The Realty Buzz

The Sun Setting on Home Prices?

2011-01-06T22:49:00.000-08:00

Another video courtesy of "Jim the Realtor". Enjoy the sunset, the ocean view, and the freeway noise. This Southern California home could be yours for more than a few pennies!

S&P Case-Shiller Housing Price Index - October 26, 2010 Release

2010-10-26T07:27:00.000-07:00

S&P/Case-Shiller Home Price Indices - Prices stable today and headed lower tomorrow was the story of the last housing report. Today, as expected by most analysts, the report points to housing prices heading lower again.

"A disappointing report. Home prices broadly declined in August. Seventeen of the 20 cities and both Composites saw a weakening in year-over-year figures, as compared to July, indicating that the housing market continues to bounce along the recent lows," says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. Over the last four months both the 10- and 20-City Composites show slowing growth, after sustaining consistent gains since their April 2009 troughs.

"The month-over-month growth rates tell the same story. Fifteen of the 20 MSAs and the two Composites saw a decline in the month of August as compared to July levels. The 10- and 20-City Composites fell 0.1% and 0.2%, respectively. Indeed, the housing market appears to have stabilized at new lows. At this time, it does not seem that any of the markets are hanging on to the temporary momentum caused by the homebuyers' tax credits."

(S&P/Case-Shiller Home Price Indices -

Click on chart for larger image in same window)

In consideration of current economic conditions and recent housing data that continues to point towards increasing inventory levels in many locales, the downward pricing trend highlighted in this report should continue to be reflected in the next S&P / Case-Shiller release.

Actual S&P/Case-Shiller Housing Price Index PDF report: "Home Prices Increases Slow Down in August According to the S&P/Case-Shiller Home Price Indices".

More to come ...

CoreLogic: Home Price Index for August 2010

2010-10-25T12:45:00.000-07:00

According to the CoreLogic Home Price Index released reflecting August 2010 data, home prices declined 1.5% year over year nationally and values appear to be be trending lower:

"Price declines are geographically expanding as 78 out of the largest 100 metropolitan areas are experiencing declines, up from 58 just one month ago” said Mark Fleming, chief economist for CoreLogic."

12 Month House Price Index Change: Single-family combined series

(Click on chart for larger image in same window)

12 Month House Price Index Change: Single-family combined excluding distressed series.

(Click on chart for larger image in same window.)

From a national perspective, CoreLogic's report continues to paint a grim housing picture and the trending lower numbers point to more housing woes ahead.

Will the Real Owner Please Stand Up?

2010-10-23T09:28:00.000-07:00

It's a three ring foreclosure circus. It would actually be funny if this really didn't impact and negatively affect real people.

When will these institutions every be held accountable for their criminal practices? What a mess!

The Mortgage Mess

2010-10-19T08:11:00.000-07:00

It's definitely good politics to claim that you have to protect the private sector, lumping small business owners who truly compete in a free market with the uber / multinational corporations that successfully lobby our congressmen and women on a daily basis to write the laws that create the market they want.

Many good arguments / points made in this video regarding the banks, the mortgage mess, and the housing market, but minutes 6:00 - 7:00 is definitely a good listen.

As Barry Ritholtz noted towards the end of the video, "we have the best Senate money can buy!"

Disgusting, but quite clearly true if you remotely pay attention to how things really operate!

Do Housing Fundamentals Really Matter?

2010-09-30T09:01:00.000-07:00

If you're like me, you spend countless hours pouring through data trying to make sense of the underlying economic fundamentals to understand what's happening today and what the data means for tomorrow. In short, we're always looking for the trend to clue us into what we hope to be sound investment decisions.

Needless to say, rolling out of bed and waiving your finger in the air to determine which way the wind is blowing is not going to be a consistently successful approach. However, at a certain point, we can outsmart ourselves by basing our decisions solely on what the underlying fundamentals are telling us.

How many home buyers are basing their decisions on the latest S&P/Case-Shiller housing price index? Gee, let's hold off on making this purchase since the S&P/Case-Shiller index is a lagging housing indicator. Looks like Diesel consumption picked up for the month of ..... More QE2 is coming in Q4? Temporary Census Bureau jobs are beginning to clear the system and will have less of an impact on the employment picture moving forward. You get the point.

