Jude's Real Estate Rumblings

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Daily Rate Lock Advisory

 

 


This week brings us the release of six important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.

The first piece of data comes Tuesday morning with the release of June's Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 1.3% increase in the overall reading and a 0.3% rise in the core data reading. The bond market should react quite favorably to weaker than expected readings, but a bigger than expected jump in the core reading could send mor tgage rates higher Tuesday.

June's Retail Sales report will also be posted Tuesday. The Commerce Department is expected to say that sales at retail establishments rose 0.3% last month. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. A smaller than expected increase in sales could help fuel a bond rally and lead to lower mortgage rates, depending on the results of the PPI report.





Next on tap is Wednesday's release of June's Consumer Price Index (CPI). It is a mirror of Tuesday's PPI with the exception that the CPI measures inflation at the more important consumer level of the economy. Analysts have forecasted a 0.7% increase in the overall index and a 0.2% rise in the core data. The core data is considered to be the key reading of both the PPI and CPI because they exclude more volatile food and en ergy prices, giving us a more stable measure of inflation. Higher than expected readings could raise inflation fears and push mortgage rates higher both days.

June's Industrial Production data will also be posted Wednesday morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.2% rise in production, indicating that the manufacturing sector showed moderate growth during the month. A smaller than expected increase would be good news and could help push mortgage rates slightly lower Wednesday.





Also worth noting about Wednesday is the release of the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting.

Fed Chairman Bernanke will speak before th e Senate Banking Committee Tuesday morning and the House Financial Services Committee Wednesday morning at 10:00am ET. His testimony will be broadcasted and will be watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns. This should create a great deal of volatility in the markets during the testimony and the question and answer session that follows. If he indicates that inflation is still a point of concern, we will likely see the bond market tank and mortgage rates rise.





Thursday's only relevant data is June's Housing Starts report. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a small decline in new starts of housing projects. However, I don't see this data having a much of an impact on mortgage rates Thursday unless it varies greatly f rom forecasts.

Overall though, I think we will see the most movement in mortgage pricing this week on Tuesday or Wednesday due to the release of the inflation related indexes and Mr. Bernanke's testimony those days. This weekend's news of Fed support of Fannie Mae and Freddie Mac will likely help stocks, but I am not sure of how the bond and mortgage markets will react to that news. I suspect it will be taken as positive news, but it will be interesting to see if it has a significant influence on mortgage pricing. Regardless, even without that turn of events, it will likely be an active week for mortgage rates with a fair amount of volatility.

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... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is o nly 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.

©Mortgage Commentary 2008

0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 13 2008 10:27PM

Investor Report: Student Housing Performing

An article from RealtyTimes.com, reports that in major college and university towns, student housing has been one of the steadiest performing niches in real estate throughout the current down cycle.  The great news for investors is Freddie Mac is launching a new loan product for this segment called the "Student Housing Mortgage."  The loan terms run from 5 to 10 years typically, have interest rates in the mid-6% range this week, and even include interest-only options.  The program is aimed at acquisitions and refinancings rather than new construction, and comes with eligibility criteria that investors and operators need to meet.  There is a minimum loan amount of $5 million through the program.  Eligible projects need to be convenient to campus and the university or college itself has to have a substantial number of undergraduate and graduate students.  Also, there is a minimum equity investment of 20% with a strong preference that the property already be serving as student housing.  According to Mitchell Kiffe, a Freddie Mac vice president, the company is jumping in with this highly-targeted new loan because demand for student housing is soaring, and it's a solid business for owners, even in soft housing markets.
http://realtytimes.com/rtpages/20080711_investorreport.htm

 

www.judesandvall.com

2 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 11 2008 12:19PM

Colorado remains seventh in June foreclosures

An article from the Denver Business Journal, reports that according to data released by RealtyTrac Inc., Colorado's foreclosure rate was the seventh-highest in the nation in June, the same place it held in May.  In June, Colorado had 4,878 properties in foreclosure, or 1 in every 429 households.  Colorado's foreclosure rate was down 14.5% from June 2007, and down 9.6% from May.  Nationally, foreclosure filings were up 53% year over year in June, to 252,363 properties.  The date showed that 1 in every 501 U.S. households experienced a foreclosure filing in June.  The Mortgage Bankers Association's most recent quarterly survey, covering the first quarter of 2008, ranked Colorado 20th in the nation in foreclosures.
http://www.bizjournals.com/denver/stories/2008/07/07/daily42.html?surround=lfn

0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 11 2008 12:18PM

Daily Rate Lock Advisory

 
 



Thursday's bond market has opened down slightly following unfavorable results in today's only economic news. The stock markets are mixed with the Dow down 5 points and the Nasdaq up 4 points. The bond market is currently down 4/32, which should keep this morning's mortgage rates near yesterday's levels.

