Tuesday, September 29, 2009

Palo Alto Market Update, September 29th: Single Family Homes


  • As of today this is the snapshot of the Palo Alto single family home market:

107 Active listings
51 Pending sales

What does this mean? After a big increase in inventory after Labor Day the inventory has decreased by 10 and the pending sales have increased by 8. This is not because of long escrows because the average length of escrow in the last 3 months is 29 days. This is because there are so few short sales and bank owned properties in Palo Alto. These sales are the ones that take so long to close. The middle section of the market, homes listed between $900,000 and $1,500,000 are the ones with the most activity and offers. In this segment there are 40 active listings and 29 pending sales which is a great ratio. Interest rates are still low and there are certainly buyers out there wanting to living in Palo Alto, and now that prices have dropped 20% the market seems to be picking up.

If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate
650-619-9285
DRE 01191194

Steve Papapietro's Mortgage Bulletin

For the Week of Sept 28th, 2009

LAST WEEK IN REVIEW

"BE WILLING TO MAKE DECISIONS." General George Patton.
And that's exactly what the Fed did last week at their regularly scheduled Federal Open Market Committee meeting. But just what did they decide...and what do their decisions mean for home loan rates?

The Fed said they are going to ration out the remaining commitment of Mortgage Backed Security purchases through the first quarter of 2010. There will be no additional buying, but instead, a longer weaning off of the program. There was some speculation about the Fed increasing the amount of buying above the $1.25T committed to, and last week's statement is the Fed's nice way of saying "no." They will not be buying more in quantity, but what they will do is attempt to provide a smoother transition to normal market conditions.

It is a given that once the Fed ceases its purchases, that interest rates will climb significantly higher...most likely back above the 6% area. So instead of a hard transition with a large bump in rates, the Fed is attempting to allow rates to gradually rise.This means that waiting to purchase or refinance will very likely mean a higher interest rate.

Their decision also means that the Fed's remaining purchases will all be lower in quantity, as the remaining allotment for purchases will be spread over a longer period of time - and additionally, will not necessarily be spread out as evenly as their past purchases - which could lead to more volatility for rates in the near term.

In other news, Existing Home Sales and New Home Sales were reported slightly less than expected, but both reports continue to show signs of an improving housing market. The inventory of unsold existing homes fell to its lowest inventory level since April 2007, while the inventory of unsold new homes dropped to its lowest level since January 2007. While some of the decline in new home inventory may be due to builders constructing fewer homes - these reports indicate that the housing market is indeed showing signs of life.

Remember, with home loan rates still low - but slated to increase with the Fed's recent decision - as well as a juicy tax credit for First Time Home Buyers that is going to expire on November 30th, it makes sense to get off the fence if you've been considering a purchase or refinance. Or do you have a family member, neighbor, friend or coworker who might benefit from getting some good home loan advice? I'm always glad to get your referrals, so simply let me know who I might be able to help.

Also in the news, Durable Goods Orders for August unexpectedly fell 2.4% for the largest decline since January. The weaker than expected economic data helped fuel a rally in the Bond market and a late week improvement in home loan rates...while on the other hand, Stocks struggled, particularly with the increasing concerns of Iran's construction of nuclear sites. This kind of geopolitical unrest is troubling on many fronts, and if the situation continues to escalate, it could have a big impact on both the Stock and Bond markets.

FORECAST FOR THE WEEK

There are several important economic reports in store for this week, the biggest likely being Friday's Jobs Report for September. The Jobs Report for August showed a troublesome 216,000 jobs lost for the month, with prior months revised to show an additional 50,000 jobs lost. In addition, the last report showed that the Unemployment Rate for August jumped to the highest level in 26 years, at 9.7% from July's 9.4%. This is more than double the rate of unemployment from just two years ago and significantly higher than the 5.9% average during the past 40 years. The Unemployment Rate portion of the Jobs Report is often seen as more reliable than the job loss numbers since it is an actual survey, where about 60,000 households are contacted - so this is a particularly important element of the report, as we watch to see signs of an improving economy.

Also this week, we have a read on Consumer Confidence coming on Tuesday, while Thursday brings the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) Index, found within the Personal Income Report. Thursday will also bring another weekly Initial Jobless Claims Report, just ahead of the Labor Department's big Jobs Report coming on Friday.

It will most certainly be a full week of news, particularly as the aforementioned tension in the Middle East continues to simmer. There is a meeting scheduled for this Thursday with representatives from six nations to discuss this situation further.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds were able to mount a late-week rally through a key "ceiling of resistance", and this move higher for Bonds caused home loan rates to improve. I'll be watching closely to see if Bonds can hold their ground, and continue in this improving direction in the week ahead.

Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Sep 25, 2009)
Japanese Candlestick Chart


MORTGAGE MARKET VIEW

Financial Benefits of Home Ownership

There are a number of personal and emotional reasons to buy a home. But there are also some strong financial reasons to make the investment. In addition to exceptional home affordability and near historic interest rates, here are some important financial benefits of owning a home:

Increased Net Worth: Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.

A Big Tax Deduction: One of the largest tax deductions available is the amount of interest paid on a mortgage. In fact, a $150,000 home at a 5.50% interest rate can add up to approximately $8,000 in first year's interest. This amounts to a significant savings - effectively reducing the amount of a homeowner's monthly loan payment.

Long-Term Appreciation: Over the last few years, home prices have corrected and become more affordable. While that's good news for potential buyers, it has overshadowed the long-term appreciation of a home's value. The reality is, despite market ups and downs, real estate historically appreciates around 6% per year. Even if you calculate a modest appreciation of 3%, a home purchased today for $150,000 should grow in value to $364,000 over 30 years.

$8,000 Tax Credit: Don't forget, the government is offering an $8,000 tax credit for first-time homebuyers - or for folks that haven't owned a home during the past three years. However, the program is scheduled to end soon. In fact, the Internal Revenue Service recently reminded potential buyers that they must complete their first-time home purchases before December 1, 2009 to qualify for the special credit, which means the last day to close on a home and qualify for the credit is November 30, 2009.

If you're considering purchasing a home or refinancing, this is an ideal time. Call or email me today to discuss your specific situation and how you can benefit from today's market.

This Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of September 28 - October 02

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. September 29
10:00
Consumer Confidence
Sept
57.0
54.1
Moderate
Wed. September 30
08:15
ADP National Employment Report
Sept
-200K
-298K
HIGH
Wed. September 30
08:30
Gross Domestic Product (GDP)
Q2
-1.2%
-1.0%
Moderate
Wed. September 30
09:45
Chicago PMI
Sept
52.0
50.0
HIGH
Wed. September 30
10:30
Crude Inventories
9/25
NA
NA
Moderate
Thu. October 01
10:00
ISM Index
Sept
54.0
52.9
HIGH
Thu. October 01
08:30
Jobless Claims (Initial)
9/26
NA
530K
Moderate
Thu. October 01
08:30
Personal Consumption Expenditures and Core PCE
YOY
NA
1.4%
HIGH
Thu. October 01
08:30
Personal Consumption Expenditures and Core PCE
Aug
NA
0.1%
HIGH
Thu. October 01
08:30
Personal Spending
Aug
1.1%
0.2%
Moderate
Thu. October 01
08:30
Personal Income
Aug
0.1%
0.0%
Moderate
Thu. October 01
10:00
Pending Home Sales
Aug
NA
12.9%
Moderate
Fri. October 02
08:30
Average Work Week
Sept
33.1
33.1
HIGH
Fri. October 02
08:30
Hourly Earnings
Sept
0.2%
0.3%
HIGH
Fri. October 02
08:30
Non-farm Payrolls
Sept
-188K
-216K
HIGH
Fri. October 02
08:30
Unemployment Rate
Sept
9.8%
9.7%
HIGH


Sunday, September 27, 2009

A Very Special Duplex in a Very Special Location



10412 Meadow Place, Cupertino


This is a special home at the end of a lovely cul-de-sac in a residential neighborhood down the street from Monte Vista Park.

2 units
2 bedrooms in each unit
1 ½ bathrooms in each unit
Large, sunny dining room/sun room in the back unit
9,580 +/- square foot lot with mature landscaping
2,780 square feet of living space
Entire exterior has just been painted
2 car garage
Back unit has new carpet, new kitchen counters, and new bathroom floors
In unit washer and dryer in both units
Fantastic cul-de-sac location

For more information please contact agent:
Marcy Moyer
Intero Real Estate Services
650-19-9285
D.R.E. 01191194

Wednesday, September 16, 2009

Palo Alto Market Update, September 16th: Single Family Homes



As of today, here's the snapshot of the Palo Alto single family home market:

115 Active listings
43 Pending sales

What does this mean? There was a huge increase in inventory last week. The PA broker’s tour was the biggest it had been all year. This may be a fluke as many people do not put their homes on the market in August so the first week after Labor Day has a lot of pent-up sales. I will know more next week regarding how the pending sales are doing, whether they're still brisk or if there's a slow down. Also it will be interesting to see how many new listings come on the market in the next 2 weeks. If we continue to see huge increases then the gains in the market we saw over the summer will probably not hold. If the inventory does not continure to increase and pending sales keep up then we should go back to a healthy though not overheated market.

  • If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate
650-619-9285
DRE 01191194

Tuesday, September 8, 2009

Palo Alto Market Update, Single Family Homes: Sept 6th

Here's today's snapshot of the Palo Alto single family home market:
86 Active listings
50 Pending sales

What does this mean? The inventory of active listings continues to decrease, and the pending sales continue to increase. I think that we are experiencing significant change in the under 2 million dollar market. We have seen a number of multiple offers in Palo Alto and I think by Sept we may start to see that there is an up tick in the prices in the lower than 2 million dollar market.

If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate
marcy@marcymoyer.com
650-619-9285
www.marcymoyer.com