Spending time to get a grasp on the fundamentals definitely helps to give clarity to our decisions, but what good are our decisions if the overwhelming majority isn't using the same data and is making decisions based on a completely different perspective? Isn't this different perspective just as important (if not more important) to understand and to take into consideration?

Courtesy of Jim the Realtor, check out the video below regarding an auction of a lot in Southern California. Jim notes that the data points to a certain number regarding the sale of the lot, but the actual final sales price defies the data. In fact, pushing forward, the sale (if it goes through) will greatly skew the data / comps for the next potential buyer in the same neighborhood.

Human nature and the countless intangibles drove this sale while the data floated out the window ... If you think this is an isolated incident or this only happens in high-end micro housing markets, think again!

S&P Case-Shiller Housing Price Index - September 28, 2010 Release

2010-09-28T08:44:00.000-07:00

S&P/Case-Shiller Home Price Indices - Prices stable today and headed lower tomorrow?

New York, September 28, 2010 – Data through July 2010, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the annual growth rates in 16 of the 20 MSAs and the 10- and 20-City Composites slowed in July compared to June 2010. The 10-City Composite is up 4.1% and the 20-City Composite is up 3.2% from where they were in July 2009. For June they were reported as +5.0% and +4.2%, respectively. Although home prices increased in most markets in July versus June, 15 MSAs and both Composites saw these monthly rates moderate in July.

(S&P/Case-Shiller Home Price Indices -

Click on chart for larger image in same window)

The general consensus seems to be that the next S&P/Case-Shiller report will begin, on balance, to show declining numbers.

I agree ...

The September 28, 2010 S&P/Case Shiller report represents data from May, June, and July. The next report will highlight data from June, July, and August. Couple extremely weak new home sales and existing home sales in July with typical seasonally slower sales in August, and we have the right recipe for further housing price declines as noted by the S&P/Case-Shiller housing price index. Furthermore, recent economic data doesn't give us any reason to believe that the future housing price numbers will be bolstered by an unexpected positive economic influence. In fact, there will still be marginal support from the federal housing tax credit since the closing date to receive the credit on a home purchased during the incentive period has been pushed out to September 30, 2010.

The chart below will give you a look at what happened in your neighborhood.

(S&P/Case-Shiller Home Prices -

Click on chart for larger image in same window)

Actual S&P/Case-Shiller Housing Price Index PDF: - Home Prices Remain Stable Around Recent Lows According to the S&P/Case-Shiller Home Price Indices

Housing Bubble Rant - My Two Cents

2010-09-23T16:13:00.000-07:00

During my usual day to day scanning of real estate and economic news, I came across this opinion article over at Inman news, "When will real estate prices rise? Ask the feds". The author, Sean O’Toole, makes some points regarding past and present U.S. housing bubbles that brought some underlying frustrations to the surface regarding my personal feelings on "how things really work". My frustrations are not directed at O'Toole!

Initially, O'Toole asserts that past and present housing bubbles are not the result of "irrational behavior on the part of buyers ...".

Obviously, financial bubbles couldn't be created without a market of buyers buying. Furthermore, this housing bubble wouldn't have been helped along if buyers didn't get caught up in the buying frenzy based on the "whose house increased in value more in the past two weeks" cocktail party conversations. "We're all investors now!" But, let's face it, this is human nature.

As I'm sure many of you have, I've read countless articles and endless reactions by people who elevate themselves to a high and mighty platform to simply pass negative judgement on the vast majority who got caught in this housing bubble / financial trap. Oftentimes, these very same individuals have what I consider to be an extremely arrogant attitude and a "how is this going to negatively impact me" perspective on many things. They also tend to bunch everyone into a group of "should have known better", "greedy individuals", whose "stupidity and laziness chasing a cheap buck" is now costing them money through government action bailing out the masses. Are they right? Are these "should have known better" people who fell into the trap the real problem? Is the government to blame? O'Toole does direct some blame to the government:

"Every single significant increase in home prices in the last 100 years was immediately preceded by government intervention or stimulus. The evidence is irrefutable. Every time the government works to make housing more affordable, prices rise.

