, with points decreasing to 0.40 from 0.45 (including the origination fee) for 80% loans. This is the lowest 30-year fixed interest rate recorded in the history of the survey. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.27% from 4.36%, with points increasing to 0.44 from 0.36 (including the origination fee) for 80% loans. This is the lowest 30-year jumbo interest rate recorded since MBA started tracking the series in January 2011. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81% from 3.83%, with points decreasing to 0.52 from 0.61 (including the origination fee) for 80% loans. This is the lowest FHA interest rate recorded in the history of the survey. The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.32% from 3.33%, while points remained unchanged at 0.41 (including the origination fee) for 80% loans. This is the lowest 15-year fixed interest rate recorded in the history of the survey.

February New Home Sales Revised Higher in February; A revision of new home sales for the month showed a sharp increase in the number of new homes sole in February. Many analysts are suggesting the numbers indicate the market is turning as 328K new homes were sold in March and February was revised to 358K.

March housing starts and building permits; starts were expected to be up 0.3%, they fell 5.8% the lowest level since Oct 2011, permits were thought to be -0.9%, they increased 4.5% to 747K the highest level of permits since Sept 2008. The starts headline didn’t impress; however multi-family starts were down 16.9% while single family starts were down just 0.2%. This is a positive sign for residential housing.

March existing home sales expected up 0.7% were down 2.6% to 4.48 million annualized; year over year sales of existing home sales are up 5.2%. Inventory levels declined 1.3% to 2.37 mil homes for sale, a 6.3 month supply. Listed inventory is 21.8% lower than in march 2011. The median price of sales $163,800.00 up 2.5% from March 2011. The tighter inventory is making some predict further price increases in many markets.

March National Association of Realtors pending home sales were expected up +0.5% but jumped 4.1%, abd year over year up +12.8%. This is a very good report. Pending sales are contracts signed but not closed. Contract cancellations have been running high as credit issues continue to drag on mortgage markets.

Not Like The Good Old Days: In 2006 45% or all first time homebuyers used $00.00 down loan options to purchase their homes.

Loan Program Of The Month. Guild Direct To Fannie Program: Guild Mortgage is unusual in that they originate loans and sell the directly to Fannie Mae. Most mortgage banking companies have to sell their loans to another larger banking institution which add their own rules and overlays to the underwriting parameters. This option gives Guild much more underwriting flexibility than almost all other lenders in our area. A recent example of this was a story relayed to me by a realtor who’s client was being denied a loan because he could not find a 2011 W-2 for $48.00. This would not cause a problem for loan approval at Guild. Another example is allowance of gift funds. Standard guidelines have required a borrower to have at least 5% of their own funds for down payment when using gift funds and putting less than 20% down. A Fannie program called My Community allowed for all gift funds with only 3% down. A recent change allows all gift funds with Fannie’s standard 5% down program. Guild can allow this because we sell directly to Fannie. The standard Fannie Mae program has a .5% lower interest rate than My Community which is a large benefit to the borrower.

Bellevue Real Estate Report

Housing Affordability at Record High for Real Estate Ownership!

Posted on 6 May 2012 | No responses

The Bellevue Real Estate Report

Housing affordability is still at a record high, according to the National Association of Realtors (NAR). It is at the highest level since record keeping began in 1970. This is based on the relationship between median home price, median family income and average mortgage interest rate.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said this latest data underscores buyer opportunities in today’s market. “This is the first time the housing affordability index has broken the two hundred mark, meaning the typical family has roughly double the income needed to purchase a median-priced home,” he said. “For buyers who can qualify for a mortgage, now is a very good time to become a homeowner.”

Projections for the remainder of 2012 indicate that this affordability high will continue and rates will remain low. “Housing inventory levels have declined to a point where conditions are becoming much more balanced in much of the country,” Veissi said. “If access to credit improves, we could see a much more meaningful increase in home sales and broader stabilization in home prices with modest gains in areas with stronger job growth.”

Despite these incredible buyer opportunities, builder confidence is down. The National Association of Home Builders (NAHB) reports that builder confidence for newly built, single-family homes declined for the first time in seven months.

“What we’re seeing is essentially a pause in what had been a fairly rapid build-up in builder confidence that started last September,” said NAHB Chief Economist David Crowe. “This is partly because interest expressed by buyers in the past few months has yet to translate into expected sales activity, but is also reflective of the ongoing challenges that are slowing the housing recovery – particularly tight credit conditions for builders and buyers, competition from foreclosures and problems with obtaining accurate appraisals.”

This has been an ongoing concern for many market activists. While housing affordability is at an all-time high, gaining access to credit is a tough road for many would-be buyers. Additionally, some would-be buyers are still wary of the market and are waiting on the sidelines for the economy to improve or market conditions to stabilize.

Regionally, results varied. The Northeast was the only region to see a gain in builder confidence, posting a 4 point gain on the HMI scale. The West remained unchanged, but both the West and South posted declines. Single-family home production held steady for the month. The multi-family sector saw a double digit decline, according to the U.S. Commerce Department.

Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, FL, reported, “While more consumers appear to be seriously considering a new-home purchase, builders remain very cautious about starting new projects until they see more actual sales materializing.

The Bellevue Real Estate Report

Bellevue Real Estate, Mortgage, and Economy 5/5/12

Posted on 5 May 2012 | No responses

Here is the Bellevue Real Estate Report for May 5, 2012:

Mortgage Rates Bounce Around Historic Lows : Mortgage Bond pricing, which determines interest rates, have moved solidly back in to historic territory and appear to be staying there for some time. US Treasury Rates are also back to historic low levels we have seen before. Treasuries are going for their biggest monthly gain since September as slowing U.S. economic growth and concern Europe’s debt crisis is worsening, increased demand for the relative safety of US treasuries. Mortgage bond pricing has benefited by the same factors. Spain going into its second recession since 2009 and economists said U.S. reports this week will show growth in manufacturing and services slowed. Not only Spain, the UK is in a double-dip recession since the 1970s as its longest peacetime slump for a century persists. While the grim prospects of investors finding returns in world stock markets is keeping rates low, there is concern that current low returns in bond markets will drive investors to move out of these assets and take risks elsewhere. This would cause rates to rise. I survey of economists shows most believe interest rates will rise soon due to this factor. With rates at 60 year lows the odds are against them staying here or moving lower. A systemic meltdown in Europe would trump all normal motivations.

