Ohop Lake Real Estate, Mortgage, and the Economy

Ohop Lake Real Estate, Mortgage and the Economy - www.ohoplakerealestate.com

Interest Rates Move To Best Levels Over The Last Year: The last time we saw mortgage bond pricing as favorable as this week was June 2013. That was right after the big QE taper announcement. A good summary for the factors affecting rates is below in the next section. Interest rate directions are very favorable right now. The main factor we can see that will spoil the party is if inflation shows a solid trend higher as we approach the Fed’s 2% target.

Industry News It's been said that every cloud has a silver lining. And while some key reports from last week could mean stormy skies ahead for our economy, the "silver lining" from the worse than expected news was that it helped home loan rates improve. Read on for key details. Perhaps the biggest "cloud" for our economy last week came with the second reading on Gross Domestic Product (GDP) for the first quarter, which came in at -1.0 percent after the initial read of 0.1 percent. This is the first negative reading for GDP since the first quarter of 2011. GDP is the broadest measure of economic activity, and it will be important to see if the number improves as we head further into 2014.  In housing news, research firm CoreLogic reported that there were 46,000 completed foreclosures in April, down 18 percent from April 2013. Before the housing market decline in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. In addition, the Case Shiller 20-city Home Price Index grew at an annual rate of 12.4 percent in March. Overall, the report showed that housing prices are rising at more normal levels after the big gains seen in 2013.  Also of note, signs of inflation are starting to creep into our economy. Core Personal Consumption Expenditures (the Fed's favorite read on inflation) rose to 1.4 percent in April, after a 1.1 percent rise in March and a 0.9 percent gain in February. April's reading is the highest 12-month rate since March 2013. What does this mean for home loan rates? Remember that home loan rates are tied to Mortgage Bonds, so as Bonds improve, rates improve. Mortgage Bonds have improved lately for many reasons, including our tepid economy, the weakened Euro and the Fed's big Bond-buying program. In addition, the uncertainty with Russia and the Ukraine has caused investors to move their money out of Stocks and into less risky assets like Bonds. But rising inflation is something to keep an eye on. Inflation is the arch enemy of Bonds, as inflation reduces the value of fixed investments like Bonds. If inflation continues to heat up, Bonds could worsen, which would impact the improvement we've seen in home loan rates. The bottom line is that home loan rates remain attractive compared to historical levels, and 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.

 Real Estate Miscellaneous Stats

 

New FHFA Chief Rebuffs Shrinking Role for Fannie and Freddy.   Newly installed Chairman of the FHFA, Mel Watt, pushes back against moves to dissolve Fannie and Freddy or to lessen their role in the US Housing market. It has been the mistaken belief of many that Fannie and Freddy were the main cause of the financial melt down of 2007. I believe this opinion is held by those who do not understand the history and details of what was occurring in the mortgage industry. They were certainly participants but much of their falter was due to lack of oversight by those responsible to make sure they did not abuse their government guarantees, THE US CONGRESS. Instead of an intelligent analysis of the real problems, politicians choose to divert attention by manufacturing a villain and propose that they save us with some wonderful action. So both Democrats and Republicans found their villains that they could target and thus be our heroes. One misguided proposal has been to dissolve Fannie and Freddy. Mr. Watt sees no reason to lessen the role of the GSE’s. With proper oversight there is nothing in Fannie and Freddy’s 80 year history that suggests they cannot continue to be an important part one of the biggest sectors of our economy. It does not hurt that they have repaid their bailout funds and are now a source of revenue for the government. Increased government fees built in to their pricing has made it easier for private mortgage products to compete. Mr. Watt is dramatically changing the language of the former chairman with statements this last week. "I don't think it's FHFA's role to contract the footprint of Fannie and Freddie," Mr. Watt said during a discussion at the Brookings Institution in Washington. Winding down the companies without clear proof that private investors are willing to step back in "would be irresponsible."     Finally a voice of reason is speaking to realty. 

Lack of First Time Buyer’s Holds Back A Strong Housing Recovery:   Economists and analysts continue to ask why housing is not leading us in to a stronger recovery with so much support from the Fed and time since the turn down. Even Fed Chairperson, Yellen, has made note that housing is not recovering as strong as hoped and they have really spent all their bullets. A recent Wall Street Journal article points out that first time buyers are purchasing at 88% of the average level over the last 10 years. There are many head winds facing first time buyers in the current environment. Recent data points out that income fell most for the age group of 25-34 from 2007 to 2012. Recent appreciation has made homes less affordable, many have credit issues to resolve, inventory is tight in most markets, many have high student loan debt and much tighter credit requirements are all factors. First time buyers are currently 16% of all transactions while they were 22-25% during the 2001 to 2007 period. The good news is we seem to be at the bottom and heading up. NAR chief economist, Lawrence Yun, suggests the market is improving but it may take a few years to get back to normal.

Most Affordable Areas Still Seeing Strong Appreciation: Most markets in the US are seeing slower appreciation rates in 2014 versus the robust averages in 2013. That is true for King and Snohomish Counties but not for some areas. The main metropolitan areas are becoming unaffordable for median income earning households. This is creating the typical move out. Those markets hit most hard are now seeing strong rebounds in housing values while others wane. King county average appreciation rates of 15% in 2013 have slowed to 11% so far this year but, some areas are at 20%. Shoreline, Maple Valley, Federal Way and Burien are some of these rapidly appreciating markets. Not all suburbs had strong growth. Kent, Renton/Benson Hill, Skyway and Enumclaw slowed below 5% appreciation. King County, overall, seems to have strong momentum. 17 out of 30 areas had stronger appreciation rates than the same period last year. Snohomish County measurables were weaker but that is blamed on lack of inventory and sales. The lower priced markets are appreciating at an average rate of 18% but are still below market peaks of years ago. Kent and Burien are still 30% below their peak levels. Not all high end areas are slowing. Redmond, Kirkland and Newcastle are still appreciating at 13-18% per year. A number of these markets have surpassed their housing boom peak prices. These include Central Seattle, Eastlake, Queen Anne and Redmond. Many are poised to surpass their peak values such as Green Lake and Ballard. Zillow chief economist, Stan Humphries, points out that appreciation rates can be skewed by the mix of low or high prices homes in current period sales. Still he says appreciation rates are low double digits in King County. He points out that affordability is not yet at boom levels but that is largely due to low interest rates. At the end of last year 38% of Seattle homes were affordable for median income earning households. It was 75% in Federal Way. The more central zip codes were even less affordable in the main metro job centers; just 3% in Seattle’s 98117 and 18% in Bellevue’s 98005. In order for area affordability to reach the peaks in 2006 interest rates would have to rise to 8%. This appears to be a long way off currently.

Ohop Lake Real Estate, Mortgage and the Economy - www.ohoplakerealestate.com

Ohop Lake Real Estate, Eatonville Lakes Area - Now is a great time to invest in a rental. www.ohoplakerealestate.com

Ohop LakeReal Estate and Eatonville Lakes Area Mortgage, and the Economy.  www.ohoplakerealestate.com

Now is a great time to invest in a rental

Low home prices and low interest rates make this a great time to become an investor. These 5 tips will help you get started.

What's more, the real-estate market is starting to recover: U.S. houses lost $489 billion in value during the first 11 months of 2009, but that was significantly lower than the $3.6 trillion lost during 2008, according to real-estate website Zillow.com.If you're thinking about investing in a rental property, experts say low home prices combined with low interest rates make this the best time in years to become a real-estate investor.

"We haven't seen home prices this low in so many years, coupled with the rates being so low," says Jill Sjolin, an agent with Windermere Real Estate in Woodinville, Wash., who specializes in investment properties. "When the money is cheap to borrow and the houses are cheap to buy, it's absolutely the best time to invest."

While the timing may be right, these five tips can help first-time investors take advantage of what might be the opportunity of a lifetime.

Know your options. Since not all investment properties are the same, it's important to determine what type of property fits your strategy, says Harrison Merrill, chief executive officer of Merrill Trust Group, a real-estate investment company based in Atlanta. Do you want to become a landlord, or would you rather restore and resell properties? Are you interested in apartment buildings and other commercial real estate, or in buying land that can be developed? First-time real-estate investors may want to start with residential housing, since commercial real estate and land development still face challenging market conditions, Merrill says.

• Find rental properties in your area

Partner with experience. First-time investors should find a real-estate agent experienced in investment property deals who can help you locate promising properties. "Look for relational brokers who expect to do business with you again and therefore are going to be much more careful with what they recommend," Merrill says. A second option is to collaborate with a more experienced real-estate investor and close a deal together. In this economy, an experienced real-estate investor may be willing to work with you in exchange for the capital you can provide, giving you the opportunity to glean investment knowledge and experience firsthand, Merrill says.

Even if you don't collaborate with other real-estate investors, talk to them about pitfalls they've experienced. "Go down to the general district court in your area and listen to some landlord/tenant cases so you can get a sense of what kind of challenges landlords face," says Jeffrey Taylor, author of "The Landlord's Kit."

Look for the right location. If you buy a property with hopes of renting it out, location is key. Homes in high-rent or highly populated areas are ideal; stay away from rural areas where there are fewer people and a small pool of potential renters, Sjolin suggests. Also, look for homes with multiple bedrooms and bathrooms in neighborhoods that have a low crime rate. "Renters gravitate to a safe neighborhood, and if they have kids, they will want a good school district," Sjolin says. Also think about potential selling points for your property. If it's near public transportation, shopping malls or other amenities, it will attract renters, as well as potential buyers if you decide to sell later. The more you have to offer, the more likely you are to please potential renters, Sjolin says.

Have capital lined up. Speak to potential lenders or even a financial planner about whether you have enough assets to handle the ups and downs that could come with investing. Even if you plan to rent out the property, count on paying the mortgage whenever there's a vacancy. "If you can have about six months of mortgage payments saved up, it's there if you need it, and you can use that money for repairs," Sjolin says. Even if you're planning to fix up a home and sell it, you may end up holding onto it for several months in the current market, Sjolin adds.

Build a supporting cast. Don't wait until a rental property needs repairs to find someone to handle them. "Line up maintenance individuals who can take care of the different challenges that occur so you can simply call the person when a particular issue comes up," Taylor says. Other sources you may want to have relationships with are an attorney to consult with on tenant issues, a property management firm to handle the day-to-day rental affairs and an accountant to help you understand the tax ramifications of investing. The more support you have, the better you will be able to handle the problems that come your way.

Whatever you do, understand that buying investment property is an entirely different experience than buying your primary residence. "When you go to buy your own home, you usually have emotions in it," Sjolin says. "When you go to buy an investment property, you need to put all that aside and ask, 'What makes sense?'"

This article has been brought to you by: By Tamara E. Holmes of Bankrate.com

Ohop Lake Real Estate and Eatonville Lakes Area Mortgage, and the Economy.  www.ohoplakerealestate.com

Ohop Lake Real Estate - The Graying of America. www.ohoplakerealestate.com

Ohop Lake Real Estate, Mortgage and the Economy.  www.ohoplakerealestate.com

The graying of America has hit home — in its kitchen cabinets, bathroom counters and bedroom walls.

The white-on-white look has had a lock on home interiors in recent years but is becoming passe, tastemakers have decreed.

In its place, various shades of gray are gaining ground, or so some authorities contend. Others are pushing a different kind of neutral, more beige or brown, while still others are going for pastels or something even brighter.

Choosing the colors we live with is more than a question to ponder while standing in front of a rack of paint chips. It's big business.

White's fading domination has left color experts wrestling over the next hot hue — a subject that fuels an entire industry of color prediction and consultation.

"You would never buy meat that is the wrong color," said interior designer and color stylist Mark Woodman, immediate past president of the Color Marketing Group, an influential color-forecasting organization based in Alexandria, Va. "Up to 85% of the consumer decision is based on color."Builders, designers and manufacturers need to know where home color preferences are headed so they can plan products that won't hit the market for months. And unlike a fast-fashion sweater that gets discarded after a season or two, these home-based shades tend to hang around for a very long time.

To come up with 60 hues for a worldwide palette last year, select members of the nonprofit trade organization discussed 3,000 colors, he said. "It's an endless internal research project by forecasters who are fascinated by color and want to make good business decisions."

Color specialists weigh factors beyond beauty such as the state of the economy, the psychology of the times and the tenor of youthful rebellion.

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"There is a lot of effort, time and money spent on creating new colors," said David Bromstad, who hosts HGTV's "Color Splash."

The interior designer is a creative consultant for DuPont's Corian and Zodiaq brands, helping select colors for kitchen and bathroom countertops that buyers live with for years.

"I am all about using trending colors in your space, but I would keep the cabinets and countertops classic," Bromstad said. "Having a neutral color palette with pops of color throughout, using pillows or throws, is a safer way to go."

Debra Mednick, home industry analyst for market research company NPD Group, said color prognosticators for residential products "have to go pretty conservative to have a wide appeal."

After all, no one wants to relive the avocado refrigerator horrors of an earlier era.

This 1937 home in Los Feliz was redone in gray tones by L.A. designer Joshua Cain of Saxony Design Build. (Val Riolo)

The wild cards in the color equation are the millennials, Mednick said. The notion "it's not your mother's" appeals to this group, which may opt for choices outside the mainstream.

"Color is tricky," she said, "because you have to find the right one."

In kitchen appliances, for example, white has been a bestseller, but it is often associated with lower-end quality and discounted prices. Metallics that cost more have more cachet.

Gray got the vote as the most popular color choice in kitchens and bathrooms this year, according to a trends report from the National Kitchen & Bath Assn.

A recent bulletin to members from the Color Marketing Group highlighted a warm gray "caressed by chocolate" that the organization dubbed "Maybe."

In the parlance of pigment, "'Maybe' is not a wishy-washy neutral. It takes its strength from a world that is pondering its next steps," the group's Color Alert noted, showing the tone in use as a car finish and a stool seat, among other things.

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When home building and design industry representatives gathered in Las Vegas a few months ago, gray tones were prominent in cabinetry and counter displays throughout the 650,000 square feet of exhibit space. Appliances also got the gray treatment, but surfaces went beyond stainless to include metallic shades such as dark platinum.

The 1,700 exhibits at Design & Construction Week 2014 also showed colors that pulled brown or beige, such as the wood stains in the Pumice line offered by cabinetmaker Dynasty by Omega.

"The colors combine gray and beige," said Maria Stapperfenne, president-elect of NKBA, a trade group. "I like to call it greige."

Based on historical trends, the manager at Tewksbury Kitchens & Baths in Whitehouse Station, N.J., has a theory on why this subdued palette is in vogue.

"Gray is popular when we feel secure, things are moving fast and we feel good about our futures," Stapperfenne said. "People are looking ahead."

Sherwin-Williams has gone so far as to call gray "the new black" in its color campaign — plus a lot of other names.

Its 2014 paint shades include Agreeable Gray, Earl Grey, Peppercorn, Gauntlet Gray and classic French Gray. Its color of the year, Exclusive Plum, looks like violet with at least two grandparents from the gray family.

But not all color connoisseurs are buying into gray.

The most popular kitchen colors displayed on Houzz, a Palo Alto-based website that helps homeowners share ideas and connect with design professionals, are white, beige and neutral.

In bathrooms, according to a Houzz Bathroom Trends Study, white cabinets are in the forefront.

The New American Home, outfitted in nearby Henderson, Nev., in conjunction with the show, was decorated in beiges and browns in line with the "new neutrals" being touted this year.

The design industry experts at Pantone, which calls itself "the world-renowned authority on color," went out on a stalk naming the pinkish purple Radiant Orchid its 2014 color of the year. While that may apply to clothing and lipstick, reds and aquas were more common accent colors on the floor of the Las Vegas Convention Center.

Another color authority breaking out of the gray box is Benjamin Moore & Co.

"At the end of last year, we saw furnishings and beddings tipping toward pastels," said creative director Ellen O'Neill. So the paint company created a palette of 23 new colors for this year in collaboration with bathroom fixture maker Kohler.

Among the new hues are Peach Parfait, Fruit Shake, Lavender Mist, Caribbean Teal and Iced Mauve.

It's a subtle shift.

"People are insecure about being accused of having bad taste," O'Neill said. "But they wanted color back."

That sentiment may explain the name of the sky-blue shade that Benjamin Moore selected as its color of the year: Breath of Fresh Air.

Ohop Lake Real Estate, Mortgage and the Economy.  www.ohoplakerealestate.com