This actually makes perfect sense. Buyers always have, and always will, buy as much home as their banker tells them they can afford. If you make home financing more affordable, you increase the amount buyers can pay. But instead of getting more home for their money, prices simply rise to reflect the change."

Let's take O'Toole's point one important step further to illustrate why those with the high and mighty attitudes I described above are, in my opinion, largely off base in attacking the wrong people while giving a pass to those at the epicenter of many of these problems. On its most basic level, you can deduce nearly any argument down to simplistic, black and white, terms, but, in reality the housing / economic woes are the result of systemic issues now wreaking havoc in this country. Unfortunately, the overwhelming message and media blitz is to look towards fixing your neighbor to solve the problem. Businesses walk away from assets each and every day, yet many cast morality judgement and consider their neighbor to be the irresponsible one for walking away from their poorly performing asset.

To illustrate this, let's start with a simple question. Why wouldn't you buy a house during the housing boom if you had the means?

Housing values were consistently climbing and the access to easy, affordable money, bought you much more. Unless you are inclined to follow the financial markets / trends on a regular basis, many people wouldn't have been concerned or even thinking about what may happen a few years down the road. By no means do I believe that ignorance makes for a good excuse, but the reality is that, for various reasons, people aren't informed on many issues. We see this type of behavior every day on countless topics. Even though we can agree that people should take the time, the reality is they don't. Business professionals know this and shouldn't use this angle as a means to exploit the unsuspecting. However, all too often, they do. And, those who enabled these exotic loans knew this and used every opportunity to exploit this weakness to generate a dollar. These enablers didn't do the right thing and inform their clients that the short-term benefits of these types of loans could and, most likely, would turn into a detrimental tool in the long run. Furthermore, and most importantly, let us not forget that the push to move these types of loans came from the very top echelon of these financial organizations. Again, it's human nature to trust the experts you turn to. In fact, I'm sure many of you have been in a situation where you have lost some money because you have gone the extra step to put trust, loyalty, and giving someone a chance, over what you would knowingly consider the "smart" business move.

If you were told, "the loan is good, but beware that ...." many people would have thought twice before proceeding. Of course, plenty of people would have ignored the caution, but, I believe a larger group would have listened to basic common sense and reason. If your breaker goes out in your electrical panel and the electrician tells you the entire panel needs to be replaced because there's an inherent fire hazard, would you replace the panel? Some would, other's would opt to get a second opinion. If the second opinion came in the same, would you now replace the panel? Most of the remaining people would based on the advice their trusted experts gave them. And, this is what happened during the recent housing boom. The majority of experts you went to, regardless of lending institution, hyped the very same products that are now destroying countless lives. So let's look at it again. As a consumer, it appears like the environment to buy a home is good. Prices are going up, your money is stretching to buy you more, and to verify your sentiments, your mortgage advisor gives you the thumbs up, "I've got just the right mortgage to get you what you want!". After leaving Wells Fargo, they tell you the same at CHASE, Wachovia, Washington Mutual, Bank of America, and the list goes on and on.

O'Toole finalizes his analysis by stating:

"Hopefully at this point you are seeing a bigger picture. Home-price appreciation is largely just inflation, and housing bubbles are a recurring failure of our government to learn from its past mistakes. Rather than looking at the big picture, government officials and our representatives continue to jeopardize our future with the latest quick fix to a problem they don't seem to understand."

In wrapping up my thoughts, I don't totally agree on this point made by O'Toole. Yes, the government is involved in pushing through policy, however, who is really influencing our government? Where do these policies and laws come from? Doesn't the countless millions of dollars being spent and lobbied every day by the uber / multinational corporations have a major impact on dictating government policy? How many members on the Hill are influenced to the point where the decisions they make don't necessary fall in line with what would be the best policy for the majority of people? It's tough to get re-elected these days without a few dollars backing you, isn't it?

At the end of the day, we the people need to address the real problems faced by this country not the contrived crap about your neighbor being the root of your problems because he or she belongs to a different religion, has a sexual preference you're not aligned with, looks differently than you, etc. This is the smoke and mirrors that the powers at be want us to be consumed with. When we're arguing amongst ourselves, we don't have time to pay attention to the real issues. Don't continue to fall for this. Yes, your neighbor got sucked into the trap, but your neighbor didn't create the environment that enabled the known behavior and certainly wasn't the root cause of this housing / financial mess.

