Posts Tagged: ‘economy’

Buyers Market Coming Soon

August 20, 2018 Posted by Andre Hemmersbach

Are we on the cusp of a change in the Real Estate market? The last 4 years have seen incredible increases in real estate values mainly due to an imbalance between supply and demand. Buyers (demand) have outstripped listing inventory (supply) month after month and year after year. In the last few weeks, I have had a number of conversations with Realtors who have told me that things seem to be slowing down. Multiple offers scenarios, while still happening, are being joined by less buyers and some properties that are not priced correctly are not getting any action. The truth will be revealed at the end of August and September (see chart below).

Price vs Listing Chart

Price vs Listing

 

The end of summer traditionally has a pretty sharp drop off in the number of properties for sale. If at the end of August and September that seasonal adjustment does not happen with its normal veracity, we could be seeing a future with buyers having a bit more room for negotiations.

I have been helping clients finance their real estate for the last 30 years. Call me for a free consultation.

Hot and Upcoming Real Estate Markets 2018

May 18, 2018 Posted by Andre Hemmersbach

A great way to find hot up and coming real estate markets is to see where people are moving and it’s as simple as supply and demand…remember Econ 101?

According to United Van Lines, which has been tracking moving statistics for 40 years, retirees left sand and sunny beaches for western mountains. See the “Annual National Movers Study” below.

Map of Migration

Migration Map 2017

Moving In Real Estate Markets

The top inbound states of 2017 were:
1. Vermont
2. Oregon
3. Idaho
4. Nevada
5. South Dakota
6. Washington
7. South Carolina
8. North Carolina
9. Colorado
10. Alabama

As a region, the Mountain West continues to increase in popularity with 54 percent of moves being inbound. The West is represented on the high-inbound list by Oregon (65 percent), Idaho (63 percent), Nevada (61 percent) Washington (59 percent), and Colorado (56 percent). Of moves to Oregon, the highest ranking western state, a new job or company transfer (49 percent) and proximity to family (24 percent) led the reasons for most inbound moves.

The southern states also saw a high number of people moving in with 52 percent of total moves being inbound. United Van Lines found the top reasons for moving south included company transfer/new job, retirement and proximity to family.

The Northeast continues to experience a moving deficit with New Jersey (63 percent outbound), New York (61 percent) and Connecticut (57 percent) making the list of top outbound states for the third consecutive year. Massachusetts (56 percent) also joined the top outbound list this year.

New to the 2017 top inbound list are Colorado at No. 9 and Alabama at No. 10 with 56 and 55 percent inbound moves, respectively

 

Moving Out Real Estate Markets

The top outbound states for 2017 were:
1. Illinois
2. New Jersey
3. New York
4. Connecticut
5. Kansas
6. Massachusetts
7. Ohio
8. Kentucky
9. Utah
10. Wisconsin

Illinois (63 percent) moved up one spot on the outbound list to No. 1, ranking in the top five for the past nine years. New Jersey previously held the top spot for 5 consecutive years. New additions to the 2017 top outbound list include Massachusetts (56 percent) and Wisconsin (55 percent)

Purchasing a rental property or a second home in a hot and up coming real estate markets is a good bet if you are looking for capital  appreciation. If you follow some basic real estate investment guidelines, do a little homework and work with professionals, it could pay off in a big way! Call me to discuss winning strategies for purchasing investment properties.

Good Economy is Bad For Mortgage Rates

January 30, 2018 Posted by Andre Hemmersbach

Higher Mortgage Rates In Our Future?

Higher mortgage rates? I thought the economy was doing well? It seems almost backwards but a good economy is bad for interest rates. As the economy picks up steam,

Mortgage money is going to cost more

Money

investors start to worry about inflation. How much will inflation diminish my investment returns? The answer is simple for them. They only buy investments that bring a higher return adjusted for a higher anticipated inflation. Mortgages with lower rates do not get purchased, so rates move up. Simple supply and demand. So while the good news is your retirement account is growing with every Dow increase, the bad news is that any credit you may have or acquire, like a car or home loan, will be at a higher rate.

What does that mean in dollars and cents?

