Archives for December 2010

Costa Mesa Real Estate Update

In This Issue

Last Week in Review: Are rates going to come back? Here’s a break down of possible scenarios!

Forecast for the Week: Get ready for a busy week. Find out what you should watch.

View: Know someone in college or headed there soon? Watch the video below for tips to avoid unexpected college costs.

Last Week in Review
“Where do we go from here?” That question from Alicia Keys’ song is on the minds of many Americans, as they wonder where home loan rates are headed after the recent negative news for Bonds.

Last week, Congress was busy at work on negotiations to extend the Bush-era tax cuts. That news kept a lid on any improvement for Bonds and home loan rates, due to the prospect of an ever-increasing deficit.

And adding to the troubles for Bonds and home loan rates last week was news that inflation is growing in China… and growing fast. How does that impact us? Remember, it’s a global economy, so Bond prices all over the world worsen on news of inflation, which is bad for home loan rates.

So the big question is: Will home loan rates go back down?

Although rates are still near historic lows, they have been headed up… and indications are that those unbelievably low home loan rates may be behind us. In fact, there are only a few things that would bring back the lows that we saw in early November:

  • If the tax cut package doesn’t get passed, it would be very bad news for the economy and Stock market – but it would help interest rates.
  • If the Fed’s recent round of Quantitative Easing falls on its face and doesn’t meet its mission of creating inflation, boosting Stock prices, lowering unemployment and creating consumer demand – Bond prices could make some gains as the threat of deflation reemerges. But this is a long shot.
  • If the financial problems in Europe worsen significantly – which would drive investors into the safe haven of the US Bond market – it could help Bond prices, but probably only modestly.

Realistically, the chances of these events happening are unlikely – and in the end, rates may see some brief and fleeting improvements, but many experts believe they will likely continue to creep up over time. And when you include the stimulative action of extending the present tax rates and adding further cuts, it’s tough to see Bonds or home loan rates improving much.

The good news is that home loan rates are still extremely attractive and are still near historic lows for now. If you or someone you know has been thinking about purchasing or refinancing a home, NOW is the time to call or email to get started.

Forecast for the Week

Get ready for a busy week of economic reports and news that could impact home loan rates!

  • We’ll start off Tuesday morning with the Retail Sales report for November, as well as the Fed’s final FOMC Meeting and Policy Statement of the year coming on Wednesday.
  • We’ll also see new inflation reports starting on Tuesday with the Producer Price Index (PPI), which measures inflation at the wholesale level. The very next day, we’ll see the Consumer Price Index (CPI) with a look at inflation on the consumer level. With all of the recent talk over inflation concerns in the future, it will be important to see what these reports reveal – since inflation is the archenemy of Bonds and home loan rates.
  • We’ll also get a dose of manufacturing news in the Empire State Index, which looks at New York State’s manufacturing sector, and is a good gauge of manufacturing overall. On Thursday, we’ll also see the Philadelphia Fed Index, which is another important manufacturing report. Those two indices have the potential to impact the market, since they indicate the health of the manufacturing sector in the US.
  • Thursday brings the Initial and Continuing Jobless Claims Report. Last week, Initial Jobless Claims came in at 421,000, which was below expectations. That was encouraging news, but we still need to see consistent readings below 400,000 before real confidence in the labor market can take hold.
  • Finally, we’ll see more housing news this week, when reports on Housing Starts and Building Permits in November are released on Thursday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

The chart below shows the recent direction of Bonds – and, therefore, home loan rates. The important thing to note is the downward trend, which shows how Bond pricing and therefore home loan rates continued to worsen last week.

Fortunately, there’s still time to lock in at near historic lows. It only takes a few minutes to see if this makes sense for you, or one of your friends, family members, neighbors, clients or coworkers. Call or email today, and I’ll be happy to help right away.


Chart: Fannie Mae 4.0% Mortgage Bond (Friday, December 10, 2010)

The Mortgage Market Guide View…
Surprise: More College Expenses! Here’s How to Avoid Them…

College tuition costs are staggering these days – and so are some of the college-related expenses that you may not be expecting. Watch this video from on unexpected college expenses to come up with ways to avoid those indirect costs.

Whether you’re planning to send a child to college soon or you know a student in college this year that has already experienced some of these unexpected costs, this video is invaluable!


Economic Calendar for the Week of December 13-17, 2010

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of December 13 – December 17

