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Crazy week last week, global markets didn't get that 'rejuvination' needed over the weekend apparently. The Dow fell as much as 800 points during today's trading before mustering up a rally to close "only down 370 points" on fears that the bailout package may have been too little too late to stem any economic downturn. Bonds of course saw the benefit as investors found the safe haven of the bond market for their dollars. Our benchmark, the 5.5% FNMA mortgage bond, traded in a 68bp range and ended up closing at $100.81 which was 56bp higher than we started the day. This what I was calling for last week as we are trending higher but not as high as we should be when all is taken into consideration. The 10 yr T closed out the day up 110bp so there is still a bias to the "safer" government insured money. But as we all know, as of a few weeks ago with the Fed take over of Fannie and Freddie, that's in essence what our mortgage backed securities are anyway. So the yield is higher on mortgage bonds but investors are still hung on the "safety" of t-bills. This, as it has to, will prove only an initial reaction to the volatility and at some point the demand for mortgage bonds is going to be driven up, along with price, which will push rates down.
The Dow lcosed at 9,955 (down 370) for the first time in 4 years. The nasdaq followed suit and plunged 84 points to close at 1,862 and the broader S&P slimmed down by 42 points to close at 1,056. Fed meeting minutes are out tomorrow, so expect a little activity there but otherwise this is a quiet week in economic reporting so it's going to be mainly technical movement and the economy is down almost 1 million jobs, stocks are plunging, and it's bleak economically speaking in the short run. But!......
This is good news, as bad as everything else may seem to you right now, considering a drop in rates is going to, BY DEFAULT, make houses cheaper for buyers at the same sales price they currently are listed at. Meaning sellers will derive their needed benefit of a higher sales price and buyers will get the same monthly payment. I cannot stress enough how much the housing industry needs lower rates. We're still at, historically speaking, very low rates. But a market like the one we're in, globally, not locally, is going to need something to kick it in the rear to get things moving again. Housing markets are the best medicine my friends because as I can attest, and many of you as well, when you buy a home that's not where it ends. There are many trips to the local hardware store if my wife is involved.....so that's spending and that's consumer spending in more than one area. That multiplied by all the home buyers that this lower rate environment can create equals economic recovery so don't underestimate what you do as Realtors and what I do in the financing side. It's vital to our economy and that's the bottom line.
Call me, lets stimulate the economy, it'll be fun and we'll make sure to take all the credit on the other side of this when we can laugh about it all and talk about "08' when things were so bad..." This is when careers are made so keep plugging away.
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Over the weekend I watched probably 10 games on TV. Baseball, college football and NFL and I noticed that all the stadiums were packed with 40,000 to 80,000 fans each. Obviously the word that we're in a recession hasn't reached these people yet.
I love it!
Terry Edwards in sunny SC
FeaturedColumbiaHomes.com
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Columbia SC Real Estate, Market Report September 2008

| Home Sales Report | |
| Sold Residential Listings |
| 9/01/2008 - 9/30/2008 | ||
| Area(s) = 3, 4, 5, 6, 7, 8, 9, 15 | ||
