Market Update

QUOTE OF THE WEEK... "It is always wise to look ahead, but difficult to look further than you can see." --Winston Churchill INFO THAT HITS US WHERE WE LIVE... Keeping Sir Winston's words in mind, let's consider some prognostications coming out now about the real estate market in 2014. A national online listing site sees housing becoming a little less affordable and repeat buyers emerging as the market's dominant players. The site's chief economist explained, "repeat buyers will be able to offset the higher price of the home they buy with the higher price from the home they sell." This expert also sees mortgage rates creeping up, although he feels that should make the mortgage process easier, as lenders shift resources from refinancings to purchase loans. Freddie Mac's chief economist revealed that "single family mortgage debt outstanding increased for the first time since 2008." He further explained: "This is a positive sign, as it reflects that the pick-up in new purchase-money originations has offset loan paydowns and led to a net increase in principal outstanding." The Mortgage Bankers Association chimed in with a report that purchase loan applications were up a seasonally adjusted 1% for the week ending December 6, compared to a week earlier. BUSINESS TIP OF THE WEEK... Despite the popularity of videos and social media, e-newsletters remain very useful marketing tools. Use your Facebook page and website to get sign-ups by offering freebies containing useful information. Review of Last Week FED FEARS STALL SANTA... Anyone hoping for an end-of-the-year Santa Claus rally to begin early had those hopes dashed last week, as Wall Street investors sent stock prices down, fearing the Fed will start tapering its bond buying program at this week's FOMC meeting. The Dow and S&P 500 sailed south for the second week in a row, and this time they were joined by the tech-heavy Nasdaq. There wasn't a lot of economic news, so traders were free to obsess over the coming Fed meeting. Now, a growing number of investors and economists think the central bank will announce the beginning of tapering on Wednesday. In addition to sending stock prices up, the extra money the Fed has been pouring into the economy was intended to stimulate it. So tapering would be a sign our central bankers have become more confident about the recovery. Evidence to support that confidence came last week in the form of a Retail Sales Report that came in UP 0.7% for November and UP 4.7% over a year ago. This was joined by Wholesale Inventories and Business Inventories registering larger than expected build-ups. Even the monthly Federal Deficit came in lower than expected, while Core PPI wholesale prices remained within the Fed's target. The week ended with the Dow down 1.7%, to 15755; the S&P 500 down 1.6%, to 1775; and the Nasdaq down 1.5%, to 4001. Greater concerns that the Fed could announce tapering as early as this week's meeting sent bond prices skidding down. The FNMA 3.5% bond we watch ended the week down .80, to $99.24. This might have pushed mortgage rates up, but national average mortgage rates actually dipped slightlyfor the week ending December 12 in Freddie Mac's Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. DID YOU KNOW?... Realtor.com reports that more than half of all page views of listings, nationwide, now occur through a mobile device, as opposed to a desktop computer. MANUFACTURING AND HOUSING STARTS UP, INFLATION OK, BUT WILL THE FED START TO TAPER?... Manufacturing activity is forecast to continue expanding in December by both the New York Empire and Philadelphia Fed Indexes. We'll finally have Housing Starts for September and October, as well as for November, with steady growth expected. The Consumer Price Index (CPI) is predicted to show inflation well within the Fed's target range. The big focus will be on the FOMC Meeting on Wednesday. With recent improvements in some economic data, the Fed could begin tapering its $85 billion dollar a month bond buying program.

6 questions to ask before hiring a contractor - PLUS 7 tips for taking care of your tools

