After studying the facts on the real estate market as an investment opportunity
I couldn't say it any better than the statements below from Keeping Current Matters:


"Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing. Let’s state it simply and forcibly: Housing is back. Two basic factors are laying the foundation for dramatic recovery in residential real estate. The first is the historic drop in new construction … The second is a steep decline in prices, on the order of 30% nationwide since 2006, and as much as 55% in the hardest-hit markets. The story of this downturn has been an astonishing flight from the traditional American approach of buying new houses to an embrace of renting. But the new affordability will gradually lure Americans back to buying homes. And the return of the homeowner will start raising prices in many markets this year."

I hope buyers are not sitting on the fence too long.

The latest information from Keeping Current Matters (my favorite source for real estate information), should be of interest to both buyers and sellers . Here is a summary of their most recent report and concerns for the housing market and I could not agree more.

• It seems that our Federal Government is attempting to set limits as to what defines a "quality residential mortgage" (QRM) and while we may need lending reforms, it seems that many lenders and organizations that are involved with the real estate industry have concerns about how this will affect the housing recovery. Jack and I have these same concerns as we feel these guidelines harm creditworthy buyers and the housing recovery itself.

• The Government is in the process of making home ownership more expensive or out of reach for millions of people through higher downpayments and equity requirements. They are proposing that we move from a 5% to 10% downpayment on some loans and even to 20% on others. Even where loans have strict underwriting regulations in place.


• Based on 2009 income and price data it would take 9 years to save $10,000 and 14 years to save $20,000.


• A buyer could seek a non-qualified loan but this would require a higher interst rate and even a 1% increase in interest rates would cause over $4 million people to not qualify for the median home price ( according to the

National Association of Home Builders . )

These Governement proposals harm buyers wanting to buy a home and does not offer any help for homes that are defaulting.

Considering the changes that could occur to the mortgage market, this could be the best time to buy after all.

Are Homes Costing More?

We are beginning to see more activity and buyers seem to be recognizing good deals and
well priced properties. There is more of a sense of urgency as we hear rummors about
Freddie Mac and Fannie Mae being terminated and lenders being put on salaries instead of commissions.
Everyone is wondering what affect it will have on buyers getting mortgages in the future

As I mentioned in my last Blog I hope buyers are paying attention to the interest rates not home prices.

The Primary Mortgage Market Survey released by Freddie Mac showed that the 30 year fixed rate mortgage was at 5.05%. Long term bond yields jumped which caused interest rates on a 30 year
fixed rate mortgage to rise to the highest level since the last week in April of 2010. So prices
have remained stable but interest rates have risen dramatically in the last 90 days.
National median prices have gone from $170,300 in the 4th quarter of 2009 to $170,600
in the 4th quarter of 2010 which is only a o.2 percent change. Even if prices fall another 10% this year the cost of a home
will increase if interst rates go up more than 1%. So, I hope buyers are worrying about where their
costs will go later in the year not prices.

Impact of Rising Rates When Buying a Home

As I have been saying for months buyers should act while the rates are low and not just wait to see if home prices will continue to drop. They may loose the home they want and
pay more for a home due to the rise in interest rates. A recent article in Keeping Current Matters emphsizes this point.



Impact of Rising Rates When Buying a Home: "No one knows exactly what will happen as we move forward. The only thing we know for sure is that rising rates have a tremendous impact on a buyer’s payment. There are home buyers standing on the sidelines waiting for the prices of real estate to bottom out. If you are one of these buyers, be careful. You should be as concerned about the monthly COST as much as you are concerned about the PRICE"


Watch the interest rates and take action before they affect the "cost" of buying your next home.

Hope everyone has been enjoying the holidays inspite of the unusual weather.


Jack and Julia

Buy now and sell now!!

These times are very confusing for consumers but it helps to have
information from various experts in the real estate industry all summarized
for you here in our blog.
What are the experts saying for November? To quote John Paulson
on 9/27/10, the fund manager who shorted the housing market way
before it went down ,is now saying " If you don't own a home buy one,
if you own a home buy another one, if you own two homes buy a third,
and lend your relatives the money to buy a home also" He is the person
everyone is looking to for housing market advice. This comment sums it up.
Interest rates are predicted to go up over the next 7 quarters of at least one
full percent. So even if the prices of homes continue to go down in the next 12 months
the cost of the home can rise due to increases in interest rates. We are already
seeing an increase in the purchase of luxury homes as savy buyers understand
that the "Cost" of homes are at an historic low.

So invest in an assest that is tangible and at an all time low cost. (What do we
say about stocks, buy low and sell high!

After reviewing reports from various indexes and news articles it is clear to Jack and me that in order to get a home sold the seller needs to price his home at a compelling price. This would be a price that compels the buyer to purchase the home because he feels that if he doesn't
someone else will at that price. (The National Association of Realtors posts its report of PendingSales each month and Economists predicted that pending sales would go down by 14%, but actually pending sales declined by 30%!)

Individual home prices are decreasing in almost every market and as we go forward home
values will continue to depreciate. The experts expect to see another 5 to 10% (worse
in some markets). Of course home values are affected by supply and demand and demand
was affected by the home buyers tax credit, but that has gone away and at best demand
has remained stable while supply continues to increase. And coupled with increased foreclosures nationally, home values will continue to loose value and are at their highest right
now. I wish we could be more optimistic. The other side of the coin is that buyers have a
great opportunity, if they realize it.

Buyers are confused about when to buy. Interest rates are at an all time low, but are predicted to rise by December after the investment markets in Europe and Asia settle. So faced with changes in the future that could bring higher interest rates, stricter guidelines for lenders, and more emphasis on credit scores, buyers should act now if they are ready.


To summarize the S & P Case Schiller report: "inventory data and foreclosure activity have notshown any signs of improvement" The Core Logic Index: "the second half of the year we expect price growth to soften and possibly decline" The RPX index: "lower demand and greater supply will lead to new lows in prices"

Again, what this means to a home owner currentlly selling his home is that right now is the best time to sell and waiting for a higher offer or keeping your home at a higher price is not going to attract a buyer. Your home is worth more now than it will be in the next 6 months.

You need to hire a Realtor who will educate you on the market and help you make the right
decisions. That is why Jack and I stay informed and follow what the experts are saying.
We hope you the consumer will remember to reward the Realtor who tells you what you
need to hear and know and not just what you want to hear so that you can make the right decisions for you and your family.

Great time to buy! That is what we are hearing. The main reason buyers should pay attention
is the interest rates which fell to the lowest level in generations. Bankrate.com surveys lenders
and has stated that the 30 year fixed rate fell 11 basis points to 4.96 percent (large lenders surveyed).
In 25 years of monoriting rates this is the lowest we have seen!

Experts feel that the interest rate is the lowest since 1956! The crisis in Greece has caused
money to become cheaper in the US. Nothing lasts forever so I hope buyers understand
what a gift this is.

This is the time to lock in a loan on the home you have been watching.

Give Jack and I a call to help you locate the best property at the best price. We can also
recommend lenders that offer very good rates. We have been working with lenders
for over 25 years.