Friday, September 30, 2005

we have moved!


Thursday, September 29, 2005

High-cost housing markets score low on foreclosures

(From the Chicago Tribune)

You've probably seen the dire news reports:

American homeowners are becoming debt junkies, piling up record mortgage amounts, credit card bills, home equity credit lines. They are putting down less when they buy and borrowing a lot more.

Families in high-cost real estate markets are stretching their household budgets to the breaking point in order to buy even a modest home. Some families are devoting 40 percent to 50 percent of their monthly income just to hang on to their high-priced houses.

With interest rates certain to rise from 40-year lows, debt pressures on borrowers can only get worse, pushing some families to the brink.

Given all that gloom and doom, you'd think that homeowners' growing financial challenges would be visible in their payment performances on their mortgages. With such leadweight household debts, you'd think growing numbers of borrowers might be falling behind, paying their mortgage lenders late, and maybe even sliding toward foreclosure.

But the reverse is true...


Roberts sworn in as chief justice


John Roberts, a conservative former corporate lawyer and a counsel in the Reagan and first Bush White Houses, was sworn in Thursday as the 17th chief justice of the United States.

The swearing-in at the White House by Justice John Paul Stevens followed an overwhelming confirmation vote in the Senate, of 78 in favor to 22 against. Roberts succeeds the late Chief Justice William Rehnquist at the helm of the Supreme Court. At 50, he could lead the court for decades.

"The Senate has confirmed a man with an astute mind and a kind heart," President Bush said, praising what he called Roberts' reverence for the Constitution and personal decency.

Roberts spoke briefly and said that he took the Senate's vote as a confirmation of a "bedrock principle" for him -- that "judging is different from politics."

Senate Majority Leader Bill Frist said Roberts will be a "faithful steward" of the Constitution before casting a yes vote for the new chief justice.


3-year mortgage rates rise to highest level in 5 months


Rates on 30-year mortgages jumped this week to the highest level in five months, reflecting financial market anxieties about inflation.

Mortgage giant Freddie Mac reported Thursday that the nationwide average for 30-year, fixed-rate mortgages rose this week to 5.91 percent, up from 5.80 percent last week. It was the third consecutive weekly increase and pushed the 30-year rate to its highest level since mid-April, when it was also 5.91 percent.

The increase followed the Federal Reserve's decision last week to boost a key short-term interest rate for an 11th time as central bank policy-makers focused more on the inflationary threats of rising oil prices than risks to economic growth from Hurricanes Katrina and Rita.


Wednesday, September 28, 2005

Interest Rate Report - October


Mortgage Rates Hold Steady

Alan Greenspan must be really frightened of inflation. At every opportunity, he raises short term interest rates.

But he seems to have no effect on longer term rates, like mortgages.

Why not?


Katrina, Rita, gasoline, and the economy.

Many economists believe that higher gasoline prices will divert spending, so the economy won't grow fast enough to spur rampant inflation. Of course, gasoline costs more and that IS inflationary, but food and energy have always been volatile. It is the REST of the economy that experts look at as a gauge of inflation.

Plus, Katrina packed a wallop. Rebuilding will take resources that could cause slower growth, too.

Then there are the fundamentals that have been discussed in this space for months -- lower wage growth because of illegal immigration, shipping jobs overseas because the internet has enabled a true worldwide economy.


10 Things to Check Before You Buy a Builder House


When buying a brand new builder house, potential buyers often think they can dispense with the need for a house inspector. If it’s new, it must be in good shape, right?

Not always true.

New homes can be just as problematic as old ones. In fact, because they haven’t been tested by years of use and abuse, they can be filled with problems, especially if the builder used any shoddy practices. Hiring a qualified house inspector before you buy is a major hedge against very expensive surprises.

Then again, a house inspector can be very costly—from several hundred to a thousand dollars or more. If you ultimately end up buying the house, this is money well spent. On the other hand, if the house has serious drawbacks, you’re better off saving the cost of the inspector and moving on to a better prospect.


Consider your home an asset if you plan to keep it

(From the Chicago Tribune)

You can't take it with you. But, if you're a homeowner, you might be planning to leave a sizable chunk -- namely your home -- behind.

Live long enough to deplete your assets and require nursing care, however, and it's likely that your heirs will inherit only memories.

Many people are aware that the federal Medicaid program will pay for their nursing home expenses if they can't afford the costs themselves, but they may not realize their home may be considered an asset that must be tapped before Medicaid picks up the tab, says Barbara Stucki, a consultant to the National Council on Aging. If they were aware of the role their homes could play, they might handle their personal financial planning differently, Stucki says.

