Snoqualmie
Pass Real Estate, Snoqualmie Pass Properties, Snoqualmie Pass Homes, Snoqualmie
Pass Lots, North Bend Real Estate, Snoqualmie Real
Estate, Carnation Real Estate, Suncadia Real
Estate, Easton Real Estate, ThomasWolter.com,
http://www.snoqualmiepassliving.com
Interest Rate Pricing
improves Moderately: Mortgage Bonds and stocks both started out the week with
a bump better as money flowed in to the US markets in response to the attacks
in France. It was a modest move for the better but continued a bounce away from
the recent move higher. Also supporting bonds was continued tepid readings on
the economy. Inflation came in higher than recent readings due mostly to
increased rents and medical costs. The markets continue to digest a belief that
the FED will raise their Federal Funds rate in December. There is a question on
how it will affect the stock markets. It economic readings are strong enough
they will likely improve in spite of the normal circumstance that increased
rates will hurt stocks. With all factors considered there does not appear to be
any pressure on rates to move higher or lower. Stability is not a bad thing as
it helps your clients make reliable predictions on their housing
costs.
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"Why do you build me up Buttercup … just to let me
down." The Foundations. The build-up to December's Fed meeting is
mounting as Federal Open Market Committee members weigh the decision to
change the Federal Funds Rate.
 Minutes released from the October FOMC
meeting stated "most participants" agreed conditions would be
right—or already were right—to consider an increase to the benchmark Fed
Funds Rate at their meeting December 15 and 16. This rate, which is the rate
banks use to lend money to other banks overnight, has been near zero for
nearly a decade. Real average hourly earnings (post-inflation) rose 2.4 percent in October from a year ago, while consumer inflation came in higher than expected due to rising rent and medical costs. Both of these economic readings followed a stellar October Jobs Report that showed job creation rebounded and unemployment dropped to 5 percent. Based on these signs, investors and economists are currently predicting a 74 percent chance of an increase to the Fed Funds Rate next month, though this figure could change based on upcoming economic reports. When the Fed Funds Rate does change, other consumer rates—like home loan rates—might follow, depending on other market and economic conditions. In housing news, after a strong build up in September, October Housing Starts were a bit of a letdown, according to the Commerce Department. Housing Starts hit a seven-month low, falling 11 percent. Despite the drop, Housing Starts remained above the one million mark for seven straight months. This is the longest such streak since 2007. Building Permits, a sign of future construction, were another bright spot, rising 4.1 percent from September. Also of note, the National Association of Home Builders (NAHB) Housing Market Index slipped in November to a reading of 62. However, readings above 50 are considered positive sentiment among home builders. NAHB Chief Economist David Crowe noted, "A firming economy, continued job creation and affordable mortgage rates should keep housing on an upward trajectory as we approach 2016." Despite the recent volatility in the markets, home loan rates remain attractive and near historic lows. If I can answer any questions at all for you or your clients, please get in touch!
What Is Going On In The Economy: US asset classes are
receiving support from a flight to safety in response to the terrorist
attacks in France and Mali last week. Concern over growing strength of ISIS
is seem as a possible damper on European economies. Money is moving to us
markets from overseas. This is causing increases in stock prices and rate
price improvements. Economic growth in Europe is very week and the ECB is
proposing another round of stimulus. Economic growth here is still modest at
best with some indications that it is slowing. Oil prices moved lower which
is not a sign of growth but hard to decipher with so much supply coming from
new sources. New York Manufacturing index came in lower than expected. The
housing markets still show strength but housing starts were lower in October
from the previous month. October job report numbers were good with August and
September revised higher as well. Market watchers think there is a 70% chance
of a FED rate hike in December. The hike will be modest and the FED will
likely make statements that will keep the markets from being spooked about
stocks.
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Real Estate Miscellaneous Stats
Recovery in Real Estate Features Change in Buyers: A Money Magazine
article highlights some details about the market. Here are some bullet points
and a link to the article. The national numbers show new home sales at their
highest level since 2008. Construction crews are working at their highest pace
since the 08 recession and builder confidence is at its highest level in 10
years. But this market is driven by a different buyer profile. 1. Median age
has gone from 35 to 43. This is due to the slow pace of Millennial purchase. 2.