| Price Class | 0-2 Bedrm | 3 Bedrm | 4+ Bedrm | SF Total | 0-1 Bedrm | 2 Bedrm | 3+ Bedrm | Condo Total | Total Units |
|---|---|---|---|---|---|---|---|---|---|
| Price Class | 0-2 Bedrm | 3 Bedrm | 4+ Bedrm | SF Total | 0-1 Bedrm | 2 Bedrm | 3+ Bedrm | Condo Total | Total Units |
| 29,999 or Under | 3 | 3 | 0 | 6 | 0 | 1 | 0 | 1 | 7 |
| 30,000 - 39,999 | 0 | 5 | 0 | 5 | 0 | 3 | 1 | 4 | 9 |
| 40,000 - 49,999 | 1 | 3 | 0 | 4 | 0 | 0 | 0 | 0 | 4 |
| 50,000 - 59,999 | 2 | 10 | 0 | 12 | 0 | 0 | 0 | 0 | 12 |
| 60,000 - 69,999 | 0 | 3 | 2 | 5 | 0 | 0 | 0 | 0 | 5 |
| 70,000 - 79,999 | 3 | 4 | 1 | 8 | 1 | 0 | 0 | 1 | 9 |
| 80,000 - 89,999 | 4 | 8 | 1 | 13 | 1 | 3 | 0 | 4 | 17 |
| 90,000 - 99,999 | 3 | 8 | 3 | 14 | 0 | 1 | 0 | 1 | 15 |
| 100,000 - 119,999 | 2 | 19 | 3 | 24 | 0 | 1 | 0 | 1 | 25 |
| 120,000 - 139,999 | 4 | 37 | 8 | 49 | 0 | 0 | 0 | 0 | 49 |
| 140,000 - 159,999 | 3 | 24 | 16 | 43 | 0 | 0 | 0 | 0 | 43 |
| 160,000 - 179,999 | 1 | 14 | 11 | 26 | 0 | 0 | 0 | 0 | 26 |
| 180,000 - 199,999 | 2 | 6 | 6 | 14 | 0 | 0 | 0 | 0 | 14 |
| 200,000 - 249,999 | 4 | 13 | 17 | 34 | 0 | 1 | 0 | 1 | 35 |
| 250,000 - 299,999 | 0 | 6 | 12 | 18 | 0 | 0 | 2 | 2 | 20 |
| 300,000 - 399,999 | 0 | 2 | 14 | 16 | 0 | 2 | 1 | 3 | 19 |
| 400,000 - 499,999 | 0 | 1 | 5 | 6 | 0 | 0 | 0 | 0 | 6 |
| 500,000 - 749,999 | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 1 |
| 750,000 - 999,999 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 1,000,000 and Over | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Units: | 32 | 166 | 100 | 298 | 2 | 12 | 4 | 18 | 316 |
| Total $: (x1000) | 3718 | 22492 | 22205 | 48415 | 161 | 1460 | 942 | 2564 | 50979 |
| Median $: (x1000) | 99 | 130 | 199 | 145 | 80 | 88 | 294 | 88 | 135157 |
| Average $: (x1000) | 116 | 135 | 222 | 162 | 80 | 121 | 235 | 142 | 164450 |
| Days on Market | SF | Condo | Res Total | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Days on Market | SF | Condo | Res Total | ||||||
| 0 - 30 | 109 | 7 | 116 | ||||||
| 31 - 60 | 47 | 2 | 49 | ||||||
| 61 - 90 | 51 | 2 | 53 | ||||||
| 91 - 120 | 26 | 1 | 27 | ||||||
| 121+ | 68 | 6 | 74 |
| Financing | SF | Condo | Res Total | ||
|---|---|---|---|---|---|
| Financing | SF | Condo | Res Total | ||
| Assume | 0 | 0 | 0 | ||
| Cash | 26 | 3 | 29 | ||
| CONV | 122 | 14 | 136 | ||
| FHA | 102 | 0 | 102 | ||
| FLB | 0 | 0 | 0 | ||
| FMHA/RECD | 0 | 0 | 0 | ||
| Land Contract | 0 | 0 | 0 | ||
| Lease/Purchase | 0 | 0 | 0 | ||
| Other | 3 | 0 | 3 | ||
| Owner Financed | 0 | 0 | 0 | ||
| SHA | 2 | 0 | 2 | ||
| TRADE/EXCH | 0 | 0 | 0 | ||
| VA | 46 | 1 | 47 |
| Home Sales Report | |
| Current Active Listings |
| Price Class | 0-2 Bedrm | 3 Bedrm | 4+ Bedrm | SF Total | 0-1 Bedrm | 2 Bedrm | 3+ Bedrm | Condo Total | Total Units |
|---|---|---|---|---|---|---|---|---|---|
| Price Class | 0-2 Bedrm | 3 Bedrm | 4+ Bedrm | SF Total | 0-1 Bedrm | 2 Bedrm | 3+ Bedrm | Condo Total | Total Units |
| 29,999 or Under | 9 | 11 | 0 | 20 | 0 | 1 | 0 | 1 | 21 |
| 30,000 - 39,999 | 9 | 8 | 2 | 19 | 2 | 14 | 0 | 16 | 35 |
| 40,000 - 49,999 | 11 | 19 | 3 | 33 | 3 | 11 | 2 | 16 | 49 |
| 50,000 - 59,999 | 7 | 29 | 4 | 40 | 0 | 4 | 0 | 4 | 44 |
| 60,000 - 69,999 | 8 | 45 | 10 | 63 | 0 | 1 | 0 | 1 | 64 |
| 70,000 - 79,999 | 10 | 42 | 6 | 58 | 0 | 6 | 0 | 6 | 64 |
| 80,000 - 89,999 | 14 | 54 | 12 | 80 | 1 | 8 | 4 | 13 | 93 |
| 90,000 - 99,999 | 24 | 43 | 6 | 73 | 3 | 8 | 3 | 14 | 87 |
| 100,000 - 119,999 | 33 | 139 | 19 | 191 | 5 | 7 | 2 | 14 | 205 |
| 120,000 - 139,999 | 20 | 223 | 51 | 294 | 6 | 12 | 2 | 20 | 314 |
| 140,000 - 159,999 | 19 | 168 | 84 | 271 | 2 | 12 | 4 | 18 | 289 |
| 160,000 - 179,999 | 9 | 131 | 94 | 234 | 0 | 2 | 2 | 4 | 238 |
| 180,000 - 199,999 | 6 | 112 | 66 | 184 | 14 | 3 | 8 | 25 | 209 |
| 200,000 - 249,999 | 27 | 160 | 132 | 319 | 7 | 17 | 0 | 24 | 343 |
| 250,000 - