blatently plagerized from Seattle Times article written by Vinnie Tong, 08/24/07
NEW YORK — U.S. home prices fell 3.2 percent in the second quarter, the steepest rate of decline since Standard & Poor's began its nationwide housing index in 1987, the research group said today.
A separate index that covers 20 U.S. cities fell 3.5 percent in June from a year earlier, but a small group of cities in that index — including Seattle — actually bucked the trend and posted price increases in June.
The broad decline in home prices around the nation in the second quarter shows no evidence of a market recovery anytime soon, one of the architects of the index said.
MacroMarkets Chief Economist Robert Shiller said the declining residential real estate market "shows no signs of slowing down."
The report came a day after the National Association of Realtors said sales of existing homes dropped for a fifth straight month in July while the number of unsold homes shot up to a record level.
The S&P/Case-Schiller quarterly index tracks price trends among existing single-family homes across the nation compared with a year earlier.
Housing is among the economic indicators closely watched by Federal Reserve policymakers.
After five years of rapidly rising home prices, the market stalled last year, with prices holding steady or falling as sales slowed. Since then, lenders have made it more difficult for some people to get mortgages by tightening standards just as foreclosures rise and some who borrowed at adjustable rates are facing higher payments they can't meet.
Problems have spread from those with poor credit repayment histories to more creditworthy borrowers.
The Fed has taken a number of steps aimed at stabilizing the situation, and market watchers are looking for a possible cut in the Fed's target for the federal funds rate, which is the rate commercial banks charge each other for short-term loans. That rate has been kept steady at 5.25 percent for more than a year.
The Fed has its next regularly scheduled meeting Sept. 18.
Only five of the cities surveyed for S&P's 20-city index showed a year-over-year increase in prices in June. Seattle led the way with a 7.9 percent price rise, followed by Charlotte (6.8 percent) and Portland (4.5 percent). Atlanta and Dallas (1.6 percent each) rounded out the group.
Wednesday, August 29, 2007
Monday, August 20, 2007
Foreclosures Worries
In amongst the worries and woes of the existing mortgage crisis, I have heard murmurs and rumors about our local real estate losing value. Please let me reiterate, for those of you I have not currently lectured, about the basic facts of supply and demand. We have a very strong market in this area, mostly for the reasons that constitute a normal increase in the average home price. We have increased movement into the area, we have a strong job market, and of course, we have only so much land to go around. If you doubt this at all, step outside and look around. To the west you will find water, to the north and east you will find mountains and to the south you will find Oregon. There really is only so much land to go around. Seattle is mostly surrounded by water.
That being said, of course, we are finding a softening in the price ranges from 500-900K. That means simply that sellers are going to have to make more concessions to facilitate the sale of their home. That is it. It does not mean much more than that. The majority of this is coming from sellers who originally purchased more home than they could afford and now are having to make some cutbacks in their lifestyle. This is about the worst of what we are going to see as far as national ramifications of the current mortgage mess. That and not being able to get the loans we were once able to come by rather easily.
In these uncertain times, it truly is necessary to get back to basics. Clean up your credit, Save for a rainy day. Create Passive Income. All of the things we were supposed to being the whole time. Why? Because, I can tell you to be sure, in the coming markets. Those who are set up to make investments are going to be the ones to benefit. Who said, "Fortune favors the prepared."? Whoever it was, has been thru something like our existing market. If you have questions about your next step, please call me. I am here to help!
Listed below are the latest top foreclosure zip codes in the US. As you can see, not one is from the state of Washington.
500 Top foreclosure zip codes
June 19 2007: 3:56 PM EDT
NEW YORK (CNNMoney.com) -- The most foreclosure activity is clustered in two area; old Rust-Belt areas and new Sun-Belt ones. More than a quarter of all leading foreclosure zip codes are in California but many of the worst-hit zip codes are in the Midwest. Ohio has 49 zip codes in the top 500, trailing only California and Florida, which has 72. Michigan has 34, including four in the top 10. All of them are within Detroit city limits.
Foreclosures: Hardest hit zip codes
Zip Code,City,State,Default Notices,Auction Notices,Bank Repossessions,Total Foreclosure Filings
44105,Cleveland,OH,140,184,459,783
30310,Atlanta,GA,1,349,359,709
80219,Denver,CO,8,657,40,705
48228,Detroit,MI,160,491,28,679
48205,Detroit,MI,164,425,45,634
95823,Sacramento,CA,450,41,143,634
48224,Detroit,MI,139,421,23,583
89031,North Las Vegas,NV,348,127,100,575
80239,Denver,CO,5,523,25,553
48219,Detroit,MI,124,400,25,549
44112,Cleveland,OH,71,186,288,545
48227,Detroit,MI,126,385,30,541
95828,Sacramento,CA,372,46,113,531
60628,Chicago,IL,409,46,69,524
92336,Fontana,CA,380,74,55,509
46201,Indianapolis,IN,334,56,100,490
48235,Detroit,MI,116,356,17,489
89131,as Vegas,NV,283,100,105,488
33160,North Miami Beach,FL,421,37,22,480
44108,Cleveland,OH,97,115,261,473
44120,Cleveland,OH,80,124,261,465
92563,Murrieta,CA,320,105,40,465
Now, if you have any relatives or friends in the Midwest. I want you to call them and see if they are financially ok. These statistics are pretty scary.
All the best!