Take this job and love it. And the Labor Department’s Jobs Report for April showed that fewer than expected people are able to do this, as fewer than expected jobs were created. Read on for details and what they mean for home loan rates.
The Jobs Report showed that 115,000 jobs were created in April, with 130,000 private sector jobs offsetting government job losses. This number was a disappointment and below expectations. The only silver lining in the report were upward revisions to the previous month’s readings which added 53,000 more jobs than what was previously reported.
The unemployment rate dropped a tick to 8.1% — the lowest since January 2009. However, the decline was mainly due to the labor force shrinking by 300,000, rather than by robust job growth. And as expected, we are starting to hear more and more about the Labor Force Participation Rate (LFPR). The LFPR dropped to 63.6, the lowest ratio since December 1981. Why is this important? The LFPR gives us a clear read of who is working and who is not. And if someone is not participating, then they are probably receiving some sort of social security or unemployment insurance. The bottom line is that it is tough to pay down debt when there are not enough people participating in the labor force.
Overall the Jobs Report was underwhelming and, unfortunately, further accommodative monetary policy or even more Bond buying (known as Quantitative Easing or QE3) will have a very limited effect on job growth. What’s more, the debt drama in Europe continues to escalate, as both Italy and Germany reported higher than expected unemployment rates, while Spain has slipped into its second recession since the financial crisis.
The events in Europe and potential softening of our economy have resulted in home loan rates remaining near historic lows. That means now continues to be a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.
Europe Seems Headed For Protracted Tough Times ; the slow downs in Europe are causing concerns for a slowing world economy. The austerity plans, though necessary, have been forced on these countries with sovereign debt problems to help their economies prevent the suffering of high costs of borrowering but is back-firing in terms of economic health. Before it is over we are likely to see huge push-backs from citizens as wages and jobs are fall. Germany continues to control the situation as they have to sign off on any bail out plans. They are protecting their wealth and not willing to allow itself to be dragged into the problem to deeply. Germany is the key to re-structuring European debt and cold nix a plan that has been set in place for months. If the plan does not work, as currently indicated, the EU, ECB and IMF will have to re-think the debt issues. If they do not, Europe could be headed headed to depression and likely riots in the streets across the region.

Everything looks positive for the US interest rate markets at the moment but most economists surveyed are forecasting the 10 yr note yield will be at 2.25% by the end of June; if they are correct, which can be debated, the mortgage market is at or close to its best levels for months to follow. Regardless of the forecasts, the present level of interest rates remains the best in 60 years. We hear a lot of talk that potential buyers of homes or those wanting to re-finance are waiting for rates to fall more. While anything in this climate is possible, the likelihood of substantially lower mortgage rates is remote. Mainly because at some point at these levels investors will realize that investing in very low interest rates is difficult to justify. The support in bonds now is two-fold; safety as Europe could blow up at any time and what looks like a decline in stocks is increasingly likely. UK GDP declined in the last two quarters. The increasingly serious question for Europe is whether the massive austerity cuts demanded have failed to gain support and are for a number of countries unachievable, leading to further deterioration of economies and dragging other global economies down with it. In the US economists predict Labor Department data this week will indicate U.S. hiring increased in April, though not enough to reduce the jobless rate. Consumer spending climbed in March, but a little weaker than estimates. The concern we have for the 10 yr is that it still has not shown the ability to hold under 1.90% on rallies going back to October.

Real Estate Miscellaneous Stats:

King County Home Prices On The Rise: Lack of supply is making it slim pickings for home buyers in many areas of King County. Median value for April was up 3% from one year ago at $360,000.00. Historic low interest rates and improving employment in our area are causing the researchers at the UW Runstad Center for Real Estate Research says we could see a strong prime real estate season coming this year. Listings are down 38% from last year. Distressed property experts continue to predict a large increase in foreclosed properties coming on the market over the next year but some suggest banks are being more sensitive to keeping a slower supply coming to market in the interest in keeping up values. A tight rental market is causing more people to consider buying. A 3 year low in vacancy rates at 4.6% is causing renters to have less choice and higher prices. Prices remain location dependent as Southwest King county continue to see price declines while Seattle city prices are up 10.4% from one year ago with a median value of $425,000.00. Snohomish County prices are also up about 10% from last year.
Interest Rates Set New Historic Lows: The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.04% from 4.05%, with points decreasing to 0.40 from 0.45 (including the origination fee) for 80% loans. This is the lowest 30-year fixed interest rate recorded in the history of the survey. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.27% from 4.36%, with points increasing to 0.44 from 0.36 (including the origination fee) for 80% loans. This is the lowest 30-year jumbo interest rate recorded since MBA started tracking the series in January 2011. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81% from 3.83%, with points decreasing to 0.52 from 0.61 (including the origination fee) for 80% loans. This is the lowest FHA interest rate recorded in the history of the survey. The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.32% from 3.33%, while points remained unchanged at 0.41 (including the origination fee) for 80% loans. This is the lowest 15-year fixed interest rate recorded in the history of the survey.

February New Home Sales Revised Higher in February; A revision of new home sales for the month showed a sharp increase in the number of new homes sole in February. Many analysts are suggesting the numbers indicate the market is turning as 328K new homes were sold in March and February was revised to 358K.

March housing starts and building permits; starts were expected to be up 0.3%, they fell 5.8% the lowest level since Oct 2011, permits were thought to be -0.9%, they increased 4.5% to 747K the highest level of permits since Sept 2008. The starts headline didn’t impress; however multi-family starts were down 16.9% while single family starts were down just 0.2%. This is a positive sign for residential housing.

