· Over 3,000 homes sold in the last year for under $85k. 3 years ago this number would have been under 100 homes sold.
· A full 25% of the market was for homes priced under $135k!
· Look at the shortage of inventory of homes priced under $210k.
· Even a $300k home is in a seller’s market now.
Financial News Update
· The Dollar rallied on Monday after comments from Russia’s finance minister confirming the Dollar’s dominant position as the world’s main reserve currency.
· Philly Fed Index on manufacturing increased to <2.2> from <22.6> in May.
· NY Empire State Index on manufacturing dropped to <5.1> from <4.55>.
· In May industrial production dropped 1.1% and capacity utilization dropped .7% to 68.3%.
· Housing starts surged up 17% in May and permits increased 5%.
· Producer Price Index up .2% in May and the Core PPI dropped .1%. In the last year, the PPI has dropped 5%; the Core PPI is up 3%.
· Consumer Price Index up .1% in May and down 1.3% for the last 12 months, the biggest drop since 1950.
· Core CPI up .1% in May and up 1.8% for the last year which is perfect.
· Continuing unemployment claims dropped 148k this week to 6.69 million. This was its largest weekly drop since 11/01.
· Leading economic indicators increased 1.2% in May after rising 1.1% in April. This report is designed to predict future economic activity in 6 to 9 months
· CO’s unemployment rate in May increased to 7.6% from 7.4% in April. The national unemployment rate was 9.4% in May.
· The Treasury said that in April foreign investors bought only $11.2 billion of L-T Treasury Securities down from $55 billion in March. This is NOT a good trend if it continues.
Great Rate Update
· Conventional 30 year fixed with 20% down-5.50%
· FHA 30 year fixed with 3.50% down-5.75% (rate is 5.50% if we have 45 days till closing)
· Jumbo 5/1 Interest Only ARM with 25% down-4.50%
· Jumbo 30 year fixed with 20% down-6.25%
This week has been a very volatile week for Mortgage Backed Securities or mortgage bonds. It reminded me of Denver’s weather-wait 10 minutes and it will change again.
On Monday morning the 4.50% bond opened at $98.28 and on Wednesday morning the price hit $100.18 before the market crashed. This morning prices had dropped to $97.68, a 250 basis point drop in 2 days after rising nearly 200 bps the previous 2 days. Today, the 4.50% ended up 38 bps on the day to close at $98.62 close to where it ended last week. Whew!
The Treasury announced they will sell $104 billion of new 2, 5, and 7 year Notes. Thus, long-term bonds could be hurt by all this new supply of debt and mortgage rates could rise.
Emergency Weather Alerts on Your Cell Phone
With all the turbulent weather we have had recently I discovered you can receive emergency weather alerts on your cell phone and by email. Speaking of turbulent weather we saw a funnel cloud on Sunday from the right field bleachers of Coors Field.
If you live in Jefferson or Broomfield County or the Roxborough area you can register for this free service at www.Your911.org. If you live in other counties call your local fire or police department to see if they offer something similar.
Loan Updates
· Some good news from FHA, beginning October 1st FHA is eliminating the 1 year waiting period on condo conversion projects. In the past to obtain a FHA loan on a condo conversion project the project must have been completed for 1 year. NO MORE! Yeah!
· Wells Fargo now requires on all condos a 75% owner occupancy rate! The gold standard for years has been 51% and this year Fannie and Freddie eliminated this rule if the subject property is a primary residence or second home. But, not Wells Fargo. This is a very tough standard to meet and I can tell WF does not want to lend on condos. So, if you have a client wanting to buy a condo don’t use WF.
Quote of the Week-"Character is the ability to follow through on a resolution long after the emotion with which it was made has passed.--Brian Tracy
Recently, the Today Show interviewed a real estate expert, Barbara Corcoran, who talked about her top 5 picks for the best cities to buy real estate in RIGHT NOW! She looks for 8 characteristics in each city and they are-
· Good job growth potential
· Growing population
· Good weather
· Lots of first time home buyers who can afford to buy
· No overbuilding of homes
· Vital downtowns
· Well educated population
· Large number of foreclosures early on
Boy, this sounds like Denver to me! Here are 3 great quotes from her-
· "Denver is clearly on a rebound."
· Denver is "the perfect real estate success story."
· "Everything in Denver is pointing up, up, up."
She went into greater detail of why she likes Denver so much with these comments-
· She went on to note that DENVER has a vibrant downtown
· A high employment base
· Highly educated residents
· The nation's largest public park system
· We led the nation in foreclosures early on and our foreclosure rate is now dropping.
· The Today Show host remarked as well about our great weather.
To see the video for yourself, click below
http://www.gawkk.com/housing-markets-most-likely-to-rebound-fail/discuss
Barbara Corcoran is the founder of the Corcoran Group, New York´s premiere real estate brokerage, and she is known as one of the most powerful brokers in the country.