Nobody wants the government involved unless it is an issue that is near and dear to their hearts and promotes their ideology! "Let the free markets work," they cry! Wouldn't that be great, a world where the uber / multinational corporations competed in a free market like the rest of us rather than spending unlimited funds to write the laws that enable their predatory behavior and create the market they're looking for.

Disclaimer: I am a business owner. My livelihood comes from two CA S-corporations. I'm not anti-business, I'm anti-unfair monopolistic practices that take advantage of the masses to pad the financial bottom line. The majority of people work hard for an honest living and I am in business to make money, but not at the expense of using my knowledge and expertise to fool unsuspecting individuals into paying me for a detrimental or unnecessary service.

For Sale By Owner Sign Says it All

2010-09-17T23:55:00.000-07:00

When you can't get along with your neighbor, get a sign made, plop it in the yard, and move on. It's that simple!

Buy Now!

2010-09-16T19:34:00.000-07:00

Based on being a "natural contrarian", Brett Arends is giving the buy sign for housing. He's not suggesting that homes have bottomed in every market, but does believe it's a good time to look in many, especially since mortgage rates remain extremely low.

Needless to say each purchase / deal has to be evaluated on its own merits, but I do agree with many of the points that Arends makes. Even if homes haven't quite bottomed in your market, most likely they have already tanked from boom highs. Furthermore, the glut of inventory is your friend as a buyer. Even if homes in your market stand to fall another 10%, what value does this create for you if interest rates move a point higher and tightening supplies force you to submit a strong offer to compete against other competition?

In our own experience in the Phoenix, AZ housing market, it has been tougher to find our opportunities this year due to the huge increase in investor activity. Even though values have trended lower in some segments of the market, the increased competition has led to higher purchase prices, a decrease in negotiation leverage, and smaller operating margins.

As always, run the scenarios before you make a blanket assertion on whether or not it's the time to buy, since value is not always what it appears to be!

Rethinking Homeownership?

2010-09-15T21:26:00.000-07:00

A Business Insider article labeled this recent Time Magazine cover story as, "great news for housing market". Needless to say, you're out of your mind to use a media cover story to guide your home-buying decisions. There's no doubt that we can outsmart ourselves by complicating matters, but we can certainly do a similar disservice by taking too simplistic of an approach.

Media and sensationalism go hand in hand these days. These dramatic statements sell product and help the bottom line. In reality though, if you have the ability to purchase a home (especially if you're a first-time home buyer), should we really believe that buying a property discounted 50% plus at 3.5% - 4.5% interest rates doesn't make sense? I'm obviously painting with a broad brush and can't speak to the validity of every opportunity in every market, since all deals aren't created equal and there are plenty of homes out there that still shouldn't be purchased despite how far they have already fallen. However, there are definitely some great housing opportunities out there carrying extremely affordable price tags. In fact, some price points make it much cheaper to own rather than to rent even when factoring in insurance, property taxes, and maintenance.

So ... no, I'm not rethinking homeownership and neither should you. The housing picture remains grim, but don't check your brain at the door and get absorbed in this nonsense. What's next, "Rethinking Investing?". We all know that financial independence comes from a working wage, right? Just ask Bill Gates, Warren Buffet, and nearly every other financially well-off individual.

CoreLogic: Home Price Index for July 2010

2010-09-15T15:30:00.000-07:00

CoreLogic reported their home price index to be flat for July, 2010 and noted underlying weakness in housing as a growing number of markets are declining since the expiration of the federal tax credit:

SANTA ANA, Calif., September 15, 2010 – CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today released its Home Price Index (HPI) that showed that home prices in the U.S. remained flat in July as transaction volumes continue to decline. This was the first time in five months that no year-over-year gains were reported. According to the CoreLogic HPI, national home prices, including distressed sales showed no change in July 2010 compared to July 2009. June 2010 HPI showed a 2.4 percent* year-over-year gain compared to June 2009.