The Labor Department reported this morning that new claims for unemployment benefits fell sharply last week. They said that 346,000 new claims were filed last week. This was well below the 395,000 that was expected and a drop of 58,000 claims from the previous week. That is good news for the economy, meaning its negative news for bonds and mortgage rates. Fortunately though, this data only tracks a week's worth of claims and is not usually considered to be of high importance to the markets.

There is a Treasury auction of 10-year inflation protected notes (TIPS). It likely will not have an impact on rates, but could influence bond trading slightly if it is met with a strong or weak demand from investors. In a very light week of economic news such as this week is, events like these sometimes have a greater impact on the markets than if they took place during a busy week of news.

Both of the week's monthly economic reports are scheduled to be posted tomorrow morning. The first is May's Goods and Services Trade Balance report at 8:30 Am ET, which measures the size of the U.S. trade deficit. This data is not considered to be of high importance to the bond market and will not likely have an impact on mortgage rates. However, if it does vary greatly from analysts' forecasts of a $62.2 billion deficit, we may see some movement in bond prices, but probably not enough to cause much change in mortgage rates.

The second is the University of Michigan's Index of Consumer Sentiment that is released in a preliminary form each month and then followed up two weeks later with a final reading. The preliminary read ing for July will be posted late tomorrow morning and is expected to fall from June's final reading of 56.4 to 55.5. This would indicate that consumers were less comfortable with their own financial situations this month than last month. It is believed that if consumers are confident in their own finances, they are more apt to make large purchases in the near future. And with consumer spending making up two-thirds of our economy, investors pay close attention to reports such as these.

©Mortgage Commentary 2008
0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 10 2008 02:59PM

Mortgage Tip

If one of your buyers doesn't qualify for a loan because their debt-to-income ratio is too high, they are allowed to pay off debt in order to qualify for the loan.  This applies to both installment debt (car loans, furniture loans, etc.) and revolving debt (credit cards). 
 
For a conventional (non-government) loan, Fannie Mae guidelines permit it, but individual lenders are allowed to add their own restrictions on top of Fannie Mae's, so not every lender will be able to offer your buyers the option of paying off debt to qualify.
 
For FHA loans, every lender follows FHA guidelines, so they will all allow debt to be paid off to qualify.  One additional benefit of getting an FHA loan in a case like this is that FHA allows the money that's used to pay off the debt to come from a gift from a relative.

0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 10 2008 02:45PM

Downtown Denver Partnership program to improve store facades

Wednesday, July 9, 2008 - 12:41 PM MDT

Downtown Denver Partnership program to improve store facades

Denver Business Journal

The Downtown Denver Partnership on Wednesday announced a new Facade Improvement Program that will provide up to $20,000 of matching funds for retail store facades.

The announcement came at the DDP's 53rd annual meeting, held at the Denver Marriott City Center, before an audience of about 800.

DDP President Tamara Door also announced a plan to form a Retail Investment Fund, to provide money through low-interest loans, primarily for local and independent retailers operating in downtown Denver.

The DDP also announced new leadership for its boards.

  • Downtown Denver Partnership Inc. board: Chair, Kim Koehn, Corporex Colorado LLC; chair-elect, Jerry Glick, Columbia Group Ltd.; secretary, Sharon Linhart, Linhart Public Relations; treasurer, Ron Tilton, FirstBank of Denver; immediate past chair, Gene Commander, Shughart Thomson & Kilroy P.C.
  • Downtown Denver Inc. board: chair, Brad Buchanan, Buchanan Yonushewski Group; vice chair, Bruce James, Brownstein Hyatt Farber Schreck; secretary: Cole Finegan, Hogan & Hartson LLP.
  • Denver Civic Ventures Inc. board: chair, Ferd Belz, Cherokee Denver LLC; vice chair, Gary Desmond, AR7 Architects; secretary, Joe Vostrejs, Larimer Square.

