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Market Update

August 15th, 2007 Categories: Dublin Real Estate, Livermore Real Estate, Market Update, Pleasanton Real Estate, Weekly Market Updates

Weekly Update

Confusion, uncertainty, panic. These three forces are shaking the markets—from the level of individual home sales to the level of massive coporate buy-outs—like a bucking bronco…intent, it seems, on bringing them all to the ground.

“In the past month, the market has been behaving in ways even seasoned players have been at a loss to explain,” several reporters write in The Wall Street Journal. And this is precisely the point. Hundreds of billions of dollars have been invested in exotic hedge funds that few people can pretend to fully understand and that have been responding to the market in unexpected ways. Investors don’t even have an accurate idea of the value of those funds and related investments.

And the great bugaboo, of course, is the subprime mortgage—though subprimes are certainly not the only cause of market woes. Yes, vast numbers of defaults may be in the offing; yes, we may see the number of foreclosures rise. But the real problem today is that no one knows where the next problem will show up. Ailing loans have been stripped and tranched (split into differently-valued pieces) so that they are no longer identifiable. An investor in Shanghai may discover that he owns slices of mortgages for homes in Azusa that are in foreclosure, threatening the viability of his hedge fund.

What is clear is that nothing is clear, nothing is certain. And until we achieve some degree of certainty, the markets will remain absurdly volatile, with occasional stock market jolts that dramatically over-express the actual possible losses at hand.

We have, in short, a time of panic in which it’s impossible to predict the future direction of any stock market—indeed, of any stock. And since dicey mortgages are the demon du jour, we have lenders who’ve grown very uneasy about writing the mortgages they had no problem with a few months ago, and the organizations that bought those mortgages (though Fannie and Freddie are doing what they can to help) are no longer interested in what currently looks to them like throwing good money after bad.

We will, I believe, look back at this time with amazement and even humor. And it won’t be very long from now. The problem is that so many assumptions about how our markets work—notable among them the assumptions that we now have computers that can find the right investment under any market conditions and that it’s a great idea to invest with borrowed money—have been shaken profoundly.

In the meantime there are good lenders making loans. If you are looking at needing a Home loan for a purchase or refinance I am compiling a list of Lenders you can count on. Stay Tuned.

Written by John Kurtzer | Discussion: 2 Comments »

Market Update

August 12th, 2007 Categories: Dublin Real Estate, Livermore Real Estate, Market Update, Pleasanton Real Estate, Weekly Market Updates

Weekly Update

If anything, worries are multiplying among economic analysts that the number of defaults and, eventually, foreclosures from unraveling existing mortgages will continue to rise. What is perhaps most startling at this point, though, is that worries extend way beyond the somewhat limited world of mortgages to the entire world of credit, debt, borrowing, lending. Further, the overall economy isn’t being viewed with as much optimism as was recently the case.

Patrick Schmid of Moody’s Economy.com puts it this way: “There is no doubt that an international credit tightening is under way. It began with the U.S. housing downturn, which resulted in declining real estate prices. As adjustable-rate mortgages set higher, payments became more difficult for many homeowners—especially those whose credit rating was subprime to begin with. Many subprime lenders, whose business models were based on continually rising house prices, faced losses as defaults and foreclosures increased. Politicians became melodramatic over the housing dilemma, putting pressure on regulators, who in turn called for tighter lending standards. The next step was a spike in financial volatility, and some likely market overreaction,”

“All told,” Schmid concludes, “today’s market shows some elements of a credit crunch—but not enough to warrant pinning the label on with certainty.”

Whether or not we want to call it a “crunch,” however, has little bearing on the fact that the markets are clearly full of concern and, in some cases, incipient panic. Things get very confusing when fears start to roil the market: We see the 10-year T-bill rate fall heavily at the same time that mortgage rates edge north, for example. There is no explaining it. It will take time for the markets to sort out their emotions (or, more specifically, their reading of our economy’s future).

Until then, we would be wisest, one suspects, to take most of the conclusions put forward by economic analysts with a massive grain of salt. We’re in not-make-sense territory, watching with justifiable concern to see if defaults and foreclosures rise to worrisome heights…if lenders show even more reticence about making the kinds of loans they were making all day long just a few months ago (especially the huge loans made for corporate buy-outs and restructurings)…and if the real estate market can weather the storms and do what it does best, which is simply to focus on the buying and selling of personal residences. There is still reason to put a great deal of faith in real estate, as we’ll likely see in months to come.

Written by John Kurtzer | Discussion: No Comments »

Open Sunday 1:30-4:00 Forest Glade Estates

August 11th, 2007 Categories: Livermore Real Estate

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JUST REDUCED Exquisite Home in Desirable South Livermore

August 3rd, 2007 Categories: Livermore Real Estate

**OPEN HOUSE**

Sunday, August 5, 2007 1:30-4:00

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Market Update

July 25th, 2007 Categories: Dublin Real Estate, Livermore Real Estate, Market Update, Pleasanton Real Estate, Weekly Market Updates

Weekly Update

“The housing market has yet to hit bottom,” says Moody’s Economy.com repeatedly. Sadly we are inclined to agree, though we all need to remind ourselves that life does go on—as do real estate sales and purchases and refinancings.

And we’re not just being glib here. The Mortgage Applications Index (below left) continues to hold at strong levels, this week spotlighting the work being done to refinance troubled homeowners into workable mortgage loans. Refi applications were up a solid 4.9% after weeks of declines. News is out today, too, that several eastern states are offering money to help troubled borrowers do the refinancing they need to do.

At the same time, though, the 7.5% decline in the number of permits taken out for new construction does suggest that home-building hasn’t yet reached a bottom, and that is doubtless the result of builders thinking the market for homes hasn’t yet scratched the bottom of the barrel.

The weakness is underscored by the financial markets: We hear today that two of the Bear Stearns hedge funds made up largely of securitized subprime loans are considered nearly worthless at this point. Investor money just doesn’t want to go there—and we can conclude that there is further to fall before a recovery can begin for such investments…and such mortgages.

Later today, we’ll see the report on June’s existing home sales, followed in a couple of days by the report on new home sales in June. Sadly, these will likely reinforce the negative view of the real estate market, which will serve to slow sales even further.

Careful observers of the nation’s economy are easily finding reasons for concern, though the stock market indices seem intent on walking ever higher on the yellow brick road. The long-inverted yield curve, in which short-term interest rates remain slightly higher than longer-term rates, refuses to revert to what most of us consider “normal.” The financial markets are walking a high wire, carefully avoiding the fall that could result from a loss of confidence in hedge funds and debt instruments. And the dollar is lower against foreign currencies than it has been in thirty years. There may be silver linings here (like the possibility that the weaker dollar will help erase long-term international trade imbalances, easing our current account deficit), but it is difficult not to suspect that we’re finding medicinal uses for poison ivy if we assert that this financial poison is good for us. We will indeed get through all of this, but it is all rather unnerving, to say the least.

Written by John Kurtzer | Discussion: No Comments »

Exquisite Home in Desirable South Livermore

July 23rd, 2007 Categories: Livermore Real Estate

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JUST REDUCED! Custom Craftsmanship in this Forest Glade Estates Home

July 19th, 2007 Categories: Livermore Real Estate

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The Importance of a Buyer’s Checklist

July 16th, 2007 Categories: Dublin Real Estate, Home Buyer Tips, Livermore Real Estate, Pleasanton Real Estate, Uncategorized

It is important to review and complete a buyer’s checklist prior to shopping for your home. Narrowing down the number of homes that meet your specific criteria can go a long way towards streamlining your home search.

Developing the parameters for your home search will also allow your professional real estate agent to gather information on the homes that fit your home search criteria and eliminate those homes that would waste your valuable time.

When you discuss the buyer’s checklist with your real estate agent, you will want to be prepared to review your “wants” versus your “needs”. For example; a need would be a minimum amount of square footage for living comfortably, and a want would be the color of carpet in the home. Think of the “needs” as necessary and the “wants” as items that possibly could change or be added later.

Written by John Kurtzer | Discussion: 1 Comment »

Top 100 Best Places to Live – Livermore

July 12th, 2007 Categories: Livermore Community Info, Livermore News, Livermore Real Estate

Recently, in 2006, Money Magazine named Livermore, California in the Top 100 Finalist of "Best Places to Live".

To be exact, Livermore placed 31st. Here are some of the details as reported by Money Magazine:

The median family income for Livermore, California is $92,989 which is higher than the Best Places average of $76,893.
Personal and property crime risk in Livermore, California is well below the National average.
The air quality index is remarkably higher than the National average.

Certainly the average high temperature of 89.1 degrees in July and the average low temperature of 37.4 in January help to make Livermore a desirable place to call home.

As your California real estate experts, we serve the areas of Livermore, Pleasanton and Dublin. Click here to view the area map. We would be happy to assist you in making your home purchase here in one of the "Top 100 Best Places to Live".

Send us an email if you would like to see the detailed report of Livermore’s ranking on Money Magazine’s Best Places to Live.

Written by John Kurtzer | Discussion: No Comments »

Market Update

July 11th, 2007 Categories: Dublin Real Estate, Livermore Real Estate, Market Update, Pleasanton Real Estate, Weekly Market Updates

Weekly Commentary

We can sense a trend now. Mortgage rates are gradually rising. The number of new applications for purchase money mortgages remains relatively strong, though the multiple applications from most prospective homebuyers inflates the number of expected sales. New home sales continue to fare better, generally, than do sales of existing homes.

Let’s look at a couple of these aspects of the market a little more closely.

It is actually somewhat amazing to this observer that the Fed has remained so concerned about the possibility that inflation would rise—but it has (at least, in its public pronouncements). There is a general belief that the economy will continue to grow at an adequately rapid pace, despite the slowing of the real estate market. So far, this seems to be true. It is difficult, though, to be confident of this unless the real estate market remains fairly warm.

In the context of this belief, however, it makes sense for interest rates to climb gradually out of the deep lows they recently experienced…back to more “normal” levels. (This is all a matter of perception, of course. Bill Gross, the bond market guru, seems to be certain that the Fed will lower the fed funds rate within the coming six months, as the subprime mortgage problems continue to erode both the real estate market and overall credit quality.)

What we have to the left, in any case, are the average interest rates on mortgage loans currently being originated. It is worth reminding you that these are almost always higher than the best available rates, which are published by bankrate.com and other sources. The average rates, published by HSH Assoc., tend to be a better initial guide to the current market for potential borrowers, because they may be able to do better, whereas with the best available rates, they are very likely to face higher rates for their own loans.

As for the better sales performance from new homes than from existing homes, the fact is that builders tend to have better promotional techniques at hand for a market like this. They can offer to pay the buyer’s points, to help the buyer sell his or her own home, to throw in landscaping or carpeting for free. Notice, though, that private homesellers can do many of these things, including interest rate buydowns for their buyers. Perhaps the existing homes market would improve somewhat if private sellers studied what is working fairly well for new home builders.

Written by John Kurtzer | Discussion: 1 Comment »

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