Houses are getting bigger. The older families want more bathrooms. This is good
for builder’s profits? 3. Student debt is not a hindrance to a home purchase
according to a Zillow study. http://money.cnn.com/2015/10/21/news/economy/real-estate-older-buyers-more-bathrooms/index.html?iid=SF_LN
Economist Predicts Wage Growth in Seattle Area: University of
California, Berkley Econ professor Enrico Moretti gave a speech this week for
the University of Washington Runstad Center. At it’s leadership dinner Moretti
highlights information from his book, ‘The New Geography of Jobs’. In the book
he identifies the cities with the ‘right jobs’ and those with the ‘wrong
industries’. Those with the right jobs show wage growth in most income sectors
with each tech job creating 4-5 jobs in other fields from waitress to surgeon.
Cities with the wrong industries have stagnating job markets with dead end jobs
and low average wages. In the Seattle area he predicts wages will rise even
though technology jobs make up only 15-20% of all employment. Economists point
to wage growth as a key to s.ustained strength in Real Estate Markets. Moretti
identifies housing development and public investment in transportation as other
factors needed for sustained growth. See article here: http://www.bizjournals.com/seattle/blog/2015/10/good-news-seattle-youll-be-getting-a-raise-even-if.html
Area October Real Estate Numbers Indicate Robust Market: The Real Estate
markets in King, Snohomish and Pierce counties sales were among the best on
record in October. These numbers occurred in spite of a reduction in inventory
of over 30% from last years low inventory readings. New construction is not
keeping up with the growing demand. The availability of buildable land is one
of the biggest challenges especially close in to employment centers. We are
seeing strong numbers in the north and south end of King County as many are
priced out of more central markets. This caused the biggest price jump in the
suburbs in October. North King county median value jumped 17% to $449,950 and
Southwest King was up to $297,824 which is also a 17% jump. The gains are
spilling over to Snohomish and Pierce counties. Snohomish county is up 11.3% to
$365,000 and Pierce is up 10.5% to $255.250.
New Snohomish County Back Road Attractions Tour Now Available For
Free: For those of you who live in my area I thought this was a great
resource. http://www.bothell-reporter.com/lifestyle/337635451.html
CFPB Cracking Down On Referral Arrangements: Industry insiders who
are in direct communication with officials from the Consumer Financial
Protection Bureau have been warning us of coming greater scrutiny of the Real
Estate Industry regarding ‘pay for referral’ arrangements between title
companies, lenders and real estate brokers. These pay for referral arrangements
are not usually obvious as participants have become more opaque in their
efforts to avoid detection and punishment. Now the CFPB has issued direct
warnings about their intentions to look deeply in to marketing arrangements
including MSA’s. Though many MSA’s do not violate federal real-estate
settlement rules, the Mortgage Broker’s Association says the warning is clear
from the CFPB. They view MSA’s as highly risky ventures often designed to evade
the intention of the RESPA laws. Experts site examples of real-estate brokers
requiring large payments from lenders and title companies in order to display
their promotional materials or have office space in their location in order to
access realtors. One nationally known legal expert on RESPA rules has said most
MSA’s he has reviewed do not look good and likely will not pass CFPB scrutiny.
Typical tip offs that agreements are in violation are marketing that is
directed solely to the customers of a real estate firm rather than to the
general public, payments for marketing that is not consistent with the level of
services provided and payment for office space in a real estate office that is
not typical for local commercial rents in the area. Individual marketing
arrangements are also targets for review by the CFPB. They stress that any
cooperative marketing be paid for by each party that is commiserate with the
space devoted to the parties on the marketing materials.
Snoqualmie
Pass Real Estate, Snoqualmie Pass Properties, Snoqualmie Pass Homes, Snoqualmie
Pass Lots, North Bend Real Estate, Snoqualmie Real
Estate, Carnation Real Estate, Suncadia Real
Estate, Easton Real Estate, ThomasWolter.com,
http://www.snoqualmiepassliving.com
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