Housing Market Forecast

Improvements in Housing

A regular steady stream of information continues to point to the strengthening housing market.  The stock market has responded better than Main Street.

Though the analysis by Lawrence Yun, PHD, Chief Economist and Senior Vice President of NAR breaks down all the signs of improvement(which are many), he fails to note what a Realtor with his feet on the ground knows:

                   The numbers would be better if buyers and sellers

                     knew these numbers and believed the numbers

I have found that some buyers have really got the message as have some sellers.  Yet, there remains a slew of people that still believe 

that housing will collapse again, no loans can be had and only the fool hardy are buying.

Actually, as Dr. Yun's report notes when you read between the lines, the wise are jumping in the early phase of housing's recovery(over 2 years in).

Don't you agree???

Pass this post to all your friends that you know should be out buying a home!  

Housing Market Forecast

Housing Again Leading Economy

Housing Takes the Lead!!

With the Spring season of Home Sales happening, it may not be a historically unheard of statement:  Housing is the strongest economic engine in the past quarter.  

Yet it has been a few quarters since anyone trumpeted this statement for almost any quarter. I know, between my own observations and data from other sources, that I have been sharing the overall strength in the housing sector.

Yes, not every one has yet to see the double digit annual increase seen in Florida, California and Nevada(which is slowing by the way).  Still, increasing values have been the rule to the land for the past 12-24 months in most corners of the country.

In Jim Belote's MMG Weekly, the strength of the Housing sector is compared to the weakness in consumer spending in the 1st quarter. With home sales up and the GDP down, it easy to see why housing lead the economy.

As I always wonder: How come there is so much hand wringing over the sales?  With the winter weather we had January - March, retail sales, car sales and home sales were impacted. Every time

we have tough weather, be it snow in the NE or a hurricane in the Gulf, sales are tough in that region.  Buying just doesn't interest someone who see a foundation where a his or her home stood.

Loss sales can not ever be made up!!!  Been know for years. I know this is why the media outlets and such get "talking heads" complaining about the bad weather impact on sales.  But who can dictate the weather???   

We simply have to deal with the consequences!!!   

As so aptly stated below, with the improved weather(don't ask the Upper Midwest and Plains if weather improved), retail sales and car sales should rebound.

And yes, home sales should increase also!  The low mortgage rates seem to be hanging around and can only make buyer and seller motivated to move.  

No time like the present!!!   No one wants to be caught in the "would have/should have" dilemma.

Read, comment, reply!!!

Provided to you Exclusively by Jim Belote   For the week of Jun 30, 2014 | Vol. 12, Issue 26

Jim Belote Branch Manager, MBA Union Mortgage Group Phone: (757) 395-LOAN Fax: (757) 351-6471 E-Mail: jim@jimbelote.com 582 Lynnhaven Parkway, Suite 300 Virginia Beach, VA 23452

In This Issue...

Last Week in Review: Housing continues to be a bright spot, while first quarter Gross Domestic Product showed worrisome numbers for our economy. Forecast for the Week: The markets are closed Friday for Independence Day, but not before the June Jobs Report and other key reports are released. View: Conquer home office clutter with these tips for going paperless.

Last Week in Review

"Help! I need somebody." The Beatles. While the Fed has been working hard to help our economy shake off the recent recession, some key reports continue to disappoint. After six years and over $4 trillion of stimulus geared toward promoting economic growth, the final reading for 2014 first quarter Gross Domestic Product (GDP) came in at an anemic -2.9 percent. This was worse than expected and the worst reading since the first quarter of 2009, the height of the recession. The report showed that consumer spending fell to 1 percent from 3 percent, which is a big concern as consumer spending is a main driver of our economy. Harsh winter weather early in the year was a key factor in the contraction. GDP is considered the broadest measure of economic activity, so it will be especially important to see if the second quarter data (from months with better weather) shows signs of improvement when it is released at the end of July. Housing continues to be a bright spot as New Home Sales for May surged by 18.6 percent to an annual rate of 504,000, well above expectations. Existing Home Sales for May were also up 4.9 percent from April, reaching their highest monthly rate since August 2011. Meanwhile, the Case-Shiller 20-city Home Price Index rose 10.8 percent in the year ended in April. However, from March to April, the 20-city Index gained just 0.2 percent. A spokesman for Case-Shiller said that overall prices are rising month-to-month, but at a slower rate. What does this mean for home loan rates? The weak GDP report, tame inflation news and a decline in Stocks boosted Mortgage Bonds last week. Since home loan rates are tied to Mortgage Bonds, home loan rates reached some of their best levels this year. The takeaway is that now remains a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