Marya Noyes
206-686-5363
That being said, of course, we are finding a softening in the price ranges from 500-900K. That means simply that sellers are going to have to make more concessions to facilitate the sale of their home. That is it. It does not mean much more than that. The majority of this is coming from sellers who originally purchased more home than they could afford and now are having to make some cutbacks in their lifestyle. This is about the worst of what we are going to see as far as national ramifications of the current mortgage mess. That and not being able to get the loans we were once able to come by rather easily.
In these uncertain times, it truly is necessary to get back to basics. Clean up your credit, Save for a rainy day. Create Passive Income. All of the things we were supposed to being the whole time. Why? Because, I can tell you to be sure, in the coming markets. Those who are set up to make investments are going to be the ones to benefit. Who said, "Fortune favors the prepared."? Whoever it was, has been thru something like our existing market. If you have questions about your next step, please call me. I am here to help!
Listed below are the latest top foreclosure zip codes in the US. As you can see, not one is from the state of Washington.
500 Top foreclosure zip codes
June 19 2007: 3:56 PM EDT
NEW YORK (CNNMoney.com) -- The most foreclosure activity is clustered in two area; old Rust-Belt areas and new Sun-Belt ones. More than a quarter of all leading foreclosure zip codes are in California but many of the worst-hit zip codes are in the Midwest. Ohio has 49 zip codes in the top 500, trailing only California and Florida, which has 72. Michigan has 34, including four in the top 10. All of them are within Detroit city limits.
Foreclosures: Hardest hit zip codes
Zip Code,City,State,Default Notices,Auction Notices,Bank Repossessions,Total Foreclosure Filings
44105,Cleveland,OH,140,184,459,783
30310,Atlanta,GA,1,349,359,709
80219,Denver,CO,8,657,40,705
48228,Detroit,MI,160,491,28,679
48205,Detroit,MI,164,425,45,634
95823,Sacramento,CA,450,41,143,634
48224,Detroit,MI,139,421,23,583
89031,North Las Vegas,NV,348,127,100,575
80239,Denver,CO,5,523,25,553
48219,Detroit,MI,124,400,25,549
44112,Cleveland,OH,71,186,288,545
48227,Detroit,MI,126,385,30,541
95828,Sacramento,CA,372,46,113,531
60628,Chicago,IL,409,46,69,524
92336,Fontana,CA,380,74,55,509
46201,Indianapolis,IN,334,56,100,490
48235,Detroit,MI,116,356,17,489
89131,as Vegas,NV,283,100,105,488
33160,North Miami Beach,FL,421,37,22,480
44108,Cleveland,OH,97,115,261,473
44120,Cleveland,OH,80,124,261,465
92563,Murrieta,CA,320,105,40,465
Now, if you have any relatives or friends in the Midwest. I want you to call them and see if they are financially ok. These statistics are pretty scary.
All the best!
Marya Noyes
206-686-5363
Friday, August 17, 2007
Fed cuts the discount rate
As I am sure many of you have been aware, the markets are changing rapidly. We have had many lenders close their doors for good in the last 2 weeks. We are definately in a different world from just a month ago in the lending sector. However, we did get a sign that the Fed, "really does like us" today.
FED ACTION: The Federal Reserve cut the discount rate this morning. That's the rate that the Fed charges member banks for short-term loans. It won't have a direct effect on the interest rates that consumers pay.
The rate that does directly affect consumers is the federal funds rate. That one remains unchanged at 5.25 percent. The prime rate remains 8.25 percent. Rates won't change on debt that's indexed to the prime rate, such as home equity lines of credit and some credit cards.
My colleague Greg McBride, writer of the Fed Blog, is out of pocket this morning but sends this missive via BlackBerry:
Cutting the discount rate but not the fed funds rate is the next step up from injecting capital in the system, but is still short of cutting the fed funds rate. This is a move saying "the Fed is open for business" to keep credit markets functioning, but doesn't have a direct consumer impact.
The Fed issued two explanations this morning.
Here's the first:
Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.
And the second:
To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee's target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks' usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower. These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York and San Francisco.
Banks are going to be happy about that ability to borrow from the Fed for 30 days, renewable by the borrower. I hope this calms down the credit markets, including the one for mortgages.
(bankrate.com)
We shall see, we shall see.
FED ACTION: The Federal Reserve cut the discount rate this morning. That's the rate that the Fed charges member banks for short-term loans. It won't have a direct effect on the interest rates that consumers pay.
The rate that does directly affect consumers is the federal funds rate. That one remains unchanged at 5.25 percent. The prime rate remains 8.25 percent. Rates won't change on debt that's indexed to the prime rate, such as home equity lines of credit and some credit cards.
My colleague Greg McBride, writer of the Fed Blog, is out of pocket this morning but sends this missive via BlackBerry:
Cutting the discount rate but not the fed funds rate is the next step up from injecting capital in the system, but is still short of cutting the fed funds rate. This is a move saying "the Fed is open for business" to keep credit markets functioning, but doesn't have a direct consumer impact.
The Fed issued two explanations this morning.
Here's the first:
Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.
And the second:
To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee's target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks' usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower. These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York and San Francisco.
Banks are going to be happy about that ability to borrow from the Fed for 30 days, renewable by the borrower. I hope this calms down the credit markets, including the one for mortgages.
(bankrate.com)
We shall see, we shall see.
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