The central bank can’t be “complacent about inflation,”
Janet Yellen, president of the Fed Bank of San Francisco, said
in a speech yesterday. Recent measures of consumers’ outlook for
prices “highlight the risk that our attempts to deal with
problems in the real economy could lead to higher inflation
expectations and an erosion of our credibility,” she said.
Yellen also said she anticipates inflation will slow as the
labor market weakens and “commodity prices level off,” echoing
comments by other policy makers.
Investors project the Fed will keep the benchmark interest
rate unchanged at its next meeting on June 25. That would be the
first pause since the central bank started cutting rates in
September.
Rising prices from overseas, reflecting the drop in the
dollar, are another source of concern. U.S. businesses have
leeway to boost prices as companies abroad charge more.
The mortgage markets will overreact for the next 5-10 days. Long Beach mortgage rates should shoot up quickly.
Long Beach mortgage rates dropped, then rose to their original
level, last week. Ive been advising mortgage borrowers to lock all
rates at application, regardless of closing date. Did I miss an
opportunity to improve clients rates? I dont think so. My approach
is more one of limiting losses than improving gains and last week, I
thought there was a threat of higher mortgage rates in Long Beach; I still do.
Inflation data is released Wednesday and Unemployment data is due
out Thursday. These two figures could be the tempest in the teapot and
really affect mortgage rates. We just think there is too much risk to
be floating (holding out for a better rate). If markets overreact (and
they usually do) well change that recommendation but for now, we think
its prudent to lock your mortgage rates.
Currently, the 5/1 ARM offers the best value at 4.875% wholesale
rate. The 30 year fixed rate loan is 5.875% wholesale rate. While
there is risk in losing the rate after 5 years, most borrowers dont
hold a mortgage that long. If you are thinking of moving in the next
few years, it would be well to examine the benefits of refinancing your
home loan to a low 5/1 ARM rate.
Contact me at (858)-777-9751 with more questions.
PS: Congratulations to our host, Laurie Manny. The success of Long Beach Real Estate Home has quickly drawn the admiring eyes of the national real estate industry. She is one of the featured speakers at the BloodhoundBlog Unchained Social Media Marketing Conference brought to you by Zillow.com, in Phoenix, next week. She is also invited to be on a panel at the Inman Real Estate Connect and has participated in California Association of REALTOR discussions, about new media.
Lauries early adoption of new media technologies has given her a decided advantage over real estate agents whom are still relying on traditional media to sell homes. If youre reading this, you are probably included in the 85% of home buyers who start their search online.
Long Beach Real Estate - A Peek Inside the Business of Selling Long Beach Real Estate
Here on our Long Beach Real Estate site I usually write
purely real estate related articles targeted at educating and informing buyers
and sellers of Long Beach Real Estate.
Today I would like to give you a little peek into the business side of
things and explain how they can affect the sale or purchase of your Long Beach homes.
In a recently published post I disclosed the 2008 closed
sales in Long Beach;
674 of them, through 4/30/08. While the
chart shows the sales increasing each month, the sales figures are still very
low. (Includes sales of homes, condos,
lofts, co-ops, Oyos, 2-4 units and 5+ units as recorded on the MLS)
Jan 130
Feb 153
Mar 179
Apr 212
Total: 674
These are difficult times for those of us surviving in the
real estate industry. Going into this
down market there were about 2900 licensed Realtors on record, there are
currently about 1600 licensees active in the Long Beach
area. Every market will support a
certain amount of agents based on the closed sales of that market. Each agent needs a certain amount of closed
sales in order to survive. Lets assume
that 8 to 10 closed sales for the year are required for a Realtor to even
survive this market; 674 closed sales would produce 8 to 10 sales for the year,
for between 200 and 250 Realtors. Those
sales are currently spread across 1600 current licensees, which would equate to
less than ½ of a sale for each Realtor for the first 4 months of 2008.
In the real estate industry we have an 80/20 saying. It states that 20% of the agents do 80% of
the business. 20% of 1600 agents = 320
which would equate to about 2 closed sales for the majority of the 20% still
doing business.
So how are 1600 Realtors surviving a market with sales that
will currently only support 200 to 250?
Some
have other income, or a spouse or significant other with income.
Some
have taken on Part or Full time jobs, while trying to juggle their real
estate.
Some
have anticipated this market and made plans to survive it.
Some
are making enough sales to manage.
What of the 80%? That
is 1280 agents, still active, for the last 4 months. How are they surviving with little or no sales?
Well, they either have spousal support a trust fund or they have accepted
salaried positions. Lets take a look at
that. Real estate is a more than full
time job; it is a commitment which permeates every hour of every day of our
lives. Real estate transactions require
a lot of attention on a daily basis.
Escrow, title, lenders, inspections, appraisers banks and more need to
be attended to, mostly during normal business hours. Buyers need to see
properties around their schedules which often means after work or weekend
showings. Sellers properties often need
tending, flyers run out; keys go missing from a lock box or end up in another
box on the same property. A pipe may
burst on a listing with an out of town owner; anything can happen. How is an agent who has accepted employment
elsewhere, with a set schedule, going to be able to deal with the schedule and
responsibilities of a full time Realtor?
How does that affect the buyer or seller? Has the agent even disclosed to the buyer or
seller that they are not fully available?
Do you know if your agent is available to conduct business, full time on your
behalf?
Long Beach Own Your Owns-OYOs-Condo Conversions-Income Properties in Long Beach
Long Beach Own Your Owns - OYOs
What the Heck is an OYO?
Why would I want to own one?
Long Beach has been home to many Own Your Owns over the years. They can be found throughout Downtown Long Beach, Alamitos Beach, Bluff Park and into Belmont Heights; older, usually 2 or 3 story buildings tucked between newer and sometimes taller buildings. Recent Condo Conversions have trimmed the numbers of available OYOs
considerably. OYOs used to be a really good investment, selling for considerably less than Long Beach Condos, they proved to be a very desirable purchase. When they successfully converted to condominiums owners realized large profits. Often condo conversion was the motivation for purchasing an Own Your Own.
Many buyers ask about OYOs. They want to know if they are the same as a condo, or more like a stock cooperative.
OYOs are similar in ownership to condos in that they are both fee
simple ownership with individual tax bills and deeds. OYOs are a
pre-condominium form of ownership, mostly built in the 50s. They
generally sell for less than condos and are occasionally candidates for
condo conversion, if they qualify, at which time they increase in value
dramatically. Often OYOs will not have sufficient parking to qualify
for condo conversion.
Have we lost the moral stigma associated with foreclosure?
HR 5830: The FHA Housing Stabilization and Homeowership Retention Act of 2008
, is designed to provide relief for homeowners in trouble by
refinancing their loan to reflect lower housing valuations. If the
current lender 'forgives 10% of the loan balance, it allows a
homeowner to enter into an equity sharing type of arrangement for a
refinanced loan.
