Did Someone Say Double-Dip?
We are not talking ice cream here. However, one must admit that the market’s recent reaction to bad news seems to have many thinking that the economy could slip back into recession. Remember, we had plenty of bad news last year and early this year, but the markets kept on advancing. Just last week, CNN/Money addressed this possibility in an article. The findings? “Some economists think a double dip is even less likely than it was earlier this year. David Wyss, chief economist with Standard & Poor’s, said that even though he thinks slower U.S. growth is practically a sure thing, the odds of a double-dip actually have shrunk to 20% from 25% earlier this year. Same goes for Derek Hoffman, founder and editor of The Wall Street Cheat Sheet, who also puts the odds of a double dip at 20%, when just a few months earlier he saw them at 50-50.”
We keep pointing out that the economic news continues to be positive. The Federal Reserve Board’s “Beige Book” indicated continued strength across the nation. However, some districts are experiencing a slowdown and the latest retail sales release confirms these findings. So it begs the question: is the economy’s growth slowing in an example of a recovery experiencing “stops and starts” or is it possible that we will slip into recession? For now, the experts are telling us that a recovery is continuing. However, with stubbornly high unemployment rates and a struggling real estate sector, it just does not feel good. Meanwhile, the markets continue to bounce around violently. For those who are invested in stocks, real estate or any other form of commodity, these are not times for the faint of heart. For those with weak hearts, we suggest you go on vacation for a few months and then go back and read the box scores.
The Markets. Rates continued their downward trend last week after a one-week pause. Freddie Mac announced that for the week ending June 10, 30-year fixed rates averaged 4.72%, down from 4.79% the previous week. The average for 15-year fixed fell to 4.17%. Adjustables were also down with the average for one-year adjustables falling to 3.91% and five-year adjustables decreasing to 3.92%. A year ago 30-year fixed rates were at 5.59%. “Following a relatively weak employment report, bond yields fell this week and rates on home loans followed,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Private Payrolls rose by 41,000 jobs in May, less than a quarter of the market forecast consensus of an 180,000 gain. Rates on 30-year fixed loans hover near the record low set on December 3, 2009 in our survey. Meanwhile, rates on 15-year fixed loans set another record low for the fourth week in a row. Overall, the economy does show signs of improvement. The Federal Reserve reported in its June 9th regional economic review that the economy strengthened in all 12 of its Districts over April and May. It also noted that loan quality was stable or improving in most Districts, but remained an issue for banks with large exposure to real estate.” Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.
Current Indices For Adjustable Rate Mortgages
Updated June 11, 2010
| Daily Value | Monthly Value | |
| June 10 | May | |
| 6-month Treasury Security | 0.18% | 0.22% |
| 1-year Treasury Security | 0.34% | 0.37% |
| 3-year Treasury Security | 1.27% | 1.32% |
| 5-year Treasury Security | 2.12% | 2.18% |
| 10-year Treasury Security | 3.33% | 3.42% |
| 12-month LIBOR | 1.115% (May) | |
| 12-month MTA | 0.402% (May) | |
| 11th District Cost of Funds | 1.825% (April) | |
| Prime Rate | 3.25% |
First-time homebuyers looking to land an $8,000 federal income tax credit may have a little more time to close on their purchases if a Senate amendment unveiled Thursday makes it into law. As it stands now, homebuyers must have signed contracts by April 30 and must close the deal by June 30. They could be eligible for an $8,000 tax credit if they are first-time buyers or a $6,500 credit if they owned and lived in their previous home for five of the last eight years. The closing deadline, however, could be pushed back to Sept. 30 under an amendment offered by Senate Majority Leader Harry Reid, D-Nev., Sen. Johnny Isakson, R-Ga., and Sen. Chris Dodd, D-Conn. The senators said they want to make sure banks have time to process the transactions, especially short-sales, which is a more involved process. “By extending the transaction deadline, we can ensure that everyone taking advantage of this credit can complete the purchase of their new home, Reid said. It remains to be seen, however, whether the amendment will go anywhere. It’s part of a controversial jobs and tax bill that may be radically changed before the Senate approves it. Lawmakers are not scheduled to vote on the bill until next week at the earliest. Source: CNNMoney.com
Builders, designers, and architects say now is a great time to build a new custom home or remodel an existing one. Not only are there plenty of unemployed and under-employed workers available, but also property is for sale at bargain prices and construction materials are at bargain levels. “It makes a lot of sense right now,” said Stephen Melman, director of economic services for the National Association of Home Builders. “People are available to do the work. They are going to bid competitively so I’m sure that will drive the price down.” The only problem could be financing, which can be hard to arrange. Source: Investor’s Business Daily
The vast majority of potential home buyers – 87 percent – plan to use a Federal Housing Administration home loan to finance their purchases, according to a new survey from the Home Buying Institute, a consulting service. In a survey of 12,000 home shoppers consisting of two-thirds first-time buyers, nearly 54 percent said they preferred an FHA loan because it requires a small down payment. The remainder chose an FHA loan for these reasons: 19.2 percent thought the qualification process would be easier; 13.5 percent said they didn’t think they could qualify for a conventional loan; 7.7 percent said they had bad credit; 5.8 percent said their income was too low to qualify for a conventional loan. Source: Home Buying Institute
On Your Team,
Kurt M. Galitski
The Kurt Real Estate Goup
Vice President, Weichman Associates- Realtors
877-957-6677
Ca. Broker #1348644
Whether you’re looking for your dream home or a bargain in a Costa Mesa Foreclosure, REO, Short Sale, Distressed Property, or a new vacation home in one of the many coastal / beach cites such as Newport Beach, Huntington Beach, and Laguna Beach or simply dreaming of a new home in Orange County California, KurtRealEstate.com has it all!
In addition to his work in real estate, Kurt has earned a reputation as an active member of his Costa Mesa community. In addition to serving as chairman of Costa Mesa’s Parks and Recreation and a liaison to the Newport School Board, he is a board member of Costa Mesa United and the Costa Mesa Youth Sports Council, and a member of the Tewinkle Sports Facilities Master Plan Committee.
With an industry known for its proverbial ups and downs, Costa Mesa real estate professional Kurt Galitski offers his clients a constant level of exceptional service: he stays abreast of changes and trends, seeks out opportunities, and makes it a priority to give his customers nothing less than the highest quality of care. He’s living the good life, and Kurt’s mission is to help others do the same. Contact Him Today