CoreLogic made it a point to reiterate that the weakness in housing is spreading and the weakness is continuing to grow relative to market conditions a handful of months back:

"Although home prices were flat nationally, the majority of states experienced price declines and price declines are spreading across more geographies relative to a few months ago. Home prices fell in 36 states in July, nearly twice the number in May and the highest since last November when national home prices were declining," said Mark Fleming, chief economist for CoreLogic.

12 Month House Price Index Change: Single-family combined series

(Click on chart for larger image in same window)

12 Month House Price Index Change: Single-family combined excluding distressed series.

(Click on chart for larger image in same window.)

This report continues to highlight the difficulties that remain in place for the U.S. housing market. The lack of jobs and disappearing stimulus show how fragile the overall housing market is. Even the absurdly low interest rates aren't enough to offset the poor underlying fundamentals.

Click the following link to view the actual CoreLogic report: CoreLogic Home Price Index Remained Flat in July [Actual PDF Report].

Real Estate and Economic Links

2010-09-08T23:58:00.000-07:00

BiggerPockets.com:
* How Does Your Bank Define “Performing Loan”?

Inman News:
* Near-record affordability in real estate

HousingDoom.com:

* Is Using A “Victim Strategy” In The Housing Market So Bad?

MSNBC.com:
* Home lending pace rises; most are refinancings

Calculated Risk:
* Lawler: Again on Existing Home Months’ Supply: What’s “Normal?”
* Fed's Beige Book: Continued growth, but "widespread signs of a deceleration"

HousingWire.com:
* Double dip in home prices coming in 2011: Clear Capital

Real Estate and Economic Links

2010-09-07T21:59:00.000-07:00

BiggerPockets.com:
* Housing Market Insight – Week of September 6th

Inman News:
* Most bankers don't see credit easing

RealtyTimes.com:
* From "Double Dip" to Double Opportunity

New York Times (Economix):
* Mortgage Rates and Home Prices
* Interest Rates and House Prices: A Murky World

Calculated Risk:
* Mortgage Rates and Home Prices
* Housing Starts and Vacant Units
* Housing Completions will set new record low in 2010

Landlord, Tenant, and an Eviction on Rye

2010-09-07T18:50:00.000-07:00

This kind of news gets to be awfully exasperating. When do people learn to simply get along and work together? Does everything have to come down to a lawsuit? Are the issues needing to be addressed here so insurmountable that all parties being impacted can't get into a room, have a civil discussion, and find an amicable solution? Oh right, I'm assuming that people are willing to find some middle ground. How simplistic and foolish of me!

Jamie Dimon Singing the Real Estate Blues

2010-09-06T00:00:00.001-07:00

The Los Angeles Times blog recently posted an article titled, "Jamie Dimon's real estate woes" noting that Dimon hasn't been immune to the housing downturn either as he has had to drop the asking price of his Chicago mansion:

"The mansion, where Dimon lived back when he headed up Bank One, originally went on the market for $13.5 million in 2007. The bad real estate market has forced a series of reductions that have brought the listing price down by nearly half, to $6.95 million."

As a result of Dimon's misfortune, the author (Daniel Popper) states:

"As homeowners have struggled to modify their mortgages with JPMorgan Chase & Co., more than a few have probably felt flashes of anger toward the company's chief executive, Jamie Dimon ...... It may be some comfort to these folks, then, to know that Dimon has not been immune from the problems of falling home prices."

I'm the last person to sympathize with the likes and ranks of people like Jamie Dimon, but I don't wish him ill will or find comfort in his circumstances despite not liking to deal with CHASE bank on any level.

Unfortunately, the greed and irrational exuberance at the highest levels (Jamie Dimon's world) of these uber and / or multinational corporations has created turmoil for the vast majority of people in this country. Furthermore, countless hardworking Americans have encountered these incredibly tough times to no fault of their own as a result of this unregulated mess and the slick maneuvering these uber banks use to assess account and various transaction fees.

For Jamie Dimon, the economic mess that he was complicit in developing (or stood by allowing it to happen) has now landed like a big pile of crap squarely in his mansion's backyard. Welcome to the sober party! Unlike many Americans, I'm guessing he'll fare a little better even if he does have to get more aggressive with price drops on his modest abode.