The holiday-shortened week isn't short on economic data, and culminates with Thursday's Jobs Report for June. Manufacturing data kicks off the week on Monday with Chicago PMI, followed by the ISM Index on Tuesday. Also on Monday, look for housing data with Pending Home Sales for May. Thursday brings Weekly Initial Jobless Claims, ISM Services Index and the June Jobs Report, which includes Non-farm Payrolls and theUnemployment Rate. All capital markets will be closed on Friday, July 4 in observance of Independence Day. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based. When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse. To go one step further—a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning. As you can see in the chart below, Bonds and home loan rates are at some of their best levels this year. However, the June Jobs Report could be a market mover and I'll be watching all the news closely to see what happens. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jun 27, 2014)

The Mortgage Market Guide View...

Home Office Maximizer Kicking the Paper Habit Going paperless makes sense not only for conservation's sake, but also for reducing clutter and increasing convenience. Brian Berson, CEO of FileThis, a web-based file service, says this time in history is similar to the transition we went through going from print photos to digital photos, but there are some key things to keep in mind. To begin, don't try to handle the backlog of paper you already have. Start with the paper coming your way over the next year. You can store documents on your computer, but that takes a lot of space and you can't access them from anywhere. You could try an external hard drive, but experts recommend sticking with a single service such as FileThis, Doxo or Neat. Get into a workflow with saving documents so you make the habit stick—grab the PDF manual for new office equipment or receipts for online purchases and forward them to your filing system or paperless service. Schedule time to "scan and shred"—you'll need a scanner and shredder to handle the paper you've already got, and you'll need to take a day to go through it. But once you've got that pile organized, it will be easy to manage moving forward by handling items as they come in. Capture to-do's, notes and ideas from here on out with web or smartphone based services like Evernote—whose motto is "Remember Everything"—and which make tracking ideas and resources a snap. As always, feel free to pass these tips along to your team, clients and colleagues! Economic Calendar for the Week of June 30 - July 04 Date ET Economic Report For Estimate Actual Prior Impact Mon. June 30 09:45 Chicago PMI Jun 64.7 65.5 HIGH Mon. June 30 10:00 Pending Home Sales May NA 0.4% Moderate Tue. July 01 10:00 ISM Index Jun 55.7 55.4 HIGH Wed. July 02 08:15 ADP National Employment Report Jun NA 179K HIGH Thu. July 03 08:30 Average Work Week Jun NA 34.5 HIGH Thu. July 03 08:30 Unemployment Rate Jun 6.3% 6.3% HIGH Thu. July 03 08:30 Non-farm Payrolls Jun 220K 217K HIGH Thu. July 03 10:00 ISM Services Index Jun 56.5 56.3 Moderate Thu. July 03 08:30 Jobless Claims (Initial) 6/28 NA 312K Moderate Thu. July 03 08:30 Hourly Earnings Jun NA 0.2% HIGH

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

REIN Press Release: April Home Sales

Real Estate Information Network(REIN)

Hampton Road

Real Estate Update

   As you will see the April report from REIN is consistent with     

   comments presented in previous posts:

     Home Sales are stuck in neutral in the initial months of 2014.

    The very good news is that distress homes are down and are less 

     impactful on home sales.

     Read for history but know that May's report will be much

     improved simply due to weather improvements.  Personally, I 

     have seen a direct correlation between weather and improved

     listing and sale activity.

Sales Trends in Hampton Roads

Latest Sales Update

for Hampton Roads

All Real Estate is local.  National Trends are good to track to see how the overall real estate market is trending.  Yet, each area of the country is so different.  

For example, if you heard the news story of multiple bids and homes sold for $30,000 to $100,000 over asking price, that wasn't from here in Hampton Roads.  California, Boston and Florida homes were features.  These markets dove and now the values are increasing but at times homes are priced below the going values for the area.  Thus, the a good story can be told.

The key factor measure is "Absorption Time". Absorption Time is simply the time it would take for all the homes on the market now in a given price range to sell based on the current rate of sale. 