Stucki is project manager for an effort to encourage senior homeowners to take a reverse mortgage and then use the money for purposes that will help them avoid or postpone going to a nursing home, like hiring help or making improvements that enhance home safety. The effort is spearheaded by the council on aging and funded by the federal Centers for Medicare and Medicaid Services and the Robert Wood Johnson Foundation.


Reverse Mortgages are going to be more and more popular as the Baby Boomers Age. They are well worth checking out, but certainly not for everyone.

$1 million homes no longer that rare

(From the Detroit News)

Everything about Frank Fazio's new two-bedroom apartment on Manhattan's Upper West Side is decidedly average, including its price: a hair under $1 million.

For the first time, there are more than 1 million owner-occupied homes in the United States worth $1 million or more, according to a Census Bureau survey published late last month.

Once a symbol of unusual wealth, million-dollar dwellings seem like a dime a dozen in some places. San Francisco has more than 20,000 of them. There are another 46,000, or so, in Orange County, Calif.

In Manhattan, even someone with a million dollars in their pocket can't buy luxury. The average price for an apartment in all but Harlem and the borough's northern tip climbed above $1.2 million in the second quarter of 2005, said Gregory Heym, chief economist for Terra Holdings, an owner of real estate brokerages in the city.


Tuesday, September 27, 2005

New Flood Insurance Program Starts Oct. 1st


Coverage under the nation's flood insurance program will change as October 1st, a long-planned event not directly related to Hurricanes Katrina and Rita, but one that will substantially impact those most likely to be flooded in the future.

Read More HERE...

U.S. Economy: Consumer Confidence, Home Sales Plunge


U.S. consumer confidence fell by the most in 15 years after Hurricane Katrina devastated the Gulf Coast and pushed gasoline prices to a record this month.

The consumer confidence index dropped to 86.6, the lowest in two years, from 105.5 in August, the New York-based Conference Board research group said today. New home sales sold in August at the slowest pace since November, falling 9.9 percent to a 1.237 million annual rate, the Commerce Department said in Washington.


Thursday, September 01, 2005

Flooding Can't Sink the Net in Orleans


"Despite the loss of most public utilities, at least one hosting company in hurricane-battered New Orleans is still online, fighting against time and the odds to keep part of the internet humming.
Occupying the 10th floor of a downtown Big Easy office building, Zipa is a typical web-hosting and co-location center, with one key difference: It's sitting smack dab in the middle of some of the worst devastation the United States has ever experienced. "

Go on this site to read and see what is going on first hand in New Orleans from some people who are incredibly broadcasting on the net via diesel-powered generator. Amazing!

My thoughts and prayers go out to the thousands of people in New Orleans, Biloxi, etc. who have lost loved ones and their homes as they struggle to survive and attempt to rebuild their communities, homes, and lives. Donate to the Red Cross and help them if you are able.

Tuesday, August 30, 2005

Northern Michigan: Featured Property!

Chris Hardester, who is a fellow Flagstar loan officer who works out of the Shelby Township Flagstar Loan Center, forwarded me this listing of his father-in-law's cottage that just went on the market.

It overlooks Elbow Lake, which is in Harrison, just south of Houghton Lake, Michigan.
Harrison boasts "20 lakes within 20 minutes". Houghton Lake is Michigan's largest inland lake and an all-year-long destination of enjoyment for the entire family.

It's a beautiful area up there, especially in the fall when the colors change. In the summer, it's a fisherman's and golfer's paradise and in the winter it turns into snowmobile city.

This property has all knotty pine throughout. It also comes completely furnished. According to SUSAN BUSHMAN of Real Estate One in Houghton Lake, "All you have to do is bring your suitcase and toothbrush!"

Go here to see the listing.

For more information, contact:
SUSAN BUSHMAN at Real Estate One
(989) 539-4124

Chris Hardester at Flagstar Bank

Friday, August 26, 2005

Greenspan: Housing boom is an economic imbalance"


"In his sharpest warning to date about rising home prices, Federal Reserve Chairman Alan Greenspan said the housing boom is an economic imbalance that could end badly.
In his final appearance at the high-profile policy conference at the Jackson Hole resort, Greenspan said high home prices are partly due to the low risk premiums demanded by investors, which have kept interest rates low.

In recent months, Greenspan has increased the level of his rhetoric about the housing market. In May, he said he saw signs of "frothy" housing markets in some regions. He has been consistent in his judgment that there is no national housing bubble.
In July, Greenspan said he believed exotic new mortgage products, such as interest-only loans and hybrid adjustable-rate loans, were of "particular concern" because homebuyers could find themselves unable to make mortgage payments if interest rates rise.

Greenspan has said, however, that the Fed's 10 interest rate hikes in the past 14 months were not designed specifically to cool the housing market or to keep housing prices from rising."

