Bellevue Real Estate, Mortgage, and Economy 4/18/11
Posted on 18 April 2011
Here is the Bellevue Real Estate Report for April 18, 2011:
INFO THAT HITS US WHERE WE LIVE…Optimists received some encouragement from data aggregator CoreLogic, who reported that home prices fell again in February, but the price drops appeared mostly with distressed sales–short sales and bank-owned homes, otherwise known as REO properties. Excluding these, the CoreLogic index was essentially flat, down just 0.1% versus a year ago. Their Chief Economist commented, “When you remove distressed properties from the equation, we’re seeing a significantly reduced pace of depreciation and greater stability in many markets.” During the month, 6 out of 10 of the country’s biggest markets saw home price APPRECIATION in non-distressed sales.
The Mortgage Bankers Association (MBA) predicts rates on 30-year fixed-rate mortgages could rise a bit in the second half of this year. They see this gradual rise in mortgage rates continuing, even if the Federal Funds rate does not increase for another six to 12 months, as many economists expect. That’s because both the Treasury Department and the Fed announced last month they would start selling their huge portfolios of mortgage-backed securities. Some analysts believe these moves will raise rates.
SLOPING SIDEWAYS…Stocks were down for the week, but only slightly, falling sideways, if you will. This seemed to stem from general investor unease over the U.S. budget deficit, the European debt crisis and a mixed reaction to Q1 corporate earnings. Alcoa beat estimates, but revenues were off. JPMorgan Chase topped expectations, but Bank of America missed. Even Google was punished for higher operating costs, while reporting in-line earnings and better than expected revenue. Yet, the 33 S&P 500 companies reporting so far had 7.3% higher sales and 38% better earnings than a year ago. For the week, the Dow ended down 0.3%, at 12,342; the S&P 500 was off 0.6%, to 1,320; and the Nasdaq was also off 0.6%, ending at 2,765.
In other news, Retail Sales were on a roll in March, up 0.4% overall and up 0.8% taking out autos. That’s annual sales growth of almost 10%, so the consumer is clearly helping out. On the inflation front, the PPI showed prices for producers continued up in March, though less than anticipated. And these increases were NOT getting passed on to the consumer, since the Core CPI showed prices up just 1.2% from a year ago. However, most economists expect inflation to go up, and with that comes higher interest rates, so home buyers and refinancers should not be too complacent about today’s low rates.
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