Tony Robbins Warns on Housing and the Economy

2010-09-05T23:59:00.000-07:00

Tony Robbins gives a "special warning" regarding where he believes the U.S. economy is headed:

" ... the financial world, as you know it, is about to change radically at levels you won't even imagine and it's coming really quick. I can't tell you when, but I know it's coming quick; sometime in the next three, four, five, six, seven months it's going to happen".

In the same camp as many economists, Robbins' is predicting more difficult times around the corner (stock market and housing). In fact, Robbin's is citing that the U.S. economy is on the cliff again as the stimulus effect is weaning.

Times are difficult, but it's certainly not productive to be frozen by fear and to concentrate on everything that's not working. In fact, it's difficult to operate at any level when your actions are being guided by fear and negative emotion. As Robbins' states, "Put yourself in a position where you educate yourself."

Positive thinking and education don't guarantee that everything will come out rosy. However, simply look around to see what fear, ignorance, and negative thinking get you. It's a waste of time and leads to many bad and uniformed decisions. We all know times are challenging. How we deal with it will largely determine how we're going to get through it. Cliche, yet true.

For obvious reasons, millions are made during the most dire economic conditions. It's our job to figure out how we're going to be one of those who prospers.

Embrace the challenge!

Jim the Realtor, the Courthouse Steps, and Insanity

2010-09-04T12:48:00.000-07:00

Good ol' public trustee auction house bidding action at the courthouse steps courtesy of Jim the Realtor. Despite watching the back and forth bidding action driving the final sales price of this property up, the intriguing point to note here is Jim the Realtor's following acknowledgement [actual YouTube posting by Jim the Realtor]:

"I submitted an offer of $600,000 on this house on July 1st when it was listed as a short sale for $649,000. The sellers didn't respond, but I think the bank would have wanted to know about it."

Keep in mind this home sold at the courthouse steps for $540k, despite Jim the Realtor having offered $600k when the home was originally listed as a short sale. As if we needed any more examples of how flawed the short sale process is. In most instances, loan modification workouts have been as pathetically unsuccessful as well.

Awfully hard to operate under utter incompetence.

Business as Usual

2010-09-03T23:43:00.000-07:00

The vultures are always out protecting the bottom line. Money over people. So many people are worried about the government meddling in their affairs yet these same individuals don't seem to have any concern for the actions and behavior of the uber corporations running the government. Who's really pulling the strings?

A Positive Spin on Housing

2010-09-02T22:32:00.000-07:00

Tired of hearing all of the negative news on housing? I am.

There's no doubt the U.S. housing market and broader economy still face many challenges. In fact, you'd be a fool to ignore this reality. However, at a certain point, it becomes counterproductive to simply concentrate on any one aspect of any subject matter since allowing such one-sided concentration will begin to overshadow and ultimately suffocate other realities.

The discussion on many real estate and economic blogs this past week regarding the latest S&P Case-Shiller Housing Price Index report (released August 31, 2010) is a perfect example of such behavior. The S&P Case-Shiller housing report highlighted some positive numbers yet the analysis immediately shifted to warnings that these positive numbers where merely inflated by the federal tax credit incentive and the predicted second half slowdown would tell a much different, more negative, housing story. Even though I find myself in this more bearish camp, let's look at some other realities from a different perspective.

Despite it being quite apparent that prices have further to fall in many markets, U.S. housing prices have already tanked significantly. In many markets, current residential housing price points are dating back to 2000-2003 levels and you can find great buys dating back to early 1990 levels or beyond. Furthermore, mortgage interest rates are at historically low levels and may slip to even lower levels.

Keeping this in mind, there are reasons to be cautiously optimistic about what could be if you are an investor looking for cash flow opportunities, a first time home buyer looking for their first home, a vacation home hunter, or a private lender looking for strong returns on a low LTV deed of trust investment.

In an op-ed housing article titled, "A Dream House After All", Karl E. Case further illustrates these positive points:

Do the math. Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833. In addition, the down payment would be $42,600 instead of $60,000.

Does this mean you should go out and buy? Of course not, like any other investment or major purchase, you have to do your homework and weigh the pro's and con's of what you're looking to do based on the circumstances you're confronted with. Even though it's quite clear that the U.S housing market and economy will cause further pain in the lives of countless Americans, there are positive opportunities and data points to take into consideration despite the constant negativity that abounds.