March existing home sales expected up 0.7% were down 2.6% to 4.48 million annualized; year over year sales of existing home sales are up 5.2%. Inventory levels declined 1.3% to 2.37 mil homes for sale, a 6.3 month supply. Listed inventory is 21.8% lower than in march 2011. The median price of sales $163,800.00 up 2.5% from March 2011. The tighter inventory is making some predict further price increases in many markets.

March National Association of Realtors pending home sales were expected up +0.5% but jumped 4.1%, abd year over year up +12.8%. This is a very good report. Pending sales are contracts signed but not closed. Contract cancellations have been running high as credit issues continue to drag on mortgage markets.

Not Like The Good Old Days: In 2006 45% or all first time homebuyers used $00.00 down loan options to purchase their homes.

Loan Program Of The Month. Guild Direct To Fannie Program: Guild Mortgage is unusual in that they originate loans and sell the directly to Fannie Mae. Most mortgage banking companies have to sell their loans to another larger banking institution which add their own rules and overlays to the underwriting parameters. This option gives Guild much more underwriting flexibility than almost all other lenders in our area. A recent example of this was a story relayed to me by a realtor who’s client was being denied a loan because he could not find a 2011 W-2 for $48.00. This would not cause a problem for loan approval at Guild. Another example is allowance of gift funds. Standard guidelines have required a borrower to have at least 5% of their own funds for down payment when using gift funds and putting less than 20% down. A Fannie program called My Community allowed for all gift funds with only 3% down. A recent change allows all gift funds with Fannie’s standard 5% down program. Guild can allow this because we sell directly to Fannie. The standard Fannie Mae program has a .5% lower interest rate than My Community which is a large benefit to the borrower.

Bellevue Real Estate Report

Bellevue Real Estate, Mortgage, and Economy 4/28/12

Posted on 28 April 2012 | No responses

Here is the Bellevue Real Estate Report for April 28, 2012:

Mortgage Rates Continue In Historic Territory and Set New Historic Lows: The news out of Europe continues to be a concern for the world economy. See details below. More bad news from Spain, Ireland, Greece and now worries about France are doing what most thought and keeping rates low. The austerity measures to reign in debt are slowing those nations economies which contributes to bad employment numbers and questions as to where growth will come from to pay off the bail out measures. This is causing slowing in China and other exporting Asian counties. The US economy continues to be the bright spot but is anything but robust. These circumstances are creating a consensus that the world economy will be sluggish at best over the foreseeable future. This sentiment is causing investors to seek returns in the US Bond markets which is keeping rates low. The US stock market has been giving reasonable return so rates have not changed significantly. The bond market pricing has not returned to historic low levels but survey interest rates set new records. Lenders may be giving up some profitability to attract business as it has speculated for some time that rates should be lower in the past based on bond pricing. See details below.

“I’m still standing – yeah, yeah, yeah.” Elton John. And after last week’s Fed meeting, Bonds and home loan rates are still standing near record best levels. Read on for details.
After last week’s regularly scheduled meeting of the Federal Open Market Committee (FOMC), Fed Chairman Ben Bernanke acknowledged that conditions in our economy are improving modestly, but he noted that the housing market remains depressed. One example of this is New Home Sales, which fell 7.1% in March to 328K units on an annual rate.
Bernanke also noted that inflation is higher in the short-run due to higher energy costs, but that the Fed expects prices to moderate and remain in check longer-term. Remember, inflation hurts the value of fixed investments like Bonds (including Mortgage Bonds, to which home loan rates are tied)…so inflation staying in check is crucial when it comes to home loan rates remaining near record best levels.
One important subject the Fed didn’t mention in their Policy Statement was another round of Bond buying to stimulate our economy (known as Quantitative Easing or QE3). This wasn’t much of a surprise because — after several moves to prop up the economy — the Fed must see where upcoming economic reports go before venturing to underwrite the economy further. If the housing market remains depressed and the economy doesn’t pick up steam, QE3 could be a very real possibility.
And there was a bit of a sluggish read on our economy last Friday, after the Fed’s mid-week meeting. The advanced (first of three readings) of Gross Domestic Product (GDP) for the 1st Quarter of 2012 came in at 2.2%, well below expectations. This was also well below the 3% final 4th Quarter 2011 GDP reading. Within the report it showed that the personal consumption expenditure inflation reading rose at the fastest pace since the 2nd Quarter of 2011. This is definitely something the Fed is watching closely.
As 2012 continues to unfold, inflation, the housing market, our sluggish economy, and our ever-growing debt are important issues that the Fed and our government need to address. Seeing the debt crisis in Europe escalate must put a sense of urgency on our government to reign in our annual budget deficit and overall debt. This mix of factors will continue to impact the direction in which Bonds and home loan rates move in the weeks ahead.
The good news is that now continues to be a great time to purchase or refinance a home, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.
Europe is in economic chaos as the debts of many countries are dragging its economy down; The Euro nations owe 386 billion euros ($508 billion) in bailouts for Greece, Ireland and Portugal after those nations were forced to seek rescues when their borrowing costs became unsustainable. Concern that Spain and Italy may follow has led their bonds to decline for six weeks, pushing their cost to borrow toward the 7% level. This is considered unsustainable and is the factor that triggered the aid programs to other nations. The EU’s plan for countries in the region to drastically cut spending in massive austerity moves may be back-firing. The demanded cuts put on Greece, now Spain and Italy; not to forget Ireland and Portugal, have caused the economic outlook to worsen sending Europe back into recession and adding concern that the cuts in spending may not be achieved increasing the possibility of sovereign defaults. The deterioration in Europe is further stressed with the French elections where Sarkozy was unable to get enough votes the first time around against his opponent that is against many of the plans agreed on between France and Germany.