When you're ready to remodel, make sure you're hiring the best contractor. Here are six key questions to ask. 1. Can you itemize your bid? Some contractors like to give one total price for the project. Always ask for an itemized bid with costs for all elements of the job-demolition, framing, plumbing, electrical, materials, and such. This helps with comparing bids and lets you see options for cutting costs. If you decide not to do part of the job, it shows how much you should be credited for eliminating that work. 2. Is your bid a fixed price or an estimate? With an estimate, the final bill can wind up higher, so always ask for a fixed price bid. If the contractor hesitates because there are too many unknowns, try to get the answers. Open a wall to check the structure, or ask for more detailed design plans. If unknowns persist, ask the contractor for project specs, describing what will be done. If more work is needed later, get a mini-bid for the new items. 3. How long have you been in business here? You should hire someone who's been working in your town 5 to 10 years. They'll have a local reputation to uphold, plus a good network of subcontractors and suppliers. Avoid hiring contractors from out of the area. 4. Can you include some of your earliest clients as references? This verifies that the contractor has been in business for a while and tells you how the work stands up. 5. Who are your suppliers? Get their names and call them. Ask what customers think of the contractor, how promptly they pay their bills, and if you should hire them. 6. Can I meet the job foreman? Some contractors aren't there running the job every day. Find out who that will be and ask to meet them, ideally at a job site. This is the most important person on your team. 7 KEY TACTICS FOR MAINTAINING YOUR TOOLS Here's how to keep the tools you use in tip-top shape. 1. Clean and check hand tools. These are your screwdrivers, wrenches, hammers, pliers, levels, wire cutters, and such. After each use, wipe them with a rag and put them away. Periodically check handles for cracks and metal parts for corrosion. Repair or replace damaged tools. 2. Store tools correctly. Never leave hand tools out. They get damaged by the elements outside and pose a danger to your family indoors. Store in a tool box, tool bag, storage container, shelving unit, or on a pegboard. Hang lawn and garden tools, such as rakes and shovels, to protect them from ground moisture. 3. Keep power tools clean. Wipe them clean with a rag at the end of every job. Clean exhausts and intakes with lightly oiled cotton swabs or a rag wrapped around a thin tool. A can of compressed air is the best way to remove dirt and dust from vents and crevices. Regularly replace filters. 4. Store power tools properly. Protect them from dust, moisture, and other damage by storing in original cases, drawers, or tool chests. Keep instruction manuals in a drawer or cabinet in your workspace. 5. Inspect power tools for damage. Every so often, check for signs of wear or damage, paying special attention to power cords. If you see frayed insulation or exposed wires, have a professional repair or replace the cord immediately. Check for bent or loose prongs on plugs. Damaged power cords can give you a shock or start a fire. 6. Oil moving parts. This makes the tool run smoothly and helps prevent rust. Common machine oil works, but consult your owner's manual for manufacturer recommendations. 7. Look after batteries. Cordless tools are great, but pay attention to their rechargeable batteries. Follow manufacturer recommendations for charging and discharging. Clean contacts with cotton swabs and alcohol. Store batteries you won't be using in a clean, dry place away from heat. When you're ready for a move, we can answer any questions about financing. We can also help with refinancing your existing home or funding home improvements. Please call or email us any time. We're always here for you... Have a great day! P.S.: As the housing market recovers, mortgage rates remain at historically attractive levels, but they can be volatile. When buying or refinancing, it's smart to start the process early. Please call or email us to explore the appealing options available now.

Weekly Newsletter

Please click here to read this weeks updates to the market! Click here

Weekly update

Last Week in Review: Key housing and jobs data was released. Plus a surprising read on Gross Domestic Product, the broadest measure of economic activity. Forecast for the Week: This week's economic calendar is light, featuring readings on retail sales, jobless claims and wholesale inflation. View: See the important time tip that can make all the difference any time of year. "Tomorrow is often the busiest day of the week." Spanish Proverb. And it sure seemed that way with last week's busy economic calendar, as Friday's Jobs Report capped off a week filled with data. Here are the highlights. The highly anticipated November Jobs Report revealed that employers created 203,000 jobs last month, above the 188,000 expected. The Unemployment Rate fell to a 5-year low of 7 percent while the Labor Force Participation Rate (LFPR) managed to tick up to 63.0 percent, though it is still at lows not seen since the late 1970s. The LFPR is a measure of how many people are looking for work. All in all this was a good report, but the labor market is not out of the woods yet. Also of significance, the second reading of third quarter Gross Domestic Product (GDP) rose by 3.6 percent, above expectations and the best level in a year and a half. But a closer look shows the gains coming from a large buildup in inventories. This is important to note because a buildup in inventories could cause goods to stay on the shelf and not materialize into sales, which could set the stage for a disappointing read in the fourth quarter. In housing news, research firm CoreLogic reported that home prices, including distressed sales, rose by 12.5 percent in October 2013 compared to October 2012. This marks the twentieth month of year-over-year home price gains. In addition, New Home Sales for September fell but October's New Home Sales surged 26 percent, coming in above expectations. Both reports were delayed due to the government shutdown. What does this mean for home loan rates? Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market. The Fed has said that its decision regarding when to taper these purchases will be dependent on economic data. Whether data has been strong enough for the Fed to begin tapering these purchases after its meeting of the Federal Open Market Committee on December 17-18 remains to be seen. Either way, the timing of the Fed's decision will definitely impact home loan rates heading into 2014 and it's why economic data in the coming weeks will be important to monitor. The bottom line is that now remains a great time to consider a home purchase or refinance as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you or your clients. Forecast for the Week Economic data is light this week and doesn't kick off until Thursday. ■As usual, Thursday brings Weekly Initial Jobless Claims. Last week's claims dropped below 300,000, though this figure could have been skewed by the Thanksgiving holiday. ■Also on Thursday, Retail Sales will be delivered and will show the health of consumer spending. ■The last report this week will be the Producer Price Index on Friday, which will reveal if there are any inflation pressures at the wholesale level. 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 Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on. When you see these Bond prices moving higher, it means home loan rates are improving — and when they are moving lower, home loan rates are getting worse.