Wednesday, February 22, 2012

Market Update


I want to thank Josh Hay at US Bank for sending these updates to me.  I find it interesting that the chief economist at the Nation Association of Realtors is considering changing the way they analyze their data.  I wonder what has spurred them into this decision...
MARKET COMMENT
Mortgage bond prices were slightly lower last week, which pushed mortgage interest rates higher. Rates were positive the beginning of the week following weaker than expected retail sales data but rose sharply following unfriendly data Thursday. Lower than expected weekly jobless claims started the negative trend. The figure was the lowest since 2008. A surge in the core producer price index also added pressure to rates. The core rose 0.4% in comparison to the expected 0.2% increase. Fortunately the core consumer price index was in line with expectations, which kept the rate increases in check. Debt trouble in Europe continued to dominate headline news, which also helped. Mortgage bonds ended the week worse by 1/8 of a discount point despite the volatility.

LOOKING AHEAD
Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis
2-year Treasury Note AuctionTuesday,
Feb. 21,
1:15 pm, et
NoneImportant. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Existing Home SalesWednesday,
Feb. 22,
10:00 am, et
4.58mLow importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
5-year Treasury Note AuctionWednesday,
Feb. 22,
1:15 pm, et
NoneImportant. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless ClaimsThursday,
Feb. 23,
8:30 am, et
345kImportant. An indication of employment. Higher claims may result in lower rates.
7-year Treasury Note AuctionThursday,
Feb. 23,
1:15 pm, et
NoneImportant. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
U of Michigan Consumer SentimentFriday,
Feb. 24,
10:00 am, et
72Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
New Home SalesFriday,
Feb. 24,
10:00 am, et
295kImportant. An indication of economic strength and credit demand. Weakness may lead to lower rates.
EXISTING HOME SALES
The National Association of Realtors releases existing home sales data near the end of each month. The data is derived from a sampling of MLS data across the nation. The release shows the current sales rate for existing single-family, coops, and condos. A national figure and 4 regional figures are provided. The NAR Chief Economist indicated in February the current methodology used to calculate the benchmarks will be revised in the near future. There is no timetable for the revision.
The housing market is a critical component of the US economy. A house is usually one of the largest assets a consumer owns. Housing usually leads market recoveries. Unfortunately the housing industry remains in transition as the effects of massive foreclosures still weigh heavily. Most analysts agree that the housing market will remain wobbly for some time. The important thing to remember is that housing is a “local” issue. The maxim about housing being strongly tied to “location, location, location” still holds true. The overall housing market shows signs of trouble while there are areas that don't follow the overall trend.
While the data usually isn't a big market mover it still has the potential to result in some market volatility. The release usually includes remarks from the Chief Economist regarding prices, inventory, and interest rates.
RATE LINK is provided by Market Information for Mortgage Professionals. Copyright 2012. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.
CONFIDENTIALITY NOTICE: This e-mail transmission and any attachments may contain confidential or legally privileged information. This information is intended only for the necessary business use of the individual(s) or entity to whom it is intended even if addressed incorrectly. If you have received this e-mail in error, please immediately notify the sender by e-mail at the address shown. You should delete this entire transmission from your files if you are not the intended recipient and you are prohibited from retaining, distributing, disclosing or using any information contained herein. Thank you for your compliance.


1. intenseproductions.blogspot.com

Real Estate Listings in Hardin & Meade County


I can't tell you how many times I have come across this.  Whether it was for our personal search for a home, or while I was out appraising, I have seen more than my share of homes that do not match their listing description.

The most recent was a home I was appraising in Radcliff, KY.  The MLS description said it was an updated three bedroom home with a large lot.  When I got to the property, the only resemblance of a third bedroom was an entertainment room with a wet bar.  Unbelievable.  They wondered where the value went when I used two bedroom homes as comparable sales.

Here is a great article on this topic from bankrate.com.

http://www.bankrate.com/finance/real-estate/lying-listings-fool-more-homebuyers-1.aspx

Saturday, February 18, 2012

Discounts and Offers

I want to thank all of you who have liked this website and use it on a regular basis.  I also would like to let you all know that our Facebook fan page has a new feature: Discounts and Offers!!  Just go to our fan page, click on the Offers tab, print the offer, or share it with friends or family, it's that easy!  Check back from time to time because the offers will be changing.  Thanks again for supporting Bluegrass Valuation Services, and have a good week!