The DDP named the following award winners:

  • Honorary Partner Award -- Rus Heise, RBC Capital Markets, "for his significant contribution over a period of 20 years to the Downtown Denver Partnership."
  • Volunteer of the Year Awards -- Sharon Linhart, "for her leadership as chair of the partnership's Democratic National Convention Task Force and Public Relations Sub-Committee"; Susan Powers, Urban Ventures LLC, "for her work as chair of the Partnership's Housing Council, and leadership in advocating for affordable housing in Downtown Denver"; Mike Zoellner, Red Peak Properties, "for his active role as a member of the Business Improvement District board and the Partnership's Revitalizing the Core Task Force as well as his advocacy to revitalize underutilized properties on the 16th Street Mall."

The President's Award went to Service Group Inc., "for their daily contributions enhancing the Downtown Denver environment through successful clean and safe programs including litter control, mechanical sweeping, steam cleaning and downtown ambassadors."

 

www.judesandvall.com

0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 10 2008 12:29PM

Colorado ranks No. 5 in CNBC's survey of Top States for Business

business

Colorado ranks No. 5 in CNBC's survey of Top States for Business

 

By The Denver Post

 

Article Last Updated: 07/10/2008 01:51:34 AM MDT

 

CNBC announced Wednesday that Colorado ranked No. 5 among America's Top States for Business with a score of 1,135 out of a possible 2,021 points in an exclusive survey. Last year, Colorado ranked seventh.

According to the survey, Colorado ranked in the top 10 for business friendliness and quality of life and in the top 15 for economy, access to capital, workforce and technology and innovation.

Colorado was among the first states to be hit by the housing crisis, but its efforts to court "The New Energy Economy" are paying off, CNBC said in a statement. The Denver Post

How they stack up

CNBC's ranking of best states for business:

1. Texas

2. Virginia

3. Utah

4. Idaho

5. Colorado

6. North Carolina

7. South Dakota

8. Georgia

9. Iowa

10. Minnesota

11. Kansas

1 comment • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 10 2008 12:25PM

5 Ways to Build an Online Marketing Relationship with Your Clients

An article from RISMEdia.com, reports that according to real estate newsletter marketing expert Simon Payn, as the housing market in the United States shifts, successful Realtors are focusing on traditionally effective marketing techniques to make sure they thrive.  Payn said, “Realtors who want to continue being successful understand the need to build a relationship with their clients, past clients and sphere of influence.”  Payn advises Realtors to provide valuable, interesting and entertaining information in marketing campaigns to prove your expertise and to be of genuine service to your clients and prospects.  He also suggests that it is important to have a continual presence in clients’ lives to maintain a strong connection with them.  Building relationships with clients and prospects is a long-term project that requires communicating with them on a regular basis for months and years to get the best results.  Finally, understand that marketing is an investment, not a cost.  Payn believes a strong relationship with your farm and clients is like an insurance against a slow housing market.
3 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 10 2008 12:16PM

Weld, mountain counties see rapid growth

An article from The Denver Post, reports that according to new data released by the U.S. Census Bureau, many of Colorado's mountain and rural counties are growing faster in population than the state's metro-area counties.  Weld County saw a 33% increase in population since 2000, adding almost 61,000 residents.  Eagle County, which includes mountain towns Gypsum and Vail, saw a 22% increase in population to more than 51,000 people since 2000.  Elizabeth Garner, state demographer said, "The Western Slope is growing fast compared to the Front Range — except for Weld.  The area depends on a different economy than the Front Range."  Garner added that oil and gas development, second-home owners and retirees are creating jobs and pushing growth.  Douglas County was an exception and saw the highest percentage increase for a county in the state with a 51% jump in population from 2000.  Denver increased its population by almost 33,000 since 2000, and Aurora by almost 34,000.
http://www.denverpost.com/news/ci_9833060
0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 10 2008 12:15PM

Mortgage Tip

Effective August 1, 2008, Fannie Mae is instituting a 2-year waiting period before someone who sells their house in a short sale can qualify for a loan that will be sold to Fannie Mae.  Currently, there are no guidelines regarding how long a buyer must wait after a short sale.  There will be no exceptions to this rule for extenuating circumstances.


0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • July 09 2008 05:49PM