Rates
What the heck is up…er…down with rates.
Federal Reserve once again, reduces their purchase of Mortgage Back Securities on Wednesday by another $10B down to $65B.
So typically this would cause rates to increase, and we all expected rates to be in the High 4’s to low 5’s by spring.
But rates have actually DROPPED over the last 4 weeks, and as of today we are at our lowest levels since November 20th. With Govie rates, i.e. FHA/VA/RD falling into the high 3’s and conventional in the low 4’s
And we can once again thank other countries for this.
About a year ago we were worried about the PIIGS or Portugal, Ireland, Italy, Greece and Spain. There markets were being crushed and their unemployment WAY high.
Well the EU bailed out Greece, Italy is always a mess, and Portugal & Spain kind of fixed themselves, and Ireland, well they just drank more whisky.
Now we have the PAT’s, or Puerto Rico, Argentina & Turkey. With the special focus on Turkey, who this week raised their rate to stave off an economic collapse.
This has caused bond traders to flee S. American investments and Turkey Investments and flee to US bonds, ahhh US debt, we have lots to give, but we are not going anywhere anytime soon.
So bond traders have pretty much ignored US data over the last week, which has been OK to good.
I suspect that as long as these countries are in the news, which it looks like they will be for a while. I am in a neutral stance right now, maybe leaning towards a float pattern.
Buyer’s Market
In 2011, (see past blogs) I boldly predicted that the market would go from a buyer’s market to a seller’s market around March 2012. And I hit that nail right on the head, should of bought a Lottery ticket.
Well now, I am going out on a limb again, I am thinking that we are once again going to switch, from a Seller’s Market to a Buyer’s Market, and again I think about March.
Here is the reason why:
1-Rates, although they have risen from our bottom of 3.25%, in 2014 we have not seen the increases once predicted, mainly due to factory outside of the US. So I foresee rates keeping in the 4’s for a while.
2-Builder have built tons of homes and if building permits have any indication, spring will see new spec homes pop up like Tulips.
3-More and more existing home owners are “Surfacing” i.e. come up from being underwater, and they are tired of their home, and will want to sell. We should see a nice glut of new homes on the market.
4-Data, I really like this charge, provided to me my John Hennessey with Hennessey Appraisals, here it show what a home sold for compared to what it was listed as. This is the #1 chart to look at when doing a listing presentation.
Y/O/Y on sales December, Ada County is up 12% and Canyon County is up 4%. So home are still selling, but at a reduced rate, Buyer’s Market.
So who does this hurt and help, well builders are going to start hurting, because they are going to have to take margin hits. Hurt are all those people coming on the market because they should of sold last year and now they will probably have to sell for less, albeit not much.
Help, the 1st time home buyer, home prices will be negotiated more and down, and rates are still pretty dang good!!!!
Lead Generator
Well here is a real simple one, FIX YOUR SIGNATURE LINE!
Each time you send an email out, whether it is to me, a potential client or your child’s teacher, you have a GREAT opportunity to make a advertising impression.
And make sure that you have signature lines from your Desktop, your Ipad and your Smart Phone.
If you look at my signature I cover all of the basics, my name, phone number and company name. I also have my tag line (what don’t have a tag line, get one), also I have my links to my web site, and all my social media, and I also have my BBB ranking.
So when you receive an email from me you know! What does your email signature say about you?