Read the full article here...

Well, it seems the Maestro has spoken once again. To me, he seemed unusually direct in his statements today. Usually you have to go over his speaches with a thesaurus and a book on ciphers. Here he seems to be very clear in his concern for the future of interest rates and how those rates will affect homeowners. Many people continue to go with short term ARMs and Interst Only loans in order to afford more home. It seems that Greenspan feels chaos could be forthcoming if those rates after the inital period pop upward.

Greg McBride from agrees. "Concerns about deflating real estate values revolve around the prospect of millions of borrowers facing sharply higher payments in the future. Regardless of the drop in fixed mortgage rates, many adjustable-rate and interest-only borrowers are on just such a collision course. With eight, going on nine, interest rate increases in the past year, and more yet to come, the Fed may have an influence on mortgage rates and the housing market after all." Read his observations here.

I myself have been telling most people these days to go with the unexciting, vanilla 30 year fixed mortgage. No, it's not as sexy as some of these Option Arms and I/O products, but its hard to argue with long term stability, especially since rates are still so historically low. Don't get me wrong, those types of niche products certainly are going to have a place at the table for a long time to come. I sell them every day. My point is that they are not for EVERYBODY and one has to carefully weigh the pros and cons based on their OWN SITUATION before jumping in one of these. I'll try to hit upon the specific pluses and minuses of these niche products over the next few weeks.

Thursday, August 18, 2005

To Dorm or Not to Dorm. . .

When I was an under- graduate at Hillsdale College, two good friends of mine purchased a house together as sophomores. They rented out several rooms which paid for their mortgage and lived there for next to nothing for the rest of their undergraduate years. During the summers in between college semesters, they made several improvements (mostly cosmetic), and then sold the house to a younger college student when they graduated. They split a handsome profit for their efforts.

Yesterday's Boston Herald has an article about what more and more colleges are doing as they struggle to replenish diminishing incoming public funds. They are embarking on a dorm building frenzy as a way to boost their bottom lines. Dorms generate incredible revenue for colleges.

Savvy parents are realizing that interest rates are hovering still near historical lows. A house can be purchased as a second home for the student to live in while going to school that has around the same (or better!) payment than one would pay living in the dorms!

As colleges' budgets get tighter and tighter, and costs keep going up and up, this is going to remain an excellent investment for students or parents of students for a long time to come. Other students are happy to be able live off campus (and pay less than living in the dorms and way less than by renting off-campus) and by renting out rooms, the parents and students are able to lower the monthly burden of getting an education.

Meanwhile, colleges (such as Boston University and Emerson) are going to keep building dorms, as the revenue derived from room in board will remain for them one of the few ways (other than begging in the form of fund drives)they can shore up the shrinking support coming from the state and federal government. There are immense tax benefits colleges reap for this as well.

Tuesday, August 16, 2005

Detroit Market: Featured Property!

60255 Cottage Mill
Washington Twp, MI
This very custom new-construction home was built by Viva Homes. (Click on the tab that says "Viva Homes". ) On a half acre lot, with a beautiful forest view in the back, this house boasts a number of upgrades, including granite counter tops and distinctive all brick elevation. For more details, check out here. Click on "Hot New Listings".
Call Giovan Agazzi with Keller Williams to view this house or similar ones in the area today!
Call Joe Russo with Flagstar Bank for financing options.

Monday, August 15, 2005

With Condo Associations, the Fine Print is Everything

Here's a great article examing the power that condo associations can wield over what owners can and can not do to their property. Many people do not understand just how powerful condo associations are. Condo associations, for the most part, help solidfy a condo's value via rules designed to maintain the common good.
All properties are affected by the condition of the properties that surround it. A million dollar house is not going to be worth a million dollars if it is surrounded by burned out shacks. Condos are even more dependant than single family residences (houses) are on those properties in the immediate vicinity, i.e. other condos that are part of the complex. As baby boomers have ages and are facing empty nests, they are deciding to downsize and condos make an attractive choice. They have less maintenance and frequently require less upkeep. The grass gets cut, the snow gets plowed and the exterior gets painted every few years. Being part of one of the most independant generations in history, as they grow old these boomers are sure to cling to this independance. It can be a rude awakening for someone used to doing whatever they please with their properites when moving into a condo.
If you are in the market for a condo, make sure you go over the Condo Association's Master Deed and By-Laws with a fine tooth comb. Show it to a Lawyer or a Realtor for clarifications if you don't understand something. They are written in "legal-eese" and can be quite the challenge to decipher.

Friday, August 12, 2005

Don't Call it a Comeback!

