Interest rate rose a bit last week mostly as a result of an announcement by the U.S. Treasury that it would auction off $162 Billion worth of bonds this coming week. This is an enormous amount of bonds, and rates had to go up in order to attract investors in these bonds. The government has to issue all of this debt (and much more) to help pay for the huge stimulus programs. Other economic news released last week was favorable for mortgage rates, but it wasn't good enough to overcome the Treasury's announcement.
Last weeks news:
New housing starts fell to 458,000 in April, down from 525,000 in March, and well below expectations of 527,000. Also during April, permits for new homes came in at 494,000, down from 511,000 in March, and also well below the 530,000 that were expected. Although on the surface this looks like bad news, the fact that less houses are being built means that the excess inventory is being used up and this bodes well for the future of both the new home and resale markets. On Wednesday, the minutes from the Federal Reserve Open Markets Committee's most recent meeting were released, and the markets learned that the Fed is considering buying more mortgage backed securities. This caused a small rally in mortgage bonds, until the markets realized that the Fed still has a long way to go in its original plan to purchase $1.25 Trillion in mortgage backed securities, which will probably carry us through the balance of this year. The Fed also revised it's forecast for the U.S. Gross Domestic Product downward and it's forecast for unemployment upward. This was timely, since Thursday brought news that first time unemployment claims increased by 631,000 the week before, down from 643,000 the week before that, and lower than expectations of 640,000. Although any decrease is good, 631,000 is still a huge number, and continuing claims (those people going more than one week) is running at 6.7 Million - a huge number of people out of work. Also on Thursday, the Index of Leading Economic Indicators showed an increase of 1%, much better than March's decrease of 0.3% and anticipations of a 0.6% increase. The Philadelphia Fed's index showed an unexpected decrease of -22.6. Even though it was better than March's -24, it was still worse than expected.
This week's news:
The market will have a fair amount of news to digest this week, and one less day to do so, with the markets closed on Monday for Memorial Day.
This week brings:
Tuesday - Consumer Confidence
Wednesday - Existing Home Sales are expected to show an increase to 4.63 Million, from 4.57 Million in March
Wednesday - Crude oil inventories will be watched in hopes that an increase in supply will help stem the recent rise in crude oil and gasoline prices
Thursday - Weekly first time unemployment claims are usually one of the most important news releases of the week
Thursday - New Home Sales figures are expected to have remained steady from March to April Thursday - Durable Goods Orders are anticipated to increase from a reading of -0.8% in March Friday - Gross Domestic Product - the first of three revisions to the first quarter GDP number is expected to show a rise from -6.1% to -5.5%
Friday - The Chicago Purchasing Managers Index for May is expected to come in at a reading of 42, up from 40.1. Any number below 50 is considered bad for the economy.
Friday - Consumer Sentiment for May should show a slight increase from last month.
The markets will have a lot of economic news to get through this month. In addition, the markets will really be watching how the Treasuries bond auctions go. Good treasury auction results coupled with some bond friendly economic news could bring a retreat in mortgage rates back to where they started last week. I will keep you posted with any big movements one way or the other!
By the way, if you are looking to sell your home I have put together a set of strategies and specific tips that can help you sell your home in this market and avoid all the pains of doing this yourself. If you are still contemplating selling your property, even in this market, then download my Free Report now, “7 Selling Mistakes You DON”T want to make or YOU Won’t Get Top Dollar In A Down Market”
Tuesday, May 26, 2009
Tuesday, May 19, 2009
Sell Your Chicago Property in Any Neighborhood? 5 Must Dos To Survive And Sell!
If you have been trying to sell your property, no one need tell you what it means when the media says, “This is a buyer’s market”. A buyer’s market is to real estate as a bear market is to stocks. Even when prices are so low that it just makes sense to buy, there are no buyers to be found! No matter how bleak things may be, however, there are still plenty of people that have excellent credit and real money saved for a down payment. The question is, then, how does a seller FIND these buyers?
1. Tic-Tac-Toe or “Thermonuclear War” I will probably upset you with what I have to say next. My very best advice to you as a seller in this market is: if you do not have to sell, stay out of the market! Some games are only won by not playing them at all! This is not the time to “dip your toe into the water” just to see what your property will bring. If you are not prepared for the brutal beating you will take from buyers, then STAY AWAY!