Date ET Economic Report For Estimate Actual Prior Impact
Tue. December 14 08:30 Producer Price Index (PPI) Nov 0.5%   0.4% Moderate
Tue. December 14 08:30 Core Producer Price Index (PPI) Nov 0.2%   -0.6% Moderate
Tue. December 14 08:30 Retail Sales Nov 0.8%   1.2% HIGH
Tue. December 14 08:30 Retail Sales ex-auto Nov 0.6%   0.4% HIGH
Tue. December 14 02:15 FOMC Meeting 12/14 Unch   0.25% HIGH
Wed. December 15 09:15 Capacity Utilization Nov 75.0%   74.8% Moderate
Wed. December 15 09:15 Industrial Production Nov 0.3%   0.0% Moderate
Wed. December 15 08:30 Empire State Index Dec 3.0   -11.14 Moderate
Wed. December 15 08:30 Core Consumer Price Index (CPI) Nov 0.1%   0.0% HIGH
Wed. December 15 08:30 Consumer Price Index (CPI) Nov 0.2%   0.2% HIGH
Thu. December 16 08:30 Jobless Claims (Initial) 12/11 425K   421K Moderate
Thu. December 16 08:30 Housing Starts Nov 545K   519K Moderate
Thu. December 16 08:30 Building Permits Nov 558K   550K Moderate
Thu. December 16 10:00 Philadelphia Fed Index Dec 12.5   22.5 Moderate
Thu. December 16 10:00 Index of Leading Econ Ind (LEI) Nov 1.2%   0.5% Low
The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.
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COSTA MESA, CA—Local real estate firm Weichman Associates-Realtors® is hosting its 4th

Annual Polar Express family event on Saturday, December 4 at 2:00 p.m. This event, based on the popular family movie The Polar Express, was conceived as a way for Weichman Realtors founders Larry Weichman and Kurt Galitski to connect with their fellow Costa Mesa residents and say thank you for years of welcome support.

This year Weichman and Galitski have joined forces with the Costa Mesa Fire Department’s Spark of Love Toy Campaign sponsored by ABC7 and the U.S. Marines Toys for Tots program to raise awareness for the need for toys this holiday season. Participants in this year’s Polar Express event will be asked to bring an unwrapped gift or gift card valued at $10.00. Donations are not required to take part in the event but are greatly appreciated.

“We are thrilled to be a part of this endeavor,” said Vice President and co-founder of Weichman Associates-Realtors, Kurt Galitski. “We have a real compassion for kids in need not just in Costa Mesa, but throughout Orange County. Spark of Love and the U. S. Marines Toys for Tots drive ensure that these children get something to smile about on Christmas Day.” Galitski also added “Larry and I are also very honored to work alongside another organization we have long admired, the Costa Mesa Fire Department.”

ABC7’s Spark of Love is a joint collaboration with fire departments all over southern California and with ABC Channel 7. All toys are distributed in Orange County go through a single warehouse to organizations that apply through the Toy Collaborative. Unwrapped toys for infants through 18 years and gift cards in $10, $15, or $20 denominations are collected.

Weichman and their staff will be hosting The Polar Express from 2:00 to 4:00 p.m. at Goat Hill Junction- 2480 Placentia Avenue in Costa Mesa. They invite all area families to the event to so they can enjoy spending time with Santa Claus and his Elves. Also featured at this event will be many FREE activities including the train ride, pictures with Santa, a coloring contest, face painting, view a U.S. Marine vehicle, fire apparatus and much more. Reservations are encouraged. Please RSVP by calling the Weichman Polar Express Hotline at 877.444.2177 ext. 2009. The Costa Mesa Fire Department will collect toys through January 2 at all fire stations, for more information contact Brenda Emrick at 714.327.7406 or

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Call to Action: Mortgage Interest Deduction (MID) is Vital to Homeownership

I’m disappointed that anyone in Congress — or on a Presidential Commission — would even suggest limits to the Mortgage Interest Deduction. Mortgage interest has been deductible for nearly 100 years, and the proposed changes will affect all 75 million home owners in the United States. We must act now to make sure the MID is not changed.

Ever since the Deficit Commission announced its conclusions, the news media have been buzzing about the report. And what do they emphasize? Proposals to limit or even eliminate the Mortgage Interest Deduction. I’m concerned because all this does is scare the public — and potential buyers — away from the housing market. The last thing the housing industry needs right now (and for the foreseeable future) is another bucket of ice water to be thrown on the market. People who hear these news reports don’t differentiate between a proposal and a done deal. They just know that a tax provision they actually understand and rely on is under siege. This is just unacceptable.

I am asking you to call to your representative’s office today to ask him or her to defend the Mortgage Interest Deduction from any cuts or reduction as outlined in the Deficit Commission Report.

This Call for Action requires you to do something a little different. In order to track the calls we are making to Congress, we need you to follow the link and enter your phone number and zip code to be connected to your representative’s office. You can make this call now, or later today at a more convenient time. But we need you to make this call.

After you enter the information, you will receive a phone call with instructions before being patched through to Capitol Hill.

Count me in, I am ready to make my call*

This call is important. We need to be clear and draw a line in the sand. While we all support efforts to reduce the deficit, further undermining the critical housing recovery cannot be the price that is paid. Here are some suggested talking points for you to use when you call:

  • I am a constituent .

  • I have been on the front lines of the housing crisis. I can assure you that even talk of changing MID harms an already fragile market.

  • I am strongly opposed to the Deficit Commission’s proposal to either limit or eliminate the Mortgage Interest Deduction.

  • News reports saying that Congress threatens to repeal or limit MID will keep potential buyers on the sidelines and further delay the housing recovery.

We must speak loudly and clearly with one voice to ensure the further recovery of our economy and the housing market and educate every legislator about how much Home Ownership Matters. We can’t do that with the few REALTORS® who take action consistently. We need every REALTOR® to respond.

 Please call NOW and tell your representative to help defend home ownership and the MID*.

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