For example, the $251,000 to $300,000 range(All Markets) has 1288 homes for sale with an 8 month absorption rate.  Thus, a home seller can assume on average, if the trend of sales continue at present rates, that his/her home will sell in 8 months or less.

In our area, the values tapered as we all know.  The values are improving.  As I have told clients, the value proposition has improved for home sellers up to $350,000 or so.   Buyers are finding too few available homes due to the low number of homes for sale in lower price range.  Thus, the values are strengthening.

As you can see, the price ranges in the Normal Seller's Market and Balanced Market(where Buyer and Seller are at equal advantage)

is globally up to $300,000 with Normal Buyer's Market present for $350,000 range. 

Yet if you compare Virginia Beach to Chesapeake to Suffolk in the City specific market data, you can see the market condition truly are local as they vary by city.   

If this was broken down by neighborhood, you would again see variances.  This is why contacting a Realtor is essential as you need to know how your neighborhood, school zone, section of town is presently performing.

If you have questions about your home and the saleability of that home or other questions, give me a call at 757 580-6546.

Otherwise, I will continue to keep you on top of the market!

Why Real Estate Sales Aren't Dead

Where Is Market Headed?

Why a question?  Haven't I said the market has been improving every month for months on end(since mid 2012)?  So why start here?

You only have to read Jim Belote's MMG Weekly update to understand.  As has been reported for the past two months, February and March followed a January that fell off the December pace.  

Though rising interest rates(Jim talks about the pressure on rates once again) had an impact, it really wasn't the big impact.

Just like retail and auto sales, it was the weather!

Yes, home sales can tank when it is more important to dig out the car for the 15th time or having to deal with house bond kids home for another day off school.  

As one Lowe's ad boldly states, the snow was a great novelty for the first couple of snowfalls but then became a pain.  And if you didn't live were there was much snow, it was bitter cold(yes, Michigan...28 degrees in bitter in Atlanta!).  And both cold and snow made buyers and sellers like you think, "I will wait until in warms a bit".  Fortunately the Lowe's ad goes on to say Spring temps are here!

As a result, you will get moving to make the move!  And so will a thousand if not hundreds of thousands other people will get the move on.  

April and May should turn the market upside down. Everybody will be wondering why the the market shoot up!!!  

I wonder. 

Provided to you Exclusively by Jim Belote   For the week of Apr 28, 2014 | Vol. 12, Issue 17

Jim Belote Branch Manager, MBA Union Mortgage Group Phone: (757) 395-LOAN Fax: (757) 351-6471 E-Mail: jim@jimbelote.com 582 Lynnhaven Parkway, Suite 300 Virginia Beach, VA 23452

In This Issue...

Last Week in Review: Housing reports were front and center, and tensions from overseas impacted the markets. Forecast for the Week: Look for key reports on housing, inflation, manufacturing and jobs. Plus, the Fed meets. View: Build stronger connections on LinkedIn with these power-user tips.

Last Week in Review

"Reality is the leading cause of stress amongst those in touch with it." Lily Tomlin. The reality of the 2014 housing market is quite different than last year's, according to recent housing reports.New Home Sales for March plunged by 14.5 percent from February to an annual rate of 384,000 units. This was far below the 455,000 expected and the lowest level since July. New Home Sales in March were down 13.3 percent from the same period last year. Existing Home Sales for March didn't fare much better, as they declined by 0.2 percent from February to an annual rate of 4.59 million, just below expectations. This was the slowest pace since July 2012. In other housing news to note, the Federal Housing Finance Agency (FHFA) reported that its February Home Price Index (HPI) rose by 6.9 percent from the same period last year. This was the weakest reading in 13 months. What does this mean for home loan rates? Typically good news helps Stocks improve at the expense of Bonds, including Mortgage Bonds (the type of Bonds on which home loan rates are based). However, Bonds and home loan rates were able to benefit last week from the increased tensions between Russia and the Ukraine. This caused investors to move their money into the safe haven of Bonds, helping Mortgage Bonds and home loan rates improve. Whether these improvements continue could be contingent on several potentially market-moving items in the coming week, including the Jobs Report for April and the Fed's next meeting of the Federal Open Market Committee. Remember that the Fed is now purchasing $30 billion in Treasuries and $25 billion in Mortgage Bonds to help stimulate the economy and housing market. This is down from the original $85 billion per month that the Fed had been purchasing. It will be important to see if the Fed announces additional tapering of these purchases at its upcoming meeting. The bottom line is that now remains a great time to consider a home purchase or refinance, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

This week's economic reports will touch on a large sector of the economy, with several key reports to note. Economic data kicks off on Monday with Pending Home Sales for March, followed by the S&P Case-Shiller Home Price Index for February on Tuesday. Tuesday also features Consumer Confidence for April. In the manufacturing sector, look for Chicago PMI on Wednesday and the ISM Index on Thursday. Also on Wednesday, the first reading of Gross Domestic Product for the first quarter of 2014 will be released. Thursday brings Personal Income, Personal Spending and Personal Consumption Expenditures, the Fed's favorite measure of inflation. Weekly Initial Jobless Claims will also be delivered as usual. That leads us to Friday when one of the most closely-watched economic reports will be released—the Jobs Report for April, which features Non-farm Payrolls and the Unemployment Rate. In addition, the Fed's next regularly-scheduled meeting of the Federal Open Market Committee begins on Tuesday, with the Policy Statement being delivered Wednesday. It will be important to see if the Fed announces additional tapering to its Bond buying program—and how Bonds and home loan rates react. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based. When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse. To go one step further—a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning. As you can see in the chart below, Bonds and home loan rates rebounded late last week. With a potentially volatile week ahead, I'll be watching the markets closely. Chart: Fannie Mae 4.0% Mortgage Bond (Friday Apr 25, 2014)

The Mortgage Market Guide View...

Power-user Tips for LinkedIn Chances are you know how powerful LinkedIn can be for networking, but like most everything in business there are secrets power-users know to help them stand out from the crowd. Keep these tips in mind as you use LinkedIn to start building stronger connections, even faster. Be specific! When you ask someone to connect, change the default message, which reads: "I'd like to add you to my professional network on LinkedIn." Instead, personalize your invitation to say something more inviting, or succinctly explain how you know the person or why you want to connect. It's not personal, it's business. Because LinkedIn is a social media platform for professionals, keep your activity strictly business. If you get into heated discussions frequently, create controversial posts, or act overly casual in your comments, just remember that potential employers or customers could notice. Give a little bit. The greatest networking principle is to always give first. Endorsing your connections is a quick and easy way to do just that. Not only will endorsing give your connections well-deserved virtual kudos, but it can also help them rank higher in search results—having you to thank for helping them score their next big deal or reach more people! Timing is everything. Asking a favor immediately after making a connection is as much a faux pas in the virtual world as the real one. Make connections (and then nurture them) well before you need something from them. Be sincere. Write only genuine recommendations, and write without expecting anything in return. If your connection returns the favor, good for you! Click here for even more LinkedIn power-user tips and, as always, please feel free to pass these tips along to your team, clients and colleagues. Economic Calendar for the Week of April 28 - May 02 Date ET Economic Report For Estimate Actual Prior Impact Mon. April 28 10:00 Pending Home Sales Mar NA -0.8% Moderate Tue. April 29 09:00 S&P/Case-Shiller Home Price Index Feb NA 13.2% Moderate Tue. April 29 10:30 Consumer Confidence Apr 83.0 82.3 Moderate Wed. April 30 02:00 FOMC Meeting Apr NA 0.25% HIGH Wed. April 30 09:45 Chicago PMI Apr 55.4 55.9 HIGH Wed. April 30 08:30 Employment Cost Index (ECI) Q1 NA 0.5% HIGH Wed. April 30 08:30 GDP Chain Deflator Q1 NA 1.6% HIGH Wed. April 30 08:30 Gross Domestic Product (GDP) Q1 NA 2.6% HIGH Wed. April 30 08:15 ADP National Employment Report Apr NA 191K HIGH Thu. May 01 10:00 ISM Index Apr 54.3 53.7 HIGH Thu. May 01 08:30 Personal Consumption Expenditures and Core PCE YOY NA 1.1% HIGH Thu. May 01 08:30 Personal Consumption Expenditures and Core PCE Mar NA 0.1% HIGH Thu. May 01 08:30 Personal Spending Mar 0.6% 0.3% Moderate Thu. May 01 08:30 Personal Income Mar 0.5% 0.3%