Real Estate Miscellaneous Stats:

Case Schiller Index Shows February Home prices down 0.8% on the month: The 20 city composite index continues to show weakness in the national housing sector of the economy. Of these cities 16 had price declines while only 3 had price increases compared with January numbers. The annual decline now measures 3.5% and overall prices have hit a 10 year low point. Some are taking solace in the fact that the seasonally adjusted numbers show the first price increase since April 2011 but S&P says the unadjusted number is more reliable. These macro numbers do not give a complete picture of what is happening in local markets where many areas of these cities are seeing price increases and tight inventory while the outlying area price declines skew the values down for the whole area. Home values in Atlanta, Charlotte, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa all were the worst since the housing bubble burst. Phoenix by contrast has seen prices rise 3.3% on an annual basis, which is the second month of positive 12-month returns and the fifth straight monthly gain. San Francisco: Prices down 0.7% monthly and 4.1% annually. Seattle: Prices down 0.8% monthly and 2.9% annually. Distressed inventory continues to drag the markets down even though there have been limited numbers of homes available in many cities. Banks are said to be stepping up placing foreclosed homes on the market for sale as recent settlements of law suits with many states have removed some restraint that has been in place for many months. Some market analysts predict that foreclosures will be up to 1 million for 2012 from 800000 in 2011.
Interest Rates Set New Historic Lows: The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.04% from 4.05%, with points decreasing to 0.40 from 0.45 (including the origination fee) for 80% loans. This is the lowest 30-year fixed interest rate recorded in the history of the survey. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.27% from 4.36%, with points increasing to 0.44 from 0.36 (including the origination fee) for 80% loans. This is the lowest 30-year jumbo interest rate recorded since MBA started tracking the series in January 2011. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81% from 3.83%, with points decreasing to 0.52 from 0.61 (including the origination fee) for 80% loans. This is the lowest FHA interest rate recorded in the history of the survey. The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.32% from 3.33%, while points remained unchanged at 0.41 (including the origination fee) for 80% loans. This is the lowest 15-year fixed interest rate recorded in the history of the survey.

February New Home Sales Revised Higher in February; A revision of new home sales for the month showed a sharp increase in the number of new homes sole in February. Many analysts are suggesting the numbers indicate the market is turning as 328K new homes were sold in March and February was revised to 358K.

March housing starts and building permits; starts were expected to be up 0.3%, they fell 5.8% the lowest level since Oct 2011, permits were thought to be -0.9%, they increased 4.5% to 747K the highest level of permits since Sept 2008. The starts headline didn’t impress; however multi-family starts were down 16.9% while single family starts were down just 0.2%. This is a positive sign for residential housing.

March existing home sales expected up 0.7% were down 2.6% to 4.48 million annualized; year over year sales of existing home sales are up 5.2%. Inventory levels declined 1.3% to 2.37 mil homes for sale, a 6.3 month supply. Listed inventory is 21.8% lower than in march 2011. The median price of sales $163,800.00 up 2.5% from March 2011. The tighter inventory is making some predict further price increases in many markets.

March National Association of Realtors pending home sales were expected up +0.5% but jumped 4.1%, abd year over year up +12.8%. This is a very good report. Pending sales are contracts signed but not closed. Contract cancellations have been running high as credit issues continue to drag on mortgage markets.

Not Like The Good Old Days: In 2006 45% or all first time homebuyers used $00.00 down loan options to purchase their homes.

Loan Program Of The Month. Guild Direct To Fannie Program: Guild Mortgage is unusual in that they originate loans and sell the directly to Fannie Mae. Most mortgage banking companies have to sell their loans to another larger banking institution which add their own rules and overlays to the underwriting parameters. This option gives Guild much more underwriting flexibility than almost all other lenders in our area. A recent example of this was a story relayed to me by a realtor who’s client was being denied a loan because he could not find a 2011 W-2 for $48.00. This would not cause a problem for loan approval at Guild. Another example is allowance of gift funds. Standard guidelines have required a borrower to have at least 5% of their own funds for down payment when using gift funds and putting less than 20% down. A Fannie program called My Community allowed for all gift funds with only 3% down. A recent change allows all gift funds with Fannie’s standard 5% down program. Guild can allow this because we sell directly to Fannie. The standard Fannie Mae program has a .5% lower interest rate than My Community which is a large benefit to the borrower.

Bellevue Real Estate

Not Much For Rent Available in Downtown Bellevue!

Posted on 22 April 2012 | No responses

If your looking to rent a condo in a Downtown Bellevue high-rise, your search won’t last long. There are only 6 units for rent. I was recently given the task of finding a nice quality 2 bedroom condo for a professional athlete who is going to temporarily call the Seattle area home. When they suggested a 2 bedroom unit in Bellevue our search came to screeching halt. Out of the 6 high-rise units for rent, only 2 of them are 2 bedroom units. It is not a very exciting search when you only have a few units to pick from.

So, much like Seattle’s limited inventory of rentals, Downtown Bellevue offers very few options for someone looking to lease a condominium.

Bellevue Real Estate, Mortgage, and Economy for 4/22/12

Posted on 22 April 2012 | No responses

Here is the Bellevue Real Estate Report for April 22, 2012:

Mortgage Rates Hover : Mortgage rates moved in a tight range this last week the continuing theme of Euro drama versus decent US economic news continues. The sentiment remains that the US economy is improving albeit slower than needed for a recovery in employment. There were some disappointing data points this week in this regard. The main US manufacturing index came in at a very disappointing level yet at the same time retail sales were respectable. Another business indicator was soft and employment numbers were disappointing yet some economic leading indicators show improvement in the near future. Some of what is driving this mixed bag are the slowing economies in Europe driven by government austerity programs. This is seen as slowing growth in China which impacts the world economy. The European problems will not go away as Spain’s bond rates continue to move higher and further threats of a downgrade in France’s credit rating keeps concerns high. One key reason for the decline in rates has been predicated on the Fed possibly doing another QE, as well as the renewed fears over Europe’s debt mess. The US economic outlook, although better, has been dampened a little with employment figures suggesting new hiring is slowing; another easing move from the Fed will not have any direct impact on employment or continued declines in US interest rates. All of these factors are likely to keep interest rates down for some time yet not likely to move them much lower. We are currently 10 basis points from all time lows. If we are to see lower rates it will have to be on increasing fears on Europe’s ability to stem defaults

Last Week in Review:

“Bad news goes about in clogs, good news in stockinged feet.” Welsh Proverb. And we certainly saw both good and bad news in the economic reports released last week. Here are the details…and what they mean for home loan rates.
On the good side, Retail Sales in March rose by a nice 0.8%, as consumers bought all kinds of products across the board. And when stripping out autos, sales still grew. This adds to the increasing trend seen in January and February and is a good sign for our economy, as consumers don’t spend when they aren’t feeling optimistic about their financial situation.
But over in the manufacturing sector it was not as pretty a picture, as both the Empire State Manufacturing Index and the Philly Fed Index came in below expectations. This is largely being attributed to a global slowdown, and experts say that the outlook for our manufacturing remains positive…but just not accelerating at the present time. Things weren’t as pretty in the housing sector either, as both Existing Home Sales and Housing Starts fell in March.
And things in the labor market were verging on ugly, as Initial Jobless Claims spiked sharply higher. The Labor Department reported 386,000 fresh Claims in the latest week, above the 375,000 that was expected…and well above the 350,000 range seen in recent weeks.
Also verging on ugly was news out of Europe. There is growing and very justified concern about Spain’s ability to pay down debt, meet new budget deficit targets, and avoid a bailout or debt restructuring. The Spanish situation has prompted the G-20 (Finance Ministers and Central Bankers of the 20 largest economies) to urge the European Central Bank to do more to contain their debt crisis as it threatens global growth. And let’s not forget that besides Spain, we still have France, Portugal, Ireland and Greece to deal with in future months and years.
So what does all of this mean for Bonds and home loan rates? There will likely be more safe haven trading into the relative safety of the US Dollar and US Bonds (which will benefit Mortgage Bonds, to which home loan rates are tied) as the uncertainty out of Europe escalates. And more bad economic reports here in the United States could add to this safe haven trading into our Bonds, just as more good economic news here would likely benefit Stocks at the expense of our Bonds and home loan rates.
This mix of factors will continue to impact the direction in which Bonds and home loan rates move in the weeks ahead. The takeaway is that home loan rates remain near historic lows and now continues to be a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.

Europe’s debt issues remain, and there is a little relaxation about the possibility of default as EU ministers are calling for the ECB to step up and buy Spain’s bonds to keep their interest rates from increasing more. So far nothing from the ECB but words implying it is “prepared” to act if necessary. The US bond market remains the safe port for investors and has been one of the reasons we have seen US rates fall over the last two weeks. US stock market is rallying this morning on the March retail sales increase, US interest rates are not seeing any selling on the better stock indexes; as long as the debt problems in Europe continue it should keep a bid in US treasuries, thus supporting the mortgage markets.

The world economy will expand 3.5% this year and 4.1% in 2013, the IMF said today in its World Economic Outlook, raising forecasts made in January from 3.3% for 2012 and 4.0% for next year. The U.S. will grow 2.1% this year and 2.4% in 2013, up from 1.8% and 2.2% in the lender’s January projections. The euro area economy is projected to decline by 0.3% in 2012, an improvement from the 0.5% in the IMF’s previous forecast. China is projected to grow 8.2% and Japan 2.0% this year. “The most immediate concern is still that further escalation of the euro-area crisis will trigger a much more generalized flight from risk,” the IMF said. “Geopolitical uncertainty could trigger a sharp increase in oil prices.” A 50% increase in the cost of oil would reduce global output by 1.25%, according to the report.
Real Estate Miscellaneous Stats:

Many Real Estate Markets Are Heating Up: In many local markets across the country, homes are being snatched up as soon as they hit the MLS. These markets tend to be close in to major employment centers where economies are in decent shape or they are very attractive to investors. Some cities are experiencing bidding wars on homes in affordable prices ranges just like the good old days pre-boom. While prices remain flat nationally, these high demand areas are seeing prices start to rise as inventory is down. In Seattle inventory has recently dropped 36%. This is due to a slow down in foreclosures and the inability for many who have lost equity to sell their homes. Competition is raging between first time buyers, investors and foreign buyers; especially in the lower price ranges. These cities are considered the 10 tightest based on change in inventory from Feb 2011 to Feb 2012

1. Denver CO. Inventory down 42%.
2. Portland OR: Inventory down 38%
3. Seattle WA: Inventory down 36%
4. San Jose CA: Inventory down 34%
5. Salt Lake City UT: Inventory down 31%
6. Sacramento CA: Inventory down 30%
7. San Francisco CA: Inventory down 29%
8. Birmingham AL: Inventory down 29%
9. Memphis TN: Inventory down 29%
10. Richmond VA: Inventory down 29%

These numbers are based on a study done by Move Inc for Realtor.com. It is a comparison of the 50 most populated markets in the US.
In the Bay Area a recovery in housing is more advanced than most others.

March housing starts and building permits; starts were expected to be up 0.3%, they fell 5.8% the lowest level since Oct 2011, permits were thought to be -0.9%, they increased 4.5% to 747K the highest level of permits since Sept 2008. The starts headline didn’t impress; however multi-family starts were down 16.9% while single family starts were down just 0.2%.

March existing home sales expected up 0.7% were down 2.6% to 4.48 million annualized; year over year sales of existing home sales are up 5.2%. Inventory levels declined 1.3% to 2.37 mil homes for sale, a 6.3 month supply. Listed inventory is 21.8% lower than in march 2011. The median price of sales $163,800.00 up 2.5% from March 2011.

Not Like The Good Old Days: In 2006 45% or all first time homebuyers used $00.00 down loan options to purchase their homes.

Recent Changes in FHA Guidelines Making Things More Difficult for Homebuyers: FHA has been the loan option so choice for many first time homebuyers ever since the mortgage market melt down. Low down payment, good rates and accommodating credit requirements make it very attractive. Officials at FHA have been attempting to manage the increasing strain on the FHA reserve fund and have had to increase the MI premiums again to accommodate losses experienced by the program. As of April 9th, any FHA case numbers will have an initial up front premium of 1.75% compared with 1% prior to the change. The annual component that gives the monthly payment has increased as well. For loan amounts above 95% LTV the premium goes from 115 basis points to 125. For those loans below 95% LTV it goes to 120 basis points. FHA loans with terms of 15 years or less remain exempt from the annual premium. In another announcement FHA informs of a change in policy regarding collection accounts, FHA previously did not require the payoff of collection accounts up to $1000.00. That has not been changed. Now borrowers will have to make arrangements to pay them off over several months or before closing. Exclusions include victims of identity theft, unauthorized use of accounts or when the accounts are over 2 years old.

