With over 90% of home buyers searching online for a new home your home must make a great first impression. The first impression is a lasting impression!  In a buyers market sellers compete with sellers.  If buyers are not impressed what they see online they will move on to the next listing. Ready, Set, Stage! works with you and your Realtor to put your home on the “must see” list for today’s home buyers. We offer a marketing plan and photos to assist with the sale of your home.

Weekly Preview

Last Week: The Treasury markets saw some slight increase in interest rates in another volatile trade. Mortgage rates were essentially unchanged. The week was marked with Treasury selling another $113B of notes and surprising jumps in existing and new home sales (+7.6% and +14.8% respectively). Two reports on consumer confidence and sentiment were a little better than a month ago, but these are less significant than hard market data as both the Conference Board’s consumer confidence report and the U. of Michigan’s consumer sentiment report are mostly emotional readings predicated on how the stock market and interest rate markets are performing. By the end of the week, after continued high market volatility, the stock market ended with not much change from the previous week. The sovereign debt problems in Europe continue to be the dominant concern in the equity markets. Fitch, the rating agency, down-graded Spain’s sovereign debt rating from AAA to AA+, adding to the angst that debt issues may become more strained.

This Week:  Expect more market volatility in the equity and interest rate markets. The stock market, based on the key indexes, is still too high given the concerns emanating from Europe and what we see as a slowdown in China’s expansion. The outward driver for US markets is captured in the movement of the euro currency; as it declines against the dollar, US stock markets will be pressured. The euro may find support at $1.20 dollars per one euro (Friday the level was $1.23). No Treasury borrowing this week; the giant this week is the May employment data on Friday (early estimates are an increase of 500K jobs with unemployment at 9.8%). Tuesday a key data point on the manufacturing sector (ISM index). Thursday it’s the ISM services sector report. Expect increased concerns that the US economy will slow based on the previous excessive bullish outlook that had rallied equity markets. No inflation and increasing concerns that the economic outlook is weakening will support low interest rates for many more months.

Market Snapshot for May 31st

Treasuries and mortgages took a beating yesterday on the very strong rally in the stock market which was fueled by relaxed sentiment over problems in Europe on comments from China it would continue investments in Europe. That was the headline; on top of that as we have been mentioning for the last few days, the stock market was technically very oversold and the bond market equally overbought. The 284 point increase in the DJIA yesterday somewhat alleviated the oversold technical outlook; the 10 yr note 9 day relative strength index increased to neutral from very overbought readings on the increase of 17 basis points in rate. Mortgages prices fell 19/32 (.59 bp) following selling in the treasury market. (This is the price for mortgage backed securities).

This morning the stock index futures at 9:00 were fractionally better, but not much; the 10 yr note at 9:00 up 13/32 at 3.32% -4 bp and mortgage prices +7/32 (.22 bp) from yesterday’s close. At 8:30 April personal income and spending; income was as expected, up 0.4%, while spending was soft, unchanged on the month against estimates of +0.3%. It was the weakest sales data since December of 2009. While there was no immediate reaction to the report, the lack of spending likely took a little away from the stock market.

At 9:30 the DJIA opened weaker, down 30 points; still cannot follow through after a strong previous day–but the day is just beginning. The 10 yr at 9:30 +16/32 at 3.30% -6 BP and mortgage prices +9/32 (.28 bp).

At 9:45 the May Chicago purchasing managers index, data on manufacturing in the Midwest region, was expected at 60.0 from 63.8 in April, it fell to 59.7; the new orders component declined to 62.7 from 65.2, the employment component fell to 49.2 from 57.2 and the prices component dropped to 64.0 from 71.4 on lower energy prices. The softer than expected report added more declines in the stock market but not much. Any of the index readings over 50 are indications of expansion, while under 50 indicates contraction.

Finally today, and this week and this month, the U. of Michigan consumer sentiment index was forecast to be at 73.2 from 73.3 previously. The index jumped to 73.6 from 72.2 at the end of April. The expectations index increased to 68.8 from 66.5 and the 12 month outlook increased to 83 from 80. No reaction to the report as the various indexes are well contained at these levels.

