Meet Bellevue

Bellevue Real Estate, Mortgage, and Economy 1/2/12

Posted on 02 January 2012

Here is the Bellevue Real Estate Report for Jan 2, 2012:

Interest Rates Gain Back Lost Territory: Rates move back to the best levels of the last 2 weeks and bump along historic lows. The same factors we have watched continue to move the markets. The US economy continues to show some improvements as employment numbers move better, consumer sentiment improves and industrial data comes in somewhat positive. Market experts say that improvements from here face some resistance but it may be worth watching for new developments. Have a Happy New Year.

Industry News
State of the Economy:
Last Week in Review

It’s been said that “the only constant is change.” And we certainly saw a lot of changes in 2011. As we ring in 2012, here’s a look at how 2011 ended, and what lies ahead for home loan rates.
The Stock and Bond Markets were closed on Monday in observance of the Christmas holiday, and it was a fairly quiet week after that. However, there was some good news, as Consumer Confidence came in at 64.5 for December. Not only was this the third highest number reported for 2011, but this important index has jumped nearly 25 points in the past three months and now sits at its highest level since April. What’s more, this report followed the recent Consumer Sentiment Index reading, which also came in at its highest level in six months.
While consumers certainly appear more optimistic here, the news hasn’t been as positive out of Europe. The Euro struggled somewhat last week after just an okay performance from one of Italy’s Bond auctions. While the country sold all their debt at yields slightly lower than where they were just the day prior, yields are still historically high (near 7% on 10-Year Notes) for a country that has a lot of debt to service and refinance in the coming year. In addition, Spain’s government announced on Friday that the country’s budget deficit will surpass 8%. Spain also unveiled new austerity measures to combat their economic and budgetary difficulties.
So what does all of this mean for home loan rates here in the U.S. in 2012? The uncertainty in Europe should continue to help Bonds and home loan rates, as investors will see our Bonds as a safe haven for their money – and remember, home loan rates are tied to Mortgage Bonds, so rates typically improve as Mortgage Bonds improve. However, continued good economic reports here in the U.S. could balance out those improvements. That’s because investors will typically move their money out of Bonds and into Stocks during good economic times, so they can take advantage of gains.
The bottom line is that whatever lies ahead this year, 2012 begins with home loan rates near historic lows…which makes this 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.
This is the time of year when we hear a multitude of economic forecasts from economists. From what we have read over the last few days, the consensus for 2012 is better based on various surveys. Economists surveyed by Bloomberg and Reuters are expecting GDP growth in 2012 at +2.4% frm 2011 that is under 2.00%. Of course most forecasts have the caveat that Europe could drag the world back into recession and a global credit crisis if banks in the region fail or sovereign debt defaults occur. 2012 like 2011 will be held captive by Europe’s continuing inability to accomplish much so far.

Europe remains the key for US interest rates, not news that safety trades have pushed US yields to all-time lows. In Jan, after a few weeks of quiet from the EU, ECB, and the IMF, expect renewed comments and “plans” on how to deal with the increasing debt mess and banking concerns in Europe’s banks. At the end of the year the dangling question that has hung over global markets for two years hasn’t changed. Can officials of various bodies actually solve the debt crisis in a manner that doesn’t lead to default? And where is the money going to come from to relieve the region’s banks? At the end of day so far, there isn’t enough money or near term solution to the developing crisis. Will Europe drag global economies down as it re-enters recession?

Real Estate Miscellaneous Stats:
The S&P/Case-Shiller index of property values in 20 cities dropped 3.4% from October 2010 after decreasing 3.5% in the year ended September, the New York-based group said today. The median forecast of 27 economists in a Bloomberg News survey projected a 3.2% decrease.