Loan Program Of The Month. Guild Direct To Fannie Program: Guild Mortgage is unusual in that they originate loans and sell the directly to Fannie Mae. Most mortgage banking companies have to sell their loans to another larger banking institution which add their own rules and overlays to the underwriting parameters. This option gives Guild much more underwriting flexibility than almost all other lenders in our area. A recent example of this was a story relayed to me by a realtor who’s client was being denied a loan because he could not find a 2011 W-2 for $48.00. This would not cause a problem for loan approval at Guild. Another example is allowance of gift funds. Standard guidelines have required a borrower to have at least 5% of their own funds for down payment when using gift funds and putting less than 20% down. A Fannie program called My Community allowed for all gift funds with only 3% down. A recent change allows all gift funds with Fannie’s standard 5% down program. Guild can allow this because we sell directly to Fannie. The standard Fannie Mae program has a .5% lower interest rate than My Community which is a large benefit to the borrower.

Bellevue Real Estate Report

Bellevue Real Estate, Mortgage, and Economy 4/16/12

Posted on 16 April 2012 | No responses

Here is the Bellevue Real Estate Report for April 16, 2012:

Mortgage Rates Recover : In keeping with the most recent theme of reacting to a balance of European news and developments in the US economy; interest rates had a nice recovery this week. Just as most predicted, the drama out of Europe continues to cause concern. Spain is the country of interest right now with it’s high level of sovereign debt and no growth in their economy. Most analysts have expressed great concerns that austerity programs in most European contries will cause stagnation in their economies which will not allow them to grow their way out of large annual deficits. At the same time the US jobs report was a big disappointment with the creation of new jobs much lower than anticipated. Many analysts continue to predict that any softening in the growth of the economy will cause the Fed to initiate another round of stimulus called QE3 ( Quantitative Easing 3 ). Many suggest that, like many movie sequels, this is a bad idea. Still the markets are responding to the rumor with lower rates.

“Wild thing! You make my heart sing!” The Troggs. And that song lyric is certainly an apt description for the volatility in the markets these days, as the ups and downs have given people things to both sing and scream about. Here’s what happened last week…and how home loan rates were impacted.
Inflation news hit the wires, with reports on both the wholesale and consumer levels. The wholesale-measuring Producer Price Index (PPI) showed that prices remained mostly unchanged during March. Remember, inflation hurts the value of fixed investments like Bonds (including Mortgage Bonds, to which home loan rates are tied)…so the lack of inflation on the wholesale side was good news for Bonds and home loan rates.
Also helping Bonds and home loan rates last week was the tame inflation data from the Consumer Price Index (CPI). The headline reading for March was right in line with estimates. When stripping out volatile food and energy, the Core CPI was also inline with estimates…but the year-over-year number was 2.3%, just slightly higher than the previous reading of 2.2%. While this raises eyebrows a bit, the Fed is still reiterating that inflation remains subdued. That being said, if the Core CPI continues to rise…which is indicative of inflation and as you can see in the chart…Bonds and home loan rates will have a tough time improving much further, regardless of other factors.
One key factor to keep an eye on is the labor market, as Initial Jobless Claims increased 13,000 to 380,000 for the week ending April 7. This marks the highest level since January, and the second highest reading for 2012. The Fed has acknowledged that job creations are short of their goals. In fact, last week Federal Reserve Vice Chairman Janet Yellen said that weakness in housing, the European debt crisis, and government spending cuts are likely to slow the pace of recovery and expansion. She did state that the Fed has plenty of stimulus tools to use, if economic conditions warrant another round of quantitative easing.
The bottom line is that many factors will impact the direction in which Bonds and home loan rates move in the weeks ahead. The good news is that home loan rates remain near historic lows and now continues to be a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.

Just when Europe’s debt crisis was moving off the front page, it has jumped back in to the spot light. More bad news out of Spain is causing an increase in their bond market rates and roiling markets again. Recent bond sales in Spain had been meeting with better than expected demand and at slightly lower rates than analysts were thinking. This was helping to keep the rate at which the country borrows at a lower point. Now Spain is seeing rates increase as investors decline to buy at the levels seen a week ago; the debt crisis is once again being brought into question. The European Union debt problems won’t go away, it will likely continue to surface and fade then resurface for a long time, each time it will impair equity markets and add support to the bond markets.
The focus on US Inflation Continues: While the market keeps an eye on the improvement in the economy, those nervous about the level of US debt have a close eye on inflation. There were developing trends that was providing a concensus, although since Easter holiday week may have distorted the data somewhat .Inflation is higher than is comfortable for many. The jump in the core PPI has been dismissed due to the increase in light truck prices. Inflation isn’t much of an immediate issue now. Janet Yellen, Vice Chair at the Fed commented; “I consider a highly accommodative policy stance to be appropriate in present circumstances,” Yellen said yesterday in a speech in New York. She also said that allowing the Fed’s program to extend the maturity of the assets on its balance sheet to expire in June wouldn’t amount to a policy tightening. She agrees with Bernanke by saying unemployment will decline “only gradually.” “Over the next several years, I anticipate that we will fall far short in achieving our maximum employment objective, ”Yellen said. Still, “considerable uncertainty surrounds the outlook, and I remain prepared to adjust my policy views in response to incoming information.”