This is the last day of the month, and the beginning of the first summer holiday weekend. The bond and mortgage markets will close early at 2:00 this afternoon but stocks will go the distance until 4:00. Of course Monday is Memorial Day and all US markets will be closed. Trading today has to consider that European and Asian markets will trade on Monday leaving US investors somewhat naked on Monday; that will likely influence trading today.

The very key euro currency this morning was slightly weaker, a plus for US equity markets; however, it has moved to unchanged by 10:00 this morning.

Although the equity market is lower this morning, so far it is not by much; if the equity indexes don’t get clobbered as they have after every strong rally in the past month, we would consider it a good day for stocks and add more concern about interest rates.

Think Big Work Small

Note the new Fannie Mae guideline being talked about. Basically they are saying if you get a conforming loan the lender will pull your credit report again prior to closing and ensure your credit position hasn’t changed enough for you not to qualify. All this means is you should put off any credit purchases until after the close. Better yet, put off your credit purchases until you have the cash to buy whatever it is you want. Novel concept, that!

Love the Rosedale Market, the owners are really cool, they treat everyone really well. The upgrades to the store reflect the neighborhood, it’s cozy, well stocked, friendly and convenient! Way to go Ken and Carol!! (Eric too!)

Rosedale Market is the best small town hangout ever! The people are friendly and love their customers. Aside from the great selection of groceries, they boast a custom deli counter and all day espresso. The small indoor/outdoor dining areas provide a home-like atmosphere perfect for anyone. Come in and be treated like family!

I found the Rosedale Market while videoing around the Rosedale area and I was greatly surprised by how good the deli was and the friendliness of the patrons and the owners. Thanks, Ken and Carol, for letting me shoot at your store!

Click here to view the embedded video.

If you have any questions about the Rosedale or Gig Harbor areas or anything at all about real estate in the area please call me at 253-225-2158 or go here.

Thanks to Parkside for their song Corner Store!

Ben Oser

Ben Oser was the 300th fan of 365 Things to Do in Gig Harbor! He wins a $20 gift card from Amazon.com. He was referred to 365 Things to Do in Gig Harbor by his lovely wife, Lacy, and she too wins a $20 gift card from Amazon.com. 365 Things to Do in Gig Harbor is a community built around Gig Harbor and also the fans of the page.

We will have more contests and ways to save money while doing what we all like to do best: Live in Gig Harbor!

For more information on how you can join the fun on 365 Things to Do in Gig Harbor or feature your business or cause, please call me at 253-225-2158 or go here.

When my wife and I moved to Gig Harbor, Rosedale was one of the first places we went to check out what we were going to do for our landscaping. They are especially noted for their dwarf evergreens, a subject in which my wife has much interest. These were plants we didn’t see in California.

Click here to view the embedded video.

If you are in need of landscaping or have some questions about Rosedale or Gig Harbor real estate, please give me a call at 253-225-2158 or go here.

Thanks to Tim Ratcliff and Ken Bailey for their song Rose!

Click here to view the embedded video.

Click here to view the embedded video.

Click here to view the embedded video.

When my wife and I moved to Gig Harbor, Rosedale was one of the first places we went to check out what we were going to do for our landscaping. They are especially noted for their dwarf evergreens, a subject in which my wife has much interest. These were plants we didn’t see in California.

Click here to view the embedded video.

If you are in need of landscaping or have some questions about Rosedale or Gig Harbor real estate, please give me a call at 253-225-2158 or go here.

Thanks to Tim Ratcliff and Ken Bailey for their song Rose!

Interest Rates at All Time Low

Recently my broker, Windermere Professional Partners, pointed to a CNBC report that said interest rates were low due to the economic crisis in Europe. I thought that was interesting given the current real estate market. Go here to get that article.

Bankrate.com, which has been keeping track of mortgage interest rates for over 25 years, notes that the current interest rate on a 30-year loan is now at 4.87%. This rate is the lowest rate ever since Bankrate.com started keeping track. Even jumbo loans which are of prime interest in Gig Harbor are at all time lows. A jumbo loan – currently defined as a loan for over $417,000 – is now listed at 4.5%, which is down from close to 6% at this time last year.

“It’s the best time in our generation to buy,” says Mark Zandi, chief economist at Moody’s. “It may be the best time in any generation. Mortgage rates are so low and with homes prices down and lots of inventory, you couldn’t pick a better time to buy ….

