Northwest MLS director John Deely agreed the new low down payment loan programs and mortgage rates are a boost to activity.
"In December our brokers experienced high open house traffic and strong demand from buyers as listing inventory declined," reported Deely, the principal managing broker at Coldwell Banker Bain in Seattle. "Buyers are determined to take advantage of the continued low interest rates and to make their move sooner rather than later," he added.
MLS (Multiple Listing Service) members reported modest year-over-year price gains (around 5.5 percent) for homes and condos that sold last month compared to 12 months ago. The number of new listings added to inventory was nearly identical to activity of a year ago, but with pending sales outpacing new listings, the selection, as measured by total active inventory, dwindled by about 8 percent compared to a year ago. MLS members also reported 5,794 pending sales (mutually accepted offers) for an increase of nearly 11 percent from the year-ago total of 5,224 pending. The numbers show not only is it a good time to sell, its also a great time to buy. Take advantage of it being much easier for purchasers to qualify for a loan now than it was just a few months ago and the fact that interest rates have remained low. This will allow more first-time buyers to break into homeownership. Call me, lets get the ball rolling!
FANNIE MAE's (The Federal National Mortgage Association) economic outlook reports show us ending this year, not quite on the high note that had been earlier forecasted. This after a year of mixed reports. Because of a weak 4th quarter, moving us backwards after a strong 3rd. It now looks as though we will end this year a full percent point short of the growth we achieved in 2013. The good news is that, moving into 2015 we will still be expecting continual growth, maybe just not as fast as earlier reports. “The December forecast is relatively little changed from the November forecast. We expect a weaker fourth quarter to follow a stronger third quarter, but we don’t see it as a sign of overall weakness,” said Fannie Mae Chief Economist Doug Duncan. Looking forward to a stronger than predicted '15.
The US housing recovery is different from city to city and state to state, check out CNBC's interactive map and see how your town stacks up against all the rest!?
If you have read any of my other posts or have been paying attention to mortgage news, then you know that the Fed began to taper off the purchasing of mortgage backed securities a while back. Well the taper is officially over. The FOMC (Federal Open Market Committee) has concluded it's more than two year old asset purchase program in part because of the substantial improvements to the outlook of the labor market and the strength in the economy. Since the committees last meeting the economy has been expanding at a moderate rate. “The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions,” the FOMC said. NAR (National Association of Realtors) reports that existing home sales have dropped 1.8% in August. Existing home sales fell to a seasonally adjusted annual rate of 5.05 million in August, these are numbers from completed transactions of single-family homes, condos and co-ops, and town homes. Sales are at the second-highest pace of 2014, but remain just over 5% below the 5.33 million level from last August. Cash sales were 23% of transactions in August and they dropped for the second straight month. It seems that everyone that was paying with cash has already bought! Click the source link below to read the whole article. Lawrence Yun, NAR chief economist, says sales activity remains stronger than earlier in the year, but fell last month as investors stepped away. While mortgage rates are still pretty low, this was the biggest jump of the year. Not that its any surprise. Rates were on the rise this week, and fixed-rates made the biggest one-week leap. This puts them at the highest point since the last week of April. Here are the Freddie Mac reports on the national averages with mortgage rates through mid September:
The FED met today and at this time they did not raise rates. Prime remains at 3.25%. The plan is to continue to taper the purchasing of mortgage backed securities by $10 Billion per month in the third quarter to a total of $15 Billion per month. This is not new news; just a reminder that we will see rates rise in the coming months. The other comment made was the FED will continue to keep rates low for a considerable time. My personal thoughts are we will see a gradual increase in rates over time vs. a sudden rise. I have seen rates tick up in the last week with the anticipation of this announcement. Today a 30 year fixed is holding onto 4.5% paying zero points (up to a loan amount of $417K); last week we were at 4.375%. Source: Julia Eaton with Axia- juliaeaton.axiahomeloans.com
A new report from Zillow says that water front homes are worth more than non waterfront homes. Well its obvious that any home on water, whether its ocean or lake in most cases is going to be worth more than a home not on water, but by how much? The median value of homes in Seattle not on the water is just under $500,000 and for those homes on the water it can be up to 250% more. That means that the average water front single family home is worth double, if not more than the median value of homes not on the water in Seattle. Wow, thats a big difference for a city that is surrounded by so much water. The numbers of course vary for areas like bellevue, Bainbridge or Mercer Island. Seattle is one of the fastest growing cities in the US. From my office I can look outside at the city skyline and count over 20 cranes! Love this city, and all the water that surrounds it. "The typical oceanfront or lakefront, single-family home is worth more than double the median value of all homes, and in some communities the median waterfront house could be worth ten or more times the median value of non-waterfront houses," says Zillow. Remember those mortgage-backed securities that Merrill Lynch, who is owned by BOA, was pushing back in the mid to late 2000s? Well it turns out that they were not quite as stable as promised! Okay so we already knew that but now someone is being held accountable and will have to pay. BOA has now agreed to a record breaking 17 billion dollar settlement, making it is the biggest single corporation settlement in US history. In the settlement terms it seems Bank of America will pay the government 10 billion in cash, 7 billion in consumer relief and they will have to acknowledge that they misrepresented the quality of the securities begin sold at the time through Merrill Lynch. The good news is that the smoke is clearing and we are very close and even beyond in some markets where we were when the bottom fell out in '07. Bank of America has reached a record $17 billion settlement with the government over sales of shoddy mortgage-backed securities during the run-up to the financial meltdown. The settlement is the largest with a single corporation in U.S. history. The consumer confidence index was at 86.4 in June and jumped up to 90.9 in July, putting it at the highest level since late October in '07. Before this June to July jump, economists were predicting a drop so this jump was an unexpected surprise. It seems that the recent up-turn in hiring and improved economic growth are creating a more optimistic climate for consumers. The US is currently in one of the best hiring stretches we have seen since the recession ended in mid '09. This stretch has been going for the last 6 months and economist are expecting it to continue. “Strong job growth helped boost consumers’ assessment of current conditions, while brighter short-term outlooks for the economy and jobs, and to a lesser extent personal income, drove the gain in expectations,” said Lynn Franco, director of economic indicators at board. |
AuthorJason Moon Real Estate Broker with ColdWell Banker Bain. Seattle, WA Archives
November 2019
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