Well just when things started really looking dark for the future of mortgage rates, when the price of a barrel of crude soared to a new record EVER today, the market showed exactly why those of us in the mortgage game love to say (in regards to mortgage trends), "Well, no one has a crystal ball." When mortgage rates seemed to be moving as though shackeled to fuel prices, the market throws another curve ball at us. OIL UP! RATES DOWN! Check out Bloomberg for more info. The short of it all: Rates have been up about a half percent over the last month and a half. Today they improved by about an 1/8. Best one day improvement for a while. Will they continue to slide down? Will they spike up? Stay tuned intrepid reader. Methinks the next couple of weeks will be interesting.

Wednesday, August 10, 2005

Fed Raises Rates for Tenth Straight Time

Yesterday Alan Greenspan and Co raised the Federal Funds Rate for the tenth time in a row. People ask me all the time, "Does this mean mortgage rates are going up?" The short answer is usually no. The rates the Fed sets relates to short term debt. Mortgages are considered long term debt. They are market driven based on how aggressive investors are in buying and selling mortgage backed securities. To learn about mortgage backed securities check out here.

As far as how rates were affected yesterday, they actually improved. Not so much the ARMS, but the 15 and 30 year fixed.

Yesterday I talked abou the housing bubble many have been hearing about. I wanted to share this gentleman's opinions which I found interesting. My own opinion is, yeah some markets certainly can not sustain the levels of appreciation, but the cold hard facts are that Americans are not going to stop moving to the South, West, and Southwest any time soon. Florida seems like it's getting a little silly, but the demand in areas like Vegas, Scottsdale, and St George seem like they are only just getting started. As the baby boomers age, they will drive development. They are the generation that gets what it wants and what it seems to want is Sun and temperate winters.

I love Michigan to death, but sometimes I too feel the sirens song of snow free winters. I'm a skier too (so I can enjoy the snow), but there's nothing like toes tucked in the sand at Miami Beach in February. Alas... These people may be on to something.

Monday, August 08, 2005

Is this where the bubble begins?

There has been a lot of talk lately that there may be a real estate "bubble" about to burst in hot markets. Acording to this article, it seems that the bets are on for San Diego to be the one to watch if housing prices really start to drop. In hot markets such as Denver, Phoenix, Miami, Detroit, Las Vegas, etc. people have been making thousands of dollars by exploiting good ol' supply and demand. They put modest deposits on new development projects, such as condos and then "flip" them within just a few months to someone else for a higher price. Neither does the condo exist yet in some cases, nor do they truly own anything! They are selling their place in line. That's how hot some of these areas are. Though it seems that no matter what, real estate is always a better investment than stocks or bonds, there may be something to this housing bubble thing. If you are looking for investment opportunities, my advice to you is be careful. There is always another sucker who's willing to pay more until no one is at the back of the line. People will continue to flood from the rust/corn belts to the sun/sea belts, so there is always room for quality investment. However, just like anything else, if it seems too good to be true, it probably is. Then again, look at Hawaii. From what I understand, Hawaii real estate has done nothing since it became a state but go up and up and up. Surely some of that has to do with the scarcity of land that comes from being a tropical island paradise, but still. Oh, by the way I obviously was joking about Detroit being part of the bubble. LOL. Then again, stranger things have happened.

Thursday, August 04, 2005

The Fabulous Ruins of DETROIT?

This house on the left is a really sharp "French Chateau" that's not in France at all. It is actually in Detroit. Known as the "Frank Hecker House", it is one of the lucky architectural treasures in Detroit that not only dodged the wrecking ball, but survived long enough to be renovated to to it's former glory. An excellent website (from which i snagged this picture) for glimpsing into some of Detroit's cooler historical buildings is The Fabulous Ruins of Detroit. Check it out. So much to see. If you are older, it will be a jolt to your fond memories of the Detroit of yore. If you are young, it will make you realize that once upon a time, Detroit was just IT. THE Place to be. Amazing and sad at the same time.

August Rate Outlook

I get people every day asking me what's been going on with rates. They have indeed been on an upslope for the past couple of weeks. Historically, though they are still great. The 30 year fixed seems unwilling to climb over the 6% wall and the 15 year is holding tough around 5.5%. The Arms have shown the marketable difference the past month and a half or so. With the Yield Curve flattening, there's not much appetite for banks or clients to go with an ARM these days. Only the 3 year Arm stands to be a decent way to go, but this is primarily for people who KNOW they will not be in their house for much longer than that. One of the best sites I know for explaining the myriad reasons of what is driving the real estate market in a easy to digest format is They have some interesting insights into what is going on in mortgage/real estate here. Seemingly disparate activities such as the recent decision of China to "float" their currency and the price of oil are presented in the context of how they have been affecting mortgage rates today and how they will continue to do so in the future.