So a couple of questions come to mind. First, why are interest rates at an all time low, and why aren’t more people in the market to buy a house, since this is a historically great time to buy?

Why are interest rates at an all time low?

Well, we can thank Greece and the rest of the European Union for our low interest rates. Rates were already historically low even though they had been lower in the last couple of quarters of 2009. But with the danger of national debt defaults in Europe, U.S. Treasury-issued securities became the safest port for national investors like China, Japan and Canada.

This buying spree in U.S. Treasury securities caused their value to go up which in turn causes all sorts of interest rates or the cost of money or capital to go down, including mortgage interest rates. There are other factors as well – for instance, mortgage backed securities, which I’ve explained before, have also been gaining in value because the mortgages now backing those securities are less risky due to lenders (who first issue the loans) tightening up the credit requirements.

But the current impetus is definitely that the world money markets are looking at the U.S. as a safe haven again. There is even talk in Germany and France of returning to the Mark and the Franc which were their national currencies prior to joining the Euro, although not many believe this will happen. But as long as Germany mainly covers for the weaker countries in the Eurozone like Greece, Portugal and Spain, the European securities and currency will fall. This means higher prices for U.S. Treasury securities and low interest rates here.

This situation will not last and may not last through the summer for a number of reasons. The Europeans have already taken steps to guarantee loans to the poorer countries which should ease the pressure on the credit markets there. The U.S. debt continues to grow and will exert pressure on U.S. Treasury securities, making their price go down, which will in turn cause interest rates to rise. The most current projections are calling for interest rates to rise to 5.5% by the end of the summer, according to economists with the National Association of Realtors.

Why aren’t more people buying houses now?

You would think most people, especially the ones who were trying to ride out the bubble and wait for it to hit bottom before buying a house, would say now’s the time. Home prices are low and are back to pre-2005 levels. Interest rates are at an all time low. It’s a no-brainer, right?

And in April, sales of existing homes rose 7.6%, but that was due to the artificial inducement of the Tax Credit, which we also discussed here. This rise was fueled in the lowest or entry level home market. In Pierce County that would be in houses from $150,000 to $250,000 as all regions are different. Gig Harbor would be slightly higher.

Prices of homes actually rose 4%, but again, that was mainly in the entry level home market, and was probably a reaction to more demand in that market. Prices above $350,000 either remained stable or fell in the Gig Harbor market because inventories rose. Nationwide the inventory is at 8.4 months. Again, inventory is how long it would take to sell all housing at the current demand rate. For Gig Harbor in April, the inventory over all price ranges was 15 months. The National Association of Realtors rates a healthy housing market as somewhere between 3.5 and 4 months of inventory.

Click here to view the embedded video.

Yet a recent Harris survey commissioned by the National Apartment Association found that 76% of the consumers they surveyed would rather rent than own a home. 64% responded that the main reason was freedom from major maintenance and 50% voiced financial concerns as reasons they would rather rent than own.

So what is it going to take to get this housing market going? Certainly not gimmicks like the Tax Credit or buying time as with the recent loan modification program from the government. No, with 50% of the respondents saying financial concerns were keeping them from purchasing homes, it is jobs. While there have been some signs of recovery and our region is better than some, jobs will lead to more house sales and the housing market will lead the country to a full economic recovery.

What can you or I do?

In every economic depression and recession this country has ever had, the housing market has always led the recovery. But people will not invest in a home if they are losing their jobs or uncertain they will have a job.  I cannot help someone who has lost their job or is fearful of losing their job. However, if you are not in that situation, then I can help you buy a home in the best market this country has ever seen with the lowest interest rate this country has seen in a long, long time.

We can both make sure our legislators represent us and work for more job creation instead of less. We can make sure they place no impediment on the ownership of homes. In Washington, every one percent rise in the cost of purchasing a home means 13,000 fewer people can do so. We can both be active and watch for taxes raised or new taxes created which will kill jobs and harm the housing market.

Let’s work together to help our economy recover. Let me help you participate in the recovery by purchasing a home. You and I will be glad you did! If you have any questions on Gig Harbor or Pierce County real estate, please call me at 253-225-2158 or go here.