A 0.25% rate rise on a $300,000 mortgage equates to a monthly payment increase of about $44.00 per month and while that may not seem like a lot, these little increases can add up. According to Samantha Sharf at Forbes, in an article for January 3, 2018, mortgage rates are anticipated to top out around 4.5% by the end of 2018.

Please call me for a free consultation. We can discuss if you are in the correct mortgage product or need help restructuring high credit card or soon to be higher Equity Line of Credit debt.

Big Rate Drop Thanks To Oil Prices

January 8, 2015 Posted by Andre Hemmersbach

Big Rate Drop Lower Gas Prices

Lower Gas Prices Big Rate Drop

 

Look at the big rate drop that the mortgage market has served up if you thought that the good news was the $25 you were saving at the pumps. Lower oil prices are deflationary and that has been great news for the big rate drop in the mortgage rates over the last 3 weeks. Coupled with weak economic news out of Europe and another Greek Currency hiccup the change in oil prices have really moved the home loan rates in the right direction is you are looking for a home loan to purchase a home or are currently in a mortgage over 4.25%.

Rates on a 30 year fixed rate have dropped to below 3.625% on the very best borrower profiles (APR 3.689). Many of my clients are also considering a term reduction to really kick up the savings. Refinancing from a 4.25%, 30 year fixed rate taken out last year to a new 20 year fixed rate at 3.375% will save a borrower over $131,000 in interest over those 20 years.

If you would like to see if a refinance would make financial sense, please call me I would be happy to perform a free review your current mortgage through my proprietary mortgage calculator.

Payment Increases on Equity Lines

August 14, 2014 Posted by Andre Hemmersbach

During the last five years millions of homeowners have taken advantage of the government’s Home Affordable Modification Program (HAMP) or in the case of mortgages that did not fall under HAMP,  lenders’ proprietary modification programs. These Loan Modification programs (Loan Mods) were initiated to offer relief to desperate homeowners who were facing foreclosure due to various circumstances through temporary rate reductions or interest rate abatements. The key term in the above statement is “temporary”!  Loan Mods along with Home Equity Lines Of Credit (HELOC), a mortgage that is similar to a credit card, will see upward rate and payment adjustments, sending some homeowners back to the brink of financial crisis. (More on HELOCs later.)

To qualify for a Loan Modification borrowers were asked to submit an income and asset package to the lender proving a hardship and current stable income. If the borrower qualified, the lender dropped the interest rate as much as 3 or 4 percentage points and renegotiated a monthly mortgage payment that would represent about 45% of the borrower’s monthly gross income. Via the modification agreement, the borrower usually promised to return to the original rate and terms of the mortgage through 1% annual increases after a five year period.

The Real Estate Bubble burst in late 2008 and the loan modification programs started to gain momentum in 2009 and hit full stride in 2010 through 2012, therefore the first round of the notices for payment increases via the loan modification agreements are starting to be sent out.

Borrowers facing this issue today may have some additional alternatives that were not available to them back in the middle of the recession. At least in Southern California, equity positions have seen healthy gains and the job/income outlook have improved slightly. Options homeowners may consider are: refinancing to current low mortgage rates (albeit at higher rates than their modified rate but lower than their final rate), making the new higher payments via their modification agreement, selling their home to downsize or rent.

As a whole, HELOCs mortgage payments will also be increasing. The basic issue is that the 10 year interest only introductory period, typical in these mortgage products, is now coming due. Homeowner’s with balances on their HELOC will on the 10th anniversary move to a fully amortized 20 year loan and experience a fairly large payment increase. I have previously blogged about the dangers of HELOCs and you can read the remainder of the article at https://cahomehunters.com/real-estate-time-bomb/.

Bottom-line…. homeowners with these types of mortgage products who do not have the ability to afford the payment increases, may have to make some difficult decisions in the near future.

If I can be of assistance in giving you or a friend advice or direction with these type of products please let me know, as I would be happy to help them.

Also see: http://newsroom.transunion.com/press-releases/transunion-study-identifies-framework-for-managing-1136135#.U-0un_ldV8E

http://www.usatoday.com/story/money/business/2014/01/29/rate-increases-for-hamp-loan-modifications-2009/4964701/

http://www.pwc.com/us/en/consumer-finance/publications/avoiding-default-risk-mortgage-modification-resets.jhtml