Jude's Real Estate Rumblings

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Real estate agents court Gen Y

An article from USA Today, reports that the current real estate slump has convinced many real estate agents to start marketing a group not known for its home-buying habits: Twentysomethings.  In order to connect with them, agents are unleashing a new breed of marketing tactics, from posting homes for sale on YouTube to building Facebook pages.  Jacky Teplitzky, from New York-based real estate firm, Prudential Douglas Elliman said, "This younger generation is so technology-savvy, and because of that, they are changing the way real estate is being marketed and how brokers must use technology to successfully get to this group.  This demographic is so important."  Leslie Tyler, vice president of marketing at ZipRealty added, "In the market today, first-time home buyers don't have as much money to spend (on luxury homes), but they don't have a home to sell.  If they're ready to buy and have good credit and a down payment, they're valuable to have.  They're more of a sure thing.  They're the customer of the future."
http://www.usatoday.com/money/economy/housing/2008-06-16-youtube-facebook-generation-y-buyers_N.htm
2 comments • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 01:06PM

Developers expected to build more Denver-area apartments

An article from the Denver Business Journal, reports that according to a report released by Hendricks & Partners, construction of apartments in the Denver area is expected to increase this year as developers move away from a softening condominium market.  The company's research states that developers built 2,262 units in 2007, and expects that number to reach between 2,500 and 3,000 units in both 2008 and 2009.  Also noted in the report is 217 new units were completed in the first quarter of 2008.  According to Hendricks & Partners, the rise in foreclosures in the Denver area is increasing demand for apartments.  The average rent rose 2.3% from a year ago, and is the strongest year-over-year increase since mid-2004.  By the end of 2009, the company predicts the average apartment rent will pass $900, setting a new record high.
http://www.bizjournals.com/denver/stories/2008/06/16/daily14.html?b=1213588800^1651592
0 comments • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 01:05PM

Senate Is Set to Weigh Housing Initiatives

An article from the Wall Street Journal Online, reports that as early as this week, the Senate is set to vote on a package of housing initiatives that would mark lawmakers' most comprehensive effort yet to deal with record numbers of foreclosures and a housing slump that is weighing on the economy.  Included in the legislation is a regulatory overhaul for government-sponsored mortgage investors Fannie Mae and Freddie Mac, a $300 billion program to refinance struggling borrowers and a combination of government grants and tax credits to help homeowners.  The Senate bill would expand the size of single-family mortgage loans that can be acquired or guaranteed by Fannie Mae and Freddie Mac to $625,000 from the $550,000 set in an earlier bill approved by the banking committee.  Currently the limit on such loans is about $730,000, which represents a temporary increase enacted by Congress earlier this year.  Unless Congress takes action, the loan limit is due to revert to $417,000 at the end of this year.
http://online.wsj.com/article/SB121375208357082983.html?mod=RealEstateMain_1
0 comments • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 01:03PM

Cherry Creek II brings big block to suburbs

An article from the Colorado Real Estate Journal, reports that in November, the biggest block of office space in metro Denver will come on line and head straight into a $1 million makeover.  According to Paul Luber of Ascent Capital Partners, which is redeveloping the property, Cherry Creek Place II is being vacated by longtime tenant Dex and will be turned into a Class A building in the Aurora submarket.  The six-story building totals 199,892 square feet.  Luber said, “What we have is the largest contiguous block of existing space in the suburban metro Denver.”

0 comments • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 01:02PM

Real Estate Outlook: Buyers Off the Sidelines

An article from RealtyTimes.com, reports that there is evidence that buyers who'd been sitting on the sidelines are now making their way into the housing market.  According to the Mortgage Bankers Association of America's national survey last week, applications for new, conventional loans to buy houses jumped by 11% and applications for FHA insured mortgages were up by 17%.  With home prices sharply discounted in many of the former boom markets, and down slightly in many other areas, smart buyers are recognizing that it's time to make their move.  Something to consider is to keep an eye on the mortgage rates.  Last week, the MBA reported a sudden jump in rates.  Also, the Fed is signaling that it may not cut rates again for some time.  If buyers are thinking about picking up steeply-discounted real estate and financing it with cut-rate mortgage money, they might want to lock in their deals sooner, rather than later.
http://realtytimes.com/rtpages/20080619_realestateoutlook.htm
3 comments • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 12:58PM

Conoco shooting for 7,000 workers

An article from The Denver Post, reports that when ConocoPhillips builds out the 432-acre Louisville campus it purchased earlier this year, it could bring more than 7,000 jobs to the area.  Mary Manning, general manager for global real estate and facilities services for ConocoPhillips, said while the company doesn't know exactly how many people will work on the campus, it plans to seek approval from Louisville to accommodate at least 7,000 over the next 20 years.  According to Manning, she expects the first phase of the project to be completed in 2011, rather than in June 2012 as previously announced.  Louisville Mayor Chuck Sisk said he doesn't expect the community will have a shortage of housing as the campus grows.  He added, "We just approved 700 (housing) units in Louisville in the last year, and 350 more are coming downtown."
http://www.denverpost.com/business/ci_9628637
2 comments • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 12:56PM

Mortgage Tip

Most deals these days involve some amount of seller concessions.  For FHA loans (which are increasing dramatically in volume because of the low interest rates and relaxed underwriting guidelines), the seller has two choices - they can either pay for the closing costs, or they can pay for the buyer's 3% down payment.  Only FHA loans allow the seller to pay for the down payment by contributing the money to a down payment assistance program.
 
