NCW Real Estate Blog

How will the Chrysler and GM deals raise mortgage rates even further than what we saw last week?  Simple.  The Obama administration seems unconcerned over damage to the credit markets in his quest to reward the United Auto Workers by trampling laws and legal precedent regarding corporate debt.

That is causing a loss of confidence.  That is going to make mortgage rates go up! 

From James Glassman at the New York Times:

What’s my interest in this? I head a nonprofit group that encourages developing nations to adopt policies that will lead to prosperity — starting with transparency and the rule of law — and hold up America as a model. Yet in its high-handed dealings with Chrysler and G.M., the Obama administration reminds me of an irresponsible third-world regime, skirting the law and handing economic prizes to political cronies. – New York Times

Tags: Finance, General Interest by Al Lorenz
No Comments »

Call me crazy, but the increased attendance and success of foreclosure auctions is a great sign for the real estate market.  I posted about Puget Sound real estate auctions that are hitting the mainstream press for the active bidding on my Chelan Real Estate Blog.

If you go back a few months, these auctions had nobody attending.  Now, it sounds like foreclosure auctions are hot in the Puget Sound area.  The inventory levels in the northwest can actually be worked through pretty quickly when the buyers come out again.  It sounds like buyers are coming out! – Chelan Real Estate Blog

Tags: Finance, General Interest, Marketing, Northwest by Al Lorenz
No Comments »

According to Zillow, Americans lost $3.3 trillion dollars in Real Estate Value in 2008, and $6.1 trillion since the peak in 2006.

Between that and the stock market, it’s no wonder folks are feeling a little less flush.

The declines mean that U.S. homeowners lost a cumulative $3.3 trillion(3) in home values during 2008, with much of that loss coming in the fourth quarter. Homeowners lost $1.4 trillion during the fourth quarter alone; more than the $1.3 trillion lost during all of 2007. Since the housing market’s peak in 2006, $6.1 trillion in home values have been lost. – Zillow

The article goes further to mention that the losses in the last quarter of 2008 were greater than for all of 2007 and the rate of loss is accelerating.  Seattle got a mention as a metropolitan area that experienced a decline larger than the national median a 12.1%  median home value decline in the 4th quarter.

Just keeping a little national perspective in the mix during one of our beautiful sunny days in the Lake Chelan Valley!

Tags: Finance, General Interest, Marketing by Al Lorenz
No Comments »

The national news is frightening these days.  I’m not about frightening here.  However, I’m not about ignoring the world around us either.  While we are so far in a much better position than most of the nation, we are impacted by what happens to the market nationally.  The voices that were claiming (hoping) the national situation wouldn’t have too much impact here have pretty much gone silent.

The following video illustrates the extraordinary and historical amount of printed money the Fed has dumped into the banking system that has yet to get banks lending.  Banks have money.  But it is not easy to get a loan.  The banks are sitting it out.  They know how awful many of their financial situations are.  They know option ARM recasts the next couple of years are going to be bad.  For many banks, the asset side of their balance sheets is going to suffer when overpriced real estate enters foreclosure and they have to mark it to what it will fetch on today’s market.  So, many of the banks are holding onto the TARP money so that they can bail themselves out. 

I am optimistic and know that anything can be fixed.  I am also not blind and am concerned what this will cost all of us, and our children.  Speaking for myself I will proceed, but carefully.

Tags: Finance, General Interest by Al Lorenz
No Comments »

$150 billion for bailing out AIG. Automakers want another $25 billion.  How long was it going to take for home builders to want a bailout of the area that they claim is the root cause?  We now know that answer.  The Wall Street Journal reports that home builders are indeed making a plea for federal aid to the tune of $250 billion.

The builders’ lobby is ramping up its sales pitch for a $250 billion stimulus package called “Fix Housing First,” arguing that financial markets won’t recover until home prices stop falling. They are calling for a generous tax credit for home purchases and a federal subsidy that would lower a homeowner’s mortgage rate. – WSJ

There are some pretty nifty graphs showing the housing correction has already moved prices back in line with historical price to income ratios.  However, price to rental ratios are still a bit out of line.  The Realtors and National Association of Home Builders are running these newspaper ads in Washington in support of the “Fix Housing First” proposal.

I’m not a big fan of bailouts.  We’ve already spent $350 billion.  Do you think it has helped?  How about spending another $25 billion on automakers?  We spend nearly $80 billion every year on farm subsidies and supports through the Department of Agriculture and according the the Cato Institute and many experts, it doesn’t have any positive impact.  Shouldn’t other industries be asking for their share?   What industry do you think will be asking next and what will be left to tax to pay for any of it?

Tags: Finance, General Interest by Al Lorenz
No Comments »

I don’t do much national news and am not a big fan of the bailouts.  This process is beyond shameless to me in how it has been set up to allow the taxpayer to be taken advantage of.  The SanFrancisco Chronicle, and others, are writing articles like this entitled “Are you and idiot to keep paying your mortgage?”  Who do you think the victims of this process will be?

Critics say the plan, which applies to loans owned or guaranteed by government wards Fannie Mae and Freddie Mac among others, could encourage people to suspend payments.

But what about the moral obligation to pay off a debt?

Elected officials have been chipping away at that by blaming [Read more →]

Tags: Finance, General Interest by Al Lorenz
No Comments »

Those Alt-A mortgage products, that required no proof of income or ability to pay, are targeted for $100 billion of the government bailout money.  In this scheme taxpayers foot the bill for reduced interest or principal amounts on these “Liar Loans.”

Of course, with taxpayers footing the bill, the banks don’t seem to be able to find the manpower to go through the documentation loan by loan and are “streamlining” the process.  So, if you fit a certain formula of negative equity and a variable interest rate loan, you can probably “streamline” your way to a better loan, whether you need it or not.  Those who lied in the first place to get a loan they couldn’t afford are offered a second chance to do the same, but this time at taxpayers expense.

In the blogosphere, there is discussion of even those who aren’t having any trouble paying for their loans to miss some payments [Read more →]

Tags: Finance, General Interest by Al Lorenz
No Comments »

Mortgage rates have fallen below 6% for only the second time in 2 years, with 30 year rates at 5.87% according to this article.

The lowest mortgage rates for a generation is one of the factors that caused the housing boom in the first place. So where are we, rates are getting lower again, foreign investors are entering the market due to the dollar’s valuation and prices are lower than anywhere in the recent past. Other than the continued press, things don’t look too bad for bargains. Is around this time the point where folks a couple years from now wish they bought?

Tags: Finance by Al Lorenz
No Comments »