Even Lower Interest Rates?

2010-09-01T19:36:00.000-07:00

The 10-year Treasury note yield to fall below 2%? BofA Merrill thinks so. For those who have managed to come away unscathed from the seemingly endless and ongoing downturn in the economy, mortgage rates are truly at unreal levels.

They expect the Federal Reserve to continue to try to push long-term interest rates lower to support the economy. BofA Merrill now predicts that the benchmark 10-year Treasury note yield will fall below 2% in the first half of 2011, from the current 2.58%.

If you have cash and you're looking to buy a rental property, get a mortgage for goodness sake. With such low interest rates, endless opportunities abound for strong cash flow opportunities. While the banks are giving the money away, use it and keep your cash liquid. Why wouldn't you?

If you can't qualify for a mortgage, join the large crowd. The banks don't want to lend to you. They're doing just fine making money lending back to the government.

Regardless of what camp you're in, there's no denying that interest rates are extremely low and will ultimately trend lower if BofA Merrill's prediction is correct.

Complete Article: BofA Merrill sees 'growth recession' -- and another dive in interest rates

Real Estate and Economic Links

2010-08-31T23:28:00.000-07:00

AgentGenius:

* The top ten best cities for the next ten years

* The silver lining in the real estate sector – home prices are up

Inside Real Estate News:

* Home rentals scarce

HousingWire.com:

* S&P/Case-Shiller: June home prices up 4.2% from year ago

* Zillow: 30-year mortgage rates drop to another record low

Calculated Risk:

* Existing Home Inventory declines slightly in August

* On Case-Shiller House Prices: October is the "Witching Hour"

* Case-Shiller: Home Price indices increase in June

S&P Case-Shiller Housing Price Index - August 31, 2010 Release

2010-08-31T07:38:00.000-07:00

New York, August 31, 2010 – Data through June 2010, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index rose 4.4% in the second quarter of 2010, after having fallen 2.8% in the first quarter. Nationally, home prices are 3.6% above their year-earlier levels. In June, 17 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were up; and the two composites and 15 MSAs showed year-over-year gains. Housing prices have rebounded from crisis lows, but other recent housing indicators point to more ominous signals as tax incentives have ended and foreclosures continue.

[Click on graph for larger image in new window]

San Francisco, San Diego, Minneapolis, and Los Angeles led the charge for year over year gains while Las Vegas, Charlotte, Seattle, and Tampa sustained the largest losses.

[Click on graph for larger image in new window]

Actual S&P / Case Shiller PDF Release: The Second Quarter of 2010 Saw Modest Improvement in Home Prices According to the S&P/Case-Shiller Home Price Indices

Free Home in Escondido, CA!

2010-08-31T00:38:00.000-07:00

"The company is giving away the house for free. No down payment, no closing cost, no mortgage, no joke. You want it? It's yours.

There's just one catch. The new owner will have to pay to have it hauled away from the lot on the northeast corner of West 11th Avenue and South Escondido Boulevard, where it has been since 1922.

Tom Crowley, a senior associate with Hanson Commercial, said he has heard the move will cost more than $10,000, but less than $20,000.

The new owner also should be aware that the 800-square-foot, single-story house is a fixer-upper. It has no floor, its roof needs repairs and all its fixtures need to be replaced."

Marketing, marketing, marketing! Despite the nice offer, this home clearly doesn't appear to be much of a deal after factoring in the real costs of getting this property renovated and that's if the house doesn't fall apart during the moving process!

Thanks, but no thanks. You can keep this one, Mr. Crowley!

In case you see it differently, check out our good "Haulin' House" friends over at HGTV to help with the move.

Complete Article: North County Times - ESCONDIDO: House is free to a good home

Foreclosures and the Higher-End Housing Market

2010-08-30T12:24:00.000-07:00

No real surprise that the foreclosures are starting to have a larger impact on the higher-end housing market. If you had money in savings, investment accounts (or any other vehicle), and access to credit, you have had an opportunity to throw good money after bad. Unfortunately, even for those who have money, there's only so long you can do so waiting for the economy to turn.

Complete Article: Los Angeles Times - Foreclosures of million-dollar-plus homes on the rise