If you are only going to ask for 3% seller concessions when submitting an offer, we recommend that you ask that the 3% go towards paying the closing costs rather than towards the down payment.  It has been our observation that sellers are much more likely to agree to pay for closing costs than the down payment, even though the 3% they have agreed to pay is the same amount of money no matter what it pays for.
1 comment • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 12:55PM

Investor Report: Multiple-use "Flex" Space Properties

An article from RealtyTimes.com, reports that according to Mike Cannon, executive director of Integra Realty Resources of Miami, small to moderate-scale investors should be looking hard at central-city properties that currently have traditional, relatively inefficient uses that can be transformed into creative combinations of residential, retail, even office and light industrial.  He said, "The move is back to the urban core.  All the economic and demographic forces are pushing in that direction."  Many of the high-potential properties Cannon recommends are the "live-work" modern equivalents of traditional American urban combinations, such as the retail store on the first floor, and residential units on the one or two floors above.  Cannon said some of the most attractive real estate returns in the coming decade will go to investors who can identify and acquire urban-core land or buildings that are currently underperforming, but that have multiple, adaptive-use potentials going forward.
http://realtytimes.com/rtpages/20080620_investorreport.htm
0 comments • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 12:54PM

Daily Rate Lock Advisory

 



Monday's bond market has opened in positive territory following a negative open for stocks. The stock markets are starting the week off with losses with the Dow down 10 points and the Nasdaq down 15 points. The bond market is currently up 6/32, but we will likely still see an increase in this morning's mortgage rates of approximately .125 of a discount point due to weakness late Friday.

There is no relevant economic news being released today. The rest of the week will likely prove to be very active in terms of mortgage rate movement due to the economic data and other events that are scheduled. There are six economic reports scheduled for release between tomorrow and Friday, in addition to another Federal Open Market Committee (FOMC) meeting. Together, we have the makings of a potentially volatile week in the financial and mortgage markets.

Tomorrow brings us the first important report of the week with the release of June's Consumer Confidence Index (CCI). The CCI is very important to the financial markets because it measures consumer willingness to spend, which is important because consumer spending makes up two-thirds of the U.S. economy. If it shows an increase in confidence from last month, we can expect to see the bond market falter and mortgage rates rise slightly. Current forecasts are calling for a reading 56.0, down from last month's 57.2 reading.

The FOMC meeting begins tomorrow and will adjourn Wednesday afternoon. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting. But, as we have seen so many times in the past, it is the post meeting statement that often creates the most volatility in the markets. They could give an opinion of the overall economy, hinting at a possible future move or lack of one. Statements like these could cause a knee-jerk reaction in the markets and possibly mortgage pricing Wednesday afternoon. I suspect we will hear concerns about inflation that will lead to selling in bonds.

Overall, today will likely be the quietest day of the week. The most active should be tomorrow or Wednesday to the importance of the data and FOMC meeting. Wednesday's Durable Goods Orders could also help make it a busy day. Friday's news may also affect mortgage rates, but likely not as much as earlier days. This would definitely be a good week to maintain constant contact with your mortgage professional.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

2 comments • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 12:44PM

Over the Horizon, a Housing Recovery

Aan article from CNNMoney.com, reports that according to a new study from the Joint Center for Housing Studies of Harvard University, "The State of the Nation's Housing 2008," the country is poised to see an increase in housing demand over the next decade.  Nicolas Retsinas, director of the Joint Center for Housing Studies and on of the study's authors said, "The good news is that we still have a growing population.  As long as you have more households, more people are going to need places to live."  The Harvard study also found in early 2008, the nation had an 11-month supply of unsold new homes and a 10.7-month supply of existing single-family homes. A 6-month supply of existing homes is considered a buyers' market.  In order to reduce the current supply, the market will require price declines, a decrease in interest rates, employment growth, a return of consumer confidence and the revival of accessible mortgage credit.
http://money.cnn.com/2008/06/23/news/economy/harvard_housing_study/index.htm?postversion=2008062303
0 comments • Jude Sandvall, CNE, SFR 720-255-1021 • June 23 2008 12:43PM