Wednesday, February 15, 2012

Market Update

1.
Before I head out the door to appraise a property in Meade County, I wanted to share this with you all.  The S&P have been in the news a lot lately, but here is another instance of foreign events effecting our market.  Thank you Josh Hay at US Bank for another market update.  
MARKET COMMENT
Mortgage bond prices were only slightly higher last week which kept mortgage interest rates in check. The Greek debt restructuring talks dominated trading. Greece was pushed to enact austerity measures in an effort to restructure their current debt and avoid default but those talks stalled without any action and default fears continued as of late Friday. Lower than expected weekly jobless claims resulted in a spike in rates Thursday morning. Weaker than expected consumer sentiment data, considerably weaker stocks, and news that the S&P downgraded several Italian banks Friday helped bond prices recover. Mortgage bonds ended the week unchanged to better by 1/8 of a discount point.
LOOKING AHEAD
Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis
Retail SalesTuesday,
Feb. 14,
8:30 am, et
Up 0.1%Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
Industrial ProductionWednesday,
Feb. 15,
9:15 am, et
Up 0.2%Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity UtilizationWednesday,
Feb. 15,
9:15 am, et
77.9%Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates.
Fed MinutesWednesday,
Feb. 15,
2:00 pm, et
NoneImportant. Details of the last Fed meeting will be thoroughly analyzed.
Weekly Jobless ClaimsThursday,
Feb. 16,
8:30 am, et
355kImportant. An indication of employment. Higher claims may result in lower rates.
Housing StartsThursday,
Feb. 16,
8:30 am, et
640kImportant. A measure of housing sector strength. Weakness may lead to lower rates.
Producer Price IndexThursday,
Feb. 16,
8:30 am, et
Up 0.2%,
Core up 0.2%
Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Philadelphia Fed SurveyThursday,
Feb. 16,
10:00 am, et
6.9Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Consumer Price IndexFriday,
Feb. 17,
8:30 am, et
Up 0.3%,
Core up 0.2%
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Leading Economic IndicatorsFriday,
Feb. 17,
10:00 am, et
Up 0.3%Important. An indication of future economic activity. A smaller increase may lead to lower rates.
FUNDAMENTAL WEEK
The abundance of fundamental data this week provides a good opportunity for mortgages to improve. If the data shows weakness in the economy with little or no inflationary pressures then it is possible for mortgage bonds to rally resulting in mortgage interest rate decreases. However, if the data shows that the economy continues to rebound or any significant signs of inflation, mortgage bonds may fall pushing mortgage interest rates higher.
Mortgage interest rates remain historically favorable despite some recent increases. Now is a great time to avoid the uncertainty surrounding continued market volatility. Remember, the future is uncertain with so much global economic instability. Euro troubles have helped rates here at home. Any signs of stability in that region could reverse the flight to quality buying of US debt that has helped rates stay low. Caution is key.
RATE LINK is provided by Market Information for Mortgage Professionals. Copyright 2012. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.
CONFIDENTIALITY NOTICE: This e-mail transmission and any attachments may contain confidential or legally privileged information. This information is intended only for the necessary business use of the individual(s) or entity to whom it is intended even if addressed incorrectly. If you have received this e-mail in error, please immediately notify the sender by e-mail at the address shown. You should delete this entire transmission from your files if you are not the intended recipient and you are prohibited from retaining, distributing, disclosing or using any information contained herein. Thank you for your compliance.

1. thedigeratilife.com

Tuesday, February 14, 2012

No appraisal needed for rural refinancing

1.

    Last week I wrote an article on appraising in the country, and I thought this pilot program from the USDA is a good follow up. The program started at the beginning of the month, and it is for selected states. Check out the following link if you would like more information on lowering your interest rate if you live in the country. 



Friday, February 10, 2012

Appraising in the country




This has been a very interesting week of appraising.  I had two assignments in the Jefferson county area, but I had four spread out between the rural areas of Hardin, Meade, and Grayson counties.  Appraising in the rural parts of Central Kentucky is different than the suburban areas.  There is usually a lot more driving, less MLS coverage, and better views. 


When assignments take me to the country, I keep the following situations in the back of my mind:
1. Is there a trend for surplus land values?
2. What areas can I use for comparable sales?
3. Will I have to go to the Sherriff Department, Clerk’s Office, Assessor’s Office, or non-MLS Realtors for data?

The last assignment I had took me to Nolin Lake in southern Grayson County.  I enjoy Grayson County because it is between two man-made lakes: Rough River and Nolin.  This assignment was challenging due to multiple lots and lake-frontage being an issue.  All turned out well, fortunately I keep a running matrix of adjustments for the lakes in the area and golf courses. 

In closing, let me leave you with some reminders about the going to the country.  Watch out for deer, always be aware of where the next bathroom is, and make sure the courthouse is going to be open!

Monday, February 6, 2012

Discounts and offers

I want to thank all of you who have liked this website and use it on a regular basis.  I also would like to let you all know that our Facebook fan page has a new feature: Discounts and Offers!!  Just go to our fan page, click on the Offers tab, print the offer, or share it with friends or family, it's that easy!  Check back from time to time because the offers will be changing.  Thanks again for supporting Bluegrass Valuation Services, and have a good week!

Market Update

Today finds me heading to Bullitt County for an appraisal, but I wanted to share this with you all before heading out the door.  Keep in mind that we are in a global economy, and we have been for several hundred years.  Thanks again to Josh Hay and US Bank for providing this market update.


MARKET COMMENT
Mortgage bond prices were only slightly higher last week, which kept mortgage interest rates in check. There were rate improvements throughout the middle of the week tied to weaker than expected ADP employment figures. Unfortunately, a lot of those gains were erased Friday morning with the release of the employment report. Unemployment came in @ 8.3% which was better than the expected 8.5% mark. Payrolls increased 243k, which was considerably stronger than the expected 155k increase. Stocks rallied and MBS prices fell as a result. Mortgage bonds ended the week unchanged to better by 1/8 of a discount point despite the strong negative movement Friday.
LOOKING AHEAD
Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis
3-year Treasury Note AuctionTuesday,
Feb. 7,
1:15 pm, et
NoneImportant. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Consumer CreditTuesday,
Feb. 7,
3:00 pm, et
$9.56bLow importance. A significantly large increase may lead to lower mortgage interest rates.
10-year Treasury Note AuctionWednesday,
Feb. 8,
1:15 pm, et
NoneImportant. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless ClaimsThursday,
Feb. 9,
8:30 am, et
375kImportant. An indication of employment. Higher claims may result in lower rates.
30-year Treasury Bond AuctionThursday,
Feb 9,
1:15 pm, et
NoneImportant. Bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Trade DataFriday,
Feb. 10,
8:30 am, et
$45b deficitImportant. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
U of Michigan Consumer SentimentFriday,
Feb. 10,
10:00 am, et
60.5Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
AUCTIONS
US Treasury bonds do not directly dictate fixed mortgage interest rate pricing however they do have an indirect impact. Treasuries are used as a hedge for the interest rate risk associated with mortgage-backed security investing. Mortgage-backed securities have the potential for prepayment that Treasuries do not. Both Treasuries and mortgage bonds often track in the same direction but this is not always the case. There are many times that Treasuries and mortgage bonds move inversely.
Despite the overwhelming size of the US economy, foreign investors can still have an effect on moving the financial markets. When foreign economies struggle foreign investors often purchase US based investments including mortgage bonds. This demand usually causes mortgage bond prices to rise and interest rates to fall. This flight to quality buying is one of the factors helping mortgage interest rates remain historically low.
The Fed recently noted that continued global economic turmoil will be a factor in the health of the US economy. How that all plays out is still uncertain.
The Treasury auctions this week will be important in determining the current appetite of foreign investors for dollar denominated debt securities. Demand has been generally good as of late but auctions of different durations often vary in their results. Mortgage bond prices could fall pressuring mortgage interest rates higher if the auctions this week are poorly bid. The inverse is also true. Be alert heading into the auctions.