Real Estate Miscellaneous Stats:

Many Real Estate Markets Are Heating Up: In many local markets across the country, homes are being snatched up as soon as they hit the MLS. These markets tend to be close in to major employment centers where economies are in decent shape or they are very attractive to investors. Some cities are experiencing bidding wars on homes in affordable prices ranges just like the good old days pre-boom. While prices remain flat nationally, these high demand areas are seeing prices start to rise as inventory is down. In Seattle inventory has recently dropped 36%. This is due to a slow down in foreclosures and the inability for many who have lost equity to sell their homes. Competition is raging between first time buyers, investors and foreign buyers; especially in the lower price ranges. These cities are considered the 10 tightest based on change in inventory from Feb 2011 to Feb 2012

1. Denver CO. Inventory down 42%.
2. Portland OR: Inventory down 38%
3. Seattle WA: Inventory down 36%
4. San Jose CA: Inventory down 34%
5. Salt Lake City UT: Inventory down 31%
6. Sacramento CA: Inventory down 30%
7. San Francisco CA: Inventory down 29%
8. Birmingham AL: Inventory down 29%
9. Memphis TN: Inventory down 29%
10. Richmond VA: Inventory down 29%

These numbers are based on a study done by Move Inc for Realtor.com. It is a comparison of the 50 most populated markets in the US.

Fannie Mae and Freddy Mac Continue to Resist Principle Reduction Modifications: While there is an increasing trend toward principle reductions by private mortgage holders for mondifications, Fannie and Freddy continue to refuse this option. Of all the loan modifications granted in the private market; 16% received debt reduction by private holders and 25% by bank portfolio managers. Lenders continue to struggle as 12.1% of all mortgages were delinquent as of the end of last year. Debt reduction is said to be one of the best tools to help reduce those at risk but the government GSE’s say they cannot use this option as it would cost the US tax payer $100 billion at a time when deficits are at history highs. Foreclosures will be with us for a while as the rate increased in the 4th quarter by 22%.

Recent Changes in FHA Guidelines Making Things More Difficult for Homebuyers: FHA has been the loan option so choice for many first time homebuyers ever since the mortgage market melt down. Low down payment, good rates and accommodating credit requirements make it very attractive. Officials at FHA have been attempting to manage the increasing strain on the FHA reserve fund and have had to increase the MI premiums again to accommodate losses experienced by the program. As of April 9th, any FHA case numbers will have an initial up front premium of 1.75% compared with 1% prior to the change. The annual component that gives the monthly payment has increased as well. For loan amounts above 95% LTV the premium goes from 115 basis points to 125. For those loans below 95% LTV it goes to 120 basis points. FHA loans with terms of 15 years or less remain exempt from the annual premium. In another announcement FHA informs of a change in policy regarding collection accounts, FHA previously did not require the payoff of collection accounts up to $1000.00. That has not been changed. Now borrowers will have to make arrangements to pay them off over several months or before closing. Exclusions include victims of identity theft, unauthorized use of accounts or when the accounts are over 2 years old.

Good Article On Short Sale Advice: http://realestate.msn.com/short-sell-your-home-to-avoid-foreclosure .

Loan Program Of The Month. Home Affordable Refinance Program ( HARP ): Fannie Mae and Freddy Mac have rolled out their new revised version of the popular refinance program that allows borrowers who have lost equity to refinance without the requirement of obtaining mortgage insurance. In some cases refinancing is possible with negative equity with no limit on loan to value ratios due to 2nd mortgages. Eligible loans must be Fannie or Freddy loans and have been originated before May of 2009. Expanded appraisal waivers, transfer of existing mortgage insurance policies by non-originating institutions and expanded underwriting guidelines are also a part of the new version of the program. These changes are expected the help a large number home owners.

Bellevue Real Estate Report

Bellevue Real Estate, Mortgage, and Economy 4/16/12

Posted on 16 April 2012 | No responses

Here is the Bellevue Real Estate Report for April 16, 2012:

Mortgage Rates Recover : In keeping with the most recent theme of reacting to a balance of European news and developments in the US economy; interest rates had a nice recovery this week. Just as most predicted, the drama out of Europe continues to cause concern. Spain is the country of interest right now with it’s high level of sovereign debt and no growth in their economy. Most analysts have expressed great concerns that austerity programs in most European contries will cause stagnation in their economies which will not allow them to grow their way out of large annual deficits. At the same time the US jobs report was a big disappointment with the creation of new jobs much lower than anticipated. Many analysts continue to predict that any softening in the growth of the economy will cause the Fed to initiate another round of stimulus called QE3 ( Quantitative Easing 3 ). Many suggest that, like many movie sequels, this is a bad idea. Still the markets are responding to the rumor with lower rates.

“Wild thing! You make my heart sing!” The Troggs. And that song lyric is certainly an apt description for the volatility in the markets these days, as the ups and downs have given people things to both sing and scream about. Here’s what happened last week…and how home loan rates were impacted.
Inflation news hit the wires, with reports on both the wholesale and consumer levels. The wholesale-measuring Producer Price Index (PPI) showed that prices remained mostly unchanged during March. Remember, inflation hurts the value of fixed investments like Bonds (including Mortgage Bonds, to which home loan rates are tied)…so the lack of inflation on the wholesale side was good news for Bonds and home loan rates.
Also helping Bonds and home loan rates last week was the tame inflation data from the Consumer Price Index (CPI). The headline reading for March was right in line with estimates. When stripping out volatile food and energy, the Core CPI was also inline with estimates…but the year-over-year number was 2.3%, just slightly higher than the previous reading of 2.2%. While this raises eyebrows a bit, the Fed is still reiterating that inflation remains subdued. That being said, if the Core CPI continues to rise…which is indicative of inflation and as you can see in the chart…Bonds and home loan rates will have a tough time improving much further, regardless of other factors.
One key factor to keep an eye on is the labor market, as Initial Jobless Claims increased 13,000 to 380,000 for the week ending April 7. This marks the highest level since January, and the second highest reading for 2012. The Fed has acknowledged that job creations are short of their goals. In fact, last week Federal Reserve Vice Chairman Janet Yellen said that weakness in housing, the European debt crisis, and government spending cuts are likely to slow the pace of recovery and expansion. She did state that the Fed has plenty of stimulus tools to use, if economic conditions warrant another round of quantitative easing.
The bottom line is that many factors will impact the direction in which Bonds and home loan rates move in the weeks ahead. The good news is that home loan rates remain near historic lows and now continues to be a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.

Just when Europe’s debt crisis was moving off the front page, it has jumped back in to the spot light. More bad news out of Spain is causing an increase in their bond market rates and roiling markets again. Recent bond sales in Spain had been meeting with better than expected demand and at slightly lower rates than analysts were thinking. This was helping to keep the rate at which the country borrows at a lower point. Now Spain is seeing rates increase as investors decline to buy at the levels seen a week ago; the debt crisis is once again being brought into question. The European Union debt problems won’t go away, it will likely continue to surface and fade then resurface for a long time, each time it will impair equity markets and add support to the bond markets.
The focus on US Inflation Continues: While the market keeps an eye on the improvement in the economy, those nervous about the level of US debt have a close eye on inflation. There were developing trends that was providing a concensus, although since Easter holiday week may have distorted the data somewhat .Inflation is higher than is comfortable for many. The jump in the core PPI has been dismissed due to the increase in light truck prices. Inflation isn’t much of an immediate issue now. Janet Yellen, Vice Chair at the Fed commented; “I consider a highly accommodative policy stance to be appropriate in present circumstances,” Yellen said yesterday in a speech in New York. She also said that allowing the Fed’s program to extend the maturity of the assets on its balance sheet to expire in June wouldn’t amount to a policy tightening. She agrees with Bernanke by saying unemployment will decline “only gradually.” “Over the next several years, I anticipate that we will fall far short in achieving our maximum employment objective, ”Yellen said. Still, “considerable uncertainty surrounds the outlook, and I remain prepared to adjust my policy views in response to incoming information.”

Real Estate Miscellaneous Stats:

Many Real Estate Markets Are Heating Up: In many local markets across the country, homes are being snatched up as soon as they hit the MLS. These markets tend to be close in to major employment centers where economies are in decent shape or they are very attractive to investors. Some cities are experiencing bidding wars on homes in affordable prices ranges just like the good old days pre-boom. While prices remain flat nationally, these high demand areas are seeing prices start to rise as inventory is down. In Seattle inventory has recently dropped 36%. This is due to a slow down in foreclosures and the inability for many who have lost equity to sell their homes. Competition is raging between first time buyers, investors and foreign buyers; especially in the lower price ranges. These cities are considered the 10 tightest based on change in inventory from Feb 2011 to Feb 2012

1. Denver CO. Inventory down 42%.
2. Portland OR: Inventory down 38%
3. Seattle WA: Inventory down 36%
4. San Jose CA: Inventory down 34%
5. Salt Lake City UT: Inventory down 31%
6. Sacramento CA: Inventory down 30%
7. San Francisco CA: Inventory down 29%
8. Birmingham AL: Inventory down 29%
9. Memphis TN: Inventory down 29%
10. Richmond VA: Inventory down 29%

These numbers are based on a study done by Move Inc for Realtor.com. It is a comparison of the 50 most populated markets in the US.

Fannie Mae and Freddy Mac Continue to Resist Principle Reduction Modifications: While there is an increasing trend toward principle reductions by private mortgage holders for mondifications, Fannie and Freddy continue to refuse this option. Of all the loan modifications granted in the private market; 16% received debt reduction by private holders and 25% by bank portfolio managers. Lenders continue to struggle as 12.1% of all mortgages were delinquent as of the end of last year. Debt reduction is said to be one of the best tools to help reduce those at risk but the government GSE’s say they cannot use this option as it would cost the US tax payer $100 billion at a time when deficits are at history highs. Foreclosures will be with us for a while as the rate increased in the 4th quarter by 22%.

Recent Changes in FHA Guidelines Making Things More Difficult for Homebuyers: FHA has been the loan option so choice for many first time homebuyers ever since the mortgage market melt down. Low down payment, good rates and accommodating credit requirements make it very attractive. Officials at FHA have been attempting to manage the increasing strain on the FHA reserve fund and have had to increase the MI premiums again to accommodate losses experienced by the program. As of April 9th, any FHA case numbers will have an initial up front premium of 1.75% compared with 1% prior to the change. The annual component that gives the monthly payment has increased as well. For loan amounts above 95% LTV the premium goes from 115 basis points to 125. For those loans below 95% LTV it goes to 120 basis points. FHA loans with terms of 15 years or less remain exempt from the annual premium. In another announcement FHA informs of a change in policy regarding collection accounts, FHA previously did not require the payoff of collection accounts up to $1000.00. That has not been changed. Now borrowers will have to make arrangements to pay them off over several months or before closing. Exclusions include victims of identity theft, unauthorized use of accounts or when the accounts are over 2 years old.

Good Article On Short Sale Advice: http://realestate.msn.com/short-sell-your-home-to-avoid-foreclosure .

Loan Program Of The Month. Home Affordable Refinance Program ( HARP ): Fannie Mae and Freddy Mac have rolled out their new revised version of the popular refinance program that allows borrowers who have lost equity to refinance without the requirement of obtaining mortgage insurance. In some cases refinancing is possible with negative equity with no limit on loan to value ratios due to 2nd mortgages. Eligible loans must be Fannie or Freddy loans and have been originated before May of 2009. Expanded appraisal waivers, transfer of existing mortgage insurance policies by non-originating institutions and expanded underwriting guidelines are also a part of the new version of the program. These changes are expected the help a large number home owners.

Bellevue Real Estate Report

Mortgage Rates Inch Back Into Historically Low Territory

Posted on 14 April 2012 | No responses

Here is an update to the Bellevue Real Estate Report:

Mortgages Rates improved again today , though some lenders’ rates were little changed. This marks the second day of moderate improvement and consolidation after a strong move lower by most lenders on Friday. There’s a greater-than-normal variability between lender offerings, but in general, mortgage rates are near their best levels of the month. The Best-Execution Conventional 30yr Fixed Rate is probably best viewed as 3.875% now for flawless scenarios, and 4.0% for many others.

Bellevue Real Estate

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