National Association of Realtors Mistates Home Sales: The national Real Estate association made an announcement last week that they had over estimated home sales from 2007 through 2010 making an already dismal situation appear worse than we thought. 2010 sales numbers were revised down 14.6% and the total sales from 2007 through 2010 were lowered by 14.3%. This lowered total sales during that period by 3.5 million units. The discrepancy is said to be due to some variences in census data and double counting of some sales. Another factor is a movement away from For Sale By Owner properties that made standard formulations unreliable.
Loan Program Of The Week. New Portfolio Jumbo Loan: Guild Mortgage has just entered in to an agreement with a Jumbo Loan provider that offers some of the most flexible underwriting and creative provisions for loan approval. Here are a few bullet points:
• Loan Amounts Up to $5,000,000.00 and $10,000,000.00 on a case by case basis.
• True portfolio product with flexible underwriting policy. We just approved a loan that was declined with other portfolio lenders because of income problems.
• Asset Depletion can be used to supplement income. This can be done even if a client does not have a history of depleting assets on their tax returns. Income calculations from this source are based on age of the borrower. 4001K funds can only be used if the borrower is of retirement age.
• Pledged Assets can be used to reduce down payment. This allows the borrower to keep their assets invested. This can allow down payments as low as 10%. Pledge cannot come from a 401K, IRA or annuities.
This loan can be very helpful for high net worth borrowers that may not show a lot of income on their tax returns.
Some Interesting Information:
Part 1: 5 Simple Steps for Achieving Your New Year’s Resolutions
Each new year is full of promise and potential. Perhaps that’s why so many of us choose this time of year to make positive changes in our lives.
And, believe it or not, achieving your goals can be easier than you think. The following 5 steps can help you get started and follow through!
1. Set realistic goals. The first step to your successful New Year’s resolutions is to set realistic goals for the coming weeks and months. You can start by focusing on the things you’re passionate about or the things you’ve always wanted to do. Maybe it’s a worthy cause you want to become involved in…or maybe you want to kick a habit that’s bothered you for years. If it’s something that you’re passionate about, you’ll have a better chance of being successful. Once you have the topic, make sure you write down a specific, attainable goal. It’s not enough to just think about doing something. Come up with a specific statement you want to achieve. For example, the most common resolution is to lose weight. But that’s not specific enough. Write down exactly how much weight you want to lose and by when. But make it realistic…and healthy at the same time.
2. Make a simple plan to achieve each goal. Once you have your goals written down, take the resolution a step further by figuring out how you’ll achieve it. That means breaking the goal down into simple steps that you can achieve over time. And, often, it means multiple little steps. So, for the weight loss resolution, you may write down a number of simple, daily or weekly steps – such as exercise 20 minutes three times a week, eat vegetables and fruit with each meal, switch to diet cola or better yet water during the day, and lose a certain number of pounds per month. Remember to consult a physician before starting any weight loss or exercise routine to make sure you’re approaching it in a healthy manner.
3. Announce your goals. One of the best ways to make sure you stick to your goals is to make them known to your friends, coworkers, and family members. The reality is, once you’ve told people you’ll do something, you’ll feel more accountability than if you just keep it to yourself. You’ll also have a cheering section to help you stay focused and positive as you work to achieve your goals. But don’t just share your goals; share the specific steps that you’re going to take each day or week to achieve those goals. If you use any social media websites to connect with friends and family, make your goals and steps part of your daily/weekly updates…it’s a great way to get the word out and hear feedback from people who want to help you stay on track.
4. Track and celebrate your progress. Small steps aren’t just about making your way to a goal; they’re also about building momentum, a positive attitude, and celebrating successes along the way. There are a number of ways to track and celebrate your success. For example, if your goal is to work out 20 minutes a day three times a week, you can use a marker and a calendar. Each day you work out, simply color that day in green (or another positive color that you like). As the month unfolds, you’ll see more and more green covering the calendar, which will help you see just how much work you’ve done and keep you motivated to keep going. In addition, you can also use social media to track and celebrate your success. Maybe you tweet or update your Facebook status every time you exercise. Or maybe you announce when you’ve lost a few pounds. The point is, you’ve already announced your goals to friends and family as a way to hold yourself accountable, now it’s time to celebrate with those same people every time you achieve a step along the way.
5. Don’t get discouraged. You’re bound to have good weeks and bad weeks. Just because you fall off track once or twice doesn’t mean you should give up. Instead, acknowledge that you had a bad day or week, figure out what happened to throw you off track (maybe it was a busy or stressful week), and then make a plan to overcome the problem if it happens again. For example, if you had a tough week at work that required you to work late and miss the trip to the gym, make a plan to be proactive the next time work gets busy. Perhaps you make a plan to walk during your lunch break or wake up early to do jumping jacks and push-ups before heading into the office. But…whatever you do…don’t give up on your goals or yourself. Review your plan and recommit yourself to those simple steps. You can even use social media to acknowledge a mistake and commit to overcoming that problem in the future. That way, you’ll have a new sense of accountability and support from your friends and family.
Best wishes to you in achieving all your goals and dreams this year. And if your New Year’s resolutions involve any financial or housing matters that I can help with, please call or email today. I’ll be happy to help out in any way that I can.

Bellevue Real Estate Report