2. Price is King What you owe on the home, what you feel you must get, what you think is FAIR – none of these factors come into play in the mind of the buyer. If you must sell your home in this market, the #1 determining factor is the price. “Fair market value” is what defined as what a ready, willing and able buyer is prepared to pay for you home today. In a market where prices are falling, this means you must actually price your property BELOW recent sales – that is, BELOW ascertainable “fair market value”. Reducing the price later as prices fall will not get your property sold because you are STILL priced above market!
3. When In Doubt, Price It Even Lower This is not a market to “speculate”. Of course you want to get as much as you can for the property. No one wants to feel as if they have left money on the table. It is counter-intuitive, but the BEST way to get the most money for your property is to ask LESS, not more! The reason is that if you have priced the property too low, buyers will recognize that and bid the price up. Even in THIS market!
4.You Have A Narrow Window To Maximize Your Dollars Your best chance to get the most money for your property is when it first hits the market. The reason is that your BEST buyers are the ones that are already in the market, have already done their homework and are just waiting for the right deal. Once you lose that pool of buyers, they are gone – forever!
5. You Have One Chance To Make A Good Impression Yes, staging your home is important - without question. But please notice that this is the LAST item on the list. Yes, buyers will pay a premium for a property that is in move-in condition. However, buyers determine a RANGE they are willing to pay based on condition and they do not generally exceed that range. The primary purpose of staging your property is to compete favorably compared to the other properties they are looking at in their price RANGE.
So clean up, tidy up, de-clutter, throw away or pack away those things you don’t use on a daily basis. However, do NOT spend money on making big capital improvements. You may want to do some paint touch ups or replace unsalvageable carpeting or tile. But leave the new appliances or central a/c for the next owner to install.
If you are looking to sell your home I have put together a set of strategies and specific tips that can help you sell your home in this market and avoid all the pains of doing this yourself. If you are still contemplating selling your property, even in this market, then download my FREE report now, “7 Selling Mistakes You DON”T want to make or YOU Won’t Get Top Dollar In A Down Market”
1. Tic-Tac-Toe or “Thermonuclear War” I will probably upset you with what I have to say next. My very best advice to you as a seller in this market is: if you do not have to sell, stay out of the market! Some games are only won by not playing them at all! This is not the time to “dip your toe into the water” just to see what your property will bring. If you are not prepared for the brutal beating you will take from buyers, then STAY AWAY!
2. Price is King What you owe on the home, what you feel you must get, what you think is FAIR – none of these factors come into play in the mind of the buyer. If you must sell your home in this market, the #1 determining factor is the price. “Fair market value” is what defined as what a ready, willing and able buyer is prepared to pay for you home today. In a market where prices are falling, this means you must actually price your property BELOW recent sales – that is, BELOW ascertainable “fair market value”. Reducing the price later as prices fall will not get your property sold because you are STILL priced above market!
3. When In Doubt, Price It Even Lower This is not a market to “speculate”. Of course you want to get as much as you can for the property. No one wants to feel as if they have left money on the table. It is counter-intuitive, but the BEST way to get the most money for your property is to ask LESS, not more! The reason is that if you have priced the property too low, buyers will recognize that and bid the price up. Even in THIS market!
4.You Have A Narrow Window To Maximize Your Dollars Your best chance to get the most money for your property is when it first hits the market. The reason is that your BEST buyers are the ones that are already in the market, have already done their homework and are just waiting for the right deal. Once you lose that pool of buyers, they are gone – forever!
5. You Have One Chance To Make A Good Impression Yes, staging your home is important - without question. But please notice that this is the LAST item on the list. Yes, buyers will pay a premium for a property that is in move-in condition. However, buyers determine a RANGE they are willing to pay based on condition and they do not generally exceed that range. The primary purpose of staging your property is to compete favorably compared to the other properties they are looking at in their price RANGE.
So clean up, tidy up, de-clutter, throw away or pack away those things you don’t use on a daily basis. However, do NOT spend money on making big capital improvements. You may want to do some paint touch ups or replace unsalvageable carpeting or tile. But leave the new appliances or central a/c for the next owner to install.
If you are looking to sell your home I have put together a set of strategies and specific tips that can help you sell your home in this market and avoid all the pains of doing this yourself. If you are still contemplating selling your property, even in this market, then download my FREE report now, “7 Selling Mistakes You DON”T want to make or YOU Won’t Get Top Dollar In A Down Market”
Tuesday, May 12, 2009
Chicago Home Buyers - $8000 first-time homebuyer tax credit
U.S. Dept. of Housing and Urban Development to allow FHA consumers to use $8,000 first-time homebuyer tax credit for down payment. FHA approved lenders will be allowed to "monetize" tax credit with a short-term bridge loan, making funds available at closing.
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