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Foreclosures And Short Sales Distorting “Home Price Trackers”

HPI Monthly Changes From April 2007 Peak

In an echo of February’s Case-Shiller Index report, the government’s own home price-tracker — the Home Price Index — showed home values slipping between January and February 2011.

The Federal Home Finance Agency data had home values down 1.6 percent nationwide in February, on average, marking the fourth straight month in which prices fell.

Furthermore, all 9 regions posted losses from the month prior:

Mountain Region : -3.7% from January
East South Central : -0.6% from January
South Atlantic : -0.9% from January
New England : -2.0% from January

Before you draw conclusions, however, note that the data at which we’re looking has several major flaws to it.

First, it’s old. We’re now in the first week of May and the FHFA’s most recent release only covers through February, a time period ending roughly 60 days ago. That’s a long delay and today’s purchase market in Portland looks much different from the one of February.

Just ask a real estate agent and they’ll tell you — purchase activity is rising.

Second, the FHFA Home Price Index reports on home value changes between consecutive Fannie Mae or Freddie Mac-securitized transactions only. This might be creating an overweight of “distressed properties” in the index which, in turn, drags down valuations.

Distressed homes account for 40% of all home resales and typically sell at 20 percent discounts.

And, lastly, although the Home Price Index is a national report, real estate as a market is decidedly not national. To the contrary, it’s extremely local. As an individual, you don’t buy, sell or own homes in all 50 states. You buy them in a specific state, and a specific neighborhood ; in places like University Place.

The national data is useless to you in that respect.

We can’t discount the Home Price Index data entirely, but should remember that it paints a clearer picture of where housing has been versus where housing is going. As a home buyer or homeowner, it’s the future of home values that matters more.

Job Growth Returning To “Normal” Levels — A Bad Sign For Mortgage Rates

Job Growth (2000-2011)

Be prepared for Friday morning. Mortgage rates and home affordability could worsen quickly. At 8:30 AM ET, the Bureau of Labor Statistics releases its April Non-Farm Payrolls report and momentum has been strong.

The monthly jobs report is a market-mover and analysts expect that 196,000 new jobs were added last month. If those expectations are exceeded — by even a little — Wall Street would take it mean “economic strength” and the stock market would be boosted.

Too bad for rate shoppers, though; a move like that would also lead to higher mortgage rates throughout California. This is because, coming out of a recession, reports of economic strength tend to push mortgage rates up. We’ve seen it happen multiple times in the last 8 months.

Since losing more than 7 million jobs between 2008 and 2009, employers have added 1.3 million jobs back to the economy. And we’re learning that there’s plans for fewer job cuts in the future. It’s clear that the jobs market is improving and this is why tomorrow’s Non-Farm Payrolls report is so important.

A “weak economy” helped keep mortgage rates low for a very long time. A strengthening economy will reverse that tide.

So, consider your personal risk tolerance today, in advance of tomorrow’s Non-Farm Payrolls report. If the thought of rising mortgage rates makes you nervous, call your loan officer and lock in a rate today. Once tomorrow’s data is released, after all, the market might look changed.

How To Screen For A Good Home Contractor

Home remodeling projects are expected to top $130 blllion this quarter, their highest total since Q1 2008. A likely catalyst is that the average cost of a home improvement project is falling fast.

With the economy loosening up and contractor costs on a downswing, some in Seattle homeowners are choosing to put money back into their respective homes, and making home improvements. If you’re among them, you’ll want to make sure you’ve properly screened your contractor.

In this 4-minute piece from NBC’s The Today Show, you’ll learn tips for picking a good home contractor. The advice is mostly common sense, and worth heeding. For example:

Only select registered/licensed, and insured contractors for work in your home
Don’t automatically select the lowest bid; you may want to discard it instead
Communication skills matter. You must be able to express your wants, and have that message understood.

And lastly, if this is your first time working with a particular contractor, be sure to ask for references and follow-through on them, too. Sometimes, past customers can tell you more about a contractor than you can learn yourself.

How Real Estate Agents can Achieve Success with Twitter

Research reveals that people under the age of 40 solely utilize the Web to research information, look up local business information and connect with others. As a result, real estate agents, mortgage brokers and business owners are advertising through online media sources versus traditional print advertising. Social media marketing is a term that describes use of social networks, online communities, blogs, or any other online collaborative media for marketing, sales, public relations and customer service. So what that means is that it is the media we use to be social and connect with customers, prospects and friends. A popular form of social media is microblogging. Microblogging is posting messages that are 140 characters or less. This forces us to be more succinct and get to the point. Microblogging is like text messaging and a little bit more. The most popular microblogging site is Twitter.

Twitter recently reported that it has approximately 200 million users. Of these users, an average 140 million tweets are sent per day and an average of 460,000 new accounts are created on a daily basis. With numbers like this, it is obvious that information about a product or service can each millions of users with the click of a mouse.

Using Twitter is a great way for businesses to directly communicate with their prospects and clients. Additionally, clients can pose questions or easily find out information from the business. Twitter can be used as a low cost marketing tool for communicating business related information, to attain new clients and generate more revenue.

Real estate agents, mortgage brokers and business professionals can harness the power of Twitter by finding prospects and communicating with clients. However, utilizing Twitter to its full capabilities is more than just creating an account and acquiring followers. Real estate agents need to consistently post relevant, useful and timely messages to their Twitter account. Topics can include newly acquired listings, recently sold listings, property price changes, community and neighborhood news, tips on the best neighborhoods to live in and links to information on their website.

The use of social media to connect with prospects and clients is giving businesses a competitive edge. Those who shy away from such technology will leave the door open for their competition to step in and take over. Social media is here and it does not seem to be slowing down anytime soon. Now is the time to jump on board this new technology train and see how far it will take you.

Geopolitics Have Mortgage Rates Poised To Change

Geopolitics make mortgage rates move Among the most challenging aspects of shopping for a mortgage is how rates change constantly. It’s hard to pin them down.

For example, in 2011, mortgage rates have expired every 3-and-a-half hours, on average. That’s fast.

There’s two main catalysts for changing mortgage rates.

The first can be grouped as ”scheduled events”; the planned release of market data which includes the Existing Home Sales report, or a scheduled government statement such as when the Federal Open Market Committee meets. When the outcomes of these event-types either exceed, or fall short, of Wall Street’s expectations, mortgage markets react.

Home buyers and rate shoppers in Sacramento realize this as higher (or lower) mortgage rates.

Then there’s the other type of catalyst — the “unscheduled event”.

Unscheduled events take many forms and are often called “surprise developments”. The Federal Reserve’s plan to inject $750 billion into mortgage markets in 2009 was one such surprise. Most geopolitical events fall into this category, too.

Unscheduled events are often unsettling to Wall Street because investors don’t have specific contingency plans for them like they would if, say, this month’s jobs report comes back exceedingly strong. For example, investors didn’t expect North Korea to fire missiles over Japan in 2008, nor did they expect a volcano to erupt in Iceland last spring.

When unscheduled, unexpected events occur, the market’s first — and natural — reaction is to scramble to make sense of it. Mortgage rates get jostled as a result and can take days to settle back to normal.

We’re experiencing an “unexpected event” right now.

In response to Sunday’s evening’s presidential address, markets are now upended. The dollar is strengthening, oil prices are falling, and stock markets are rising. Each of these items are altering mortgage rates across California.

Even today, markets remain unsettled.

Therefore, if you’re shopping for a mortgage rate, keep one eye on the news and the other on the rate-lock trigger. During periods of unexpected activity, mortgage rates can change quickly so be ready to shop, and be ready to lock.

Mortgage markets wait for no one.

Wash Your Windows The Eco-Friendly Way

Clean windows the eco-friendly way

Your home’s windows look best when they’re clean on both the inside and the outside. It’s a quarterly housekeeping chore, at minimum, and should coincide with seasonal changes.

But washing windows can be a drag on the environment. Most homeowners use multiple rolls of paper towels to finish the job, and many commercial window cleaners are chemical-loaded.

Fortunately, there’s a way to wash your windows, be environmentally conscious, and still get great results. Here’s how to do it.

First, wait for a cloudy day. Cloudy days are best for cleaning windows because sunny days create more streaking; the sun can dry the windows before you’ve had a chance to polish them.

Next, make your cleaning solution.

If this is your first time cleaning your home’s windows, in a spray bottle, mix 8 parts water with 1 part each of white vinegar and environmentally-friendly dish detergent. The dish detergent is a necessary additive because it removes waxy buildups from prior washings with commercial cleaners.

Then, for washings beyond the initial cleaning, in the spray bottle, mix 1/2 teaspoon of vinegar for each cup of water instead.

Next, using reusable microfiber cloths, wash one side of the window with horizontal strokes, and the other with vertical strokes. This way, if there’s a streak, you’ll know on which side of the window it is.

Lastly, rinse your cloths often in cold water and be sure to wash top-down.

When you’re finished, your windows will be clean, and you’ll have made a near-zero environmental impact. And remember — you don’t have to wash your windows all at one. You can spread it out over time if that’s easier.

How Real Estate Agents and Mortgage Brokers are Getting Results with Social Media

With the rise in social media technology, real estate agents, mortgage brokers, financial planners and insurance agents are discovering how social media can help them generate new business. These professionals have found success in lead generation and sales through the use of social media platforms such as Twitter and Facebook. With the drop the home sales, agents are heading online and finding new ways to communicate with their customers. Additionally, social media provides a way for businesses to connect with their customers and prospects in ways that are faster and wider spread than traditional forms of marketing

Social media is growing at an enormous rate and there does not seem to be an end in sight. This growth is resulting in a shift in client communications which must be covered in order to stay relevant in the current marketplace. However, staying connected with clients and keeping abreast of the ever growing social media market is time consuming. Many real estate agents and business owners do not use social media and Internet marketing to its full potential because it is too time consuming. Thus, they are missing out on a large percentage of their prospects.

Social media has a number of factors that make it different than traditional media such as newspapers, television, books, and radio. Social media allows the user the ability to interact and communicate by leaving comments and participating in discussions. Additionally, if real estate agents can influence a group of followers, they can actually create a market position based on social acceptance. Social media provides a complementary extension to traditional marketing efforts. The one important difference between social media and traditional marketing is that with social media you can listen to it, measure it and track it over time. All in all, social media can attract new customers, strengthen existing customer relationships, reinforce brands and enhance loyalty. Social media has changed the way goods and services are taken to market.

In this rapidly changing world, it seems like technology is taking over the marketplace, and real estate agents and mortgage brokers who don’t communicate with their clients effectively will get snatched up by someone else who will. Social media and Internet marketing allows communication between clients and their customers in order to maintain their positive and professional image while building trust and credibility. To be successful in today’s economy, it is absolutely essential that you have a strong online presence that paints you as the true professional you are.

Foreclosures And Short Sales Distorting “Home Price Trackers”

Job Growth Returning To “Normal” Levels — A Bad Sign For Mortgage Rates

How To Screen For A Good Home Contractor

Geopolitics Have Mortgage Rates Poised To Change

Wash Your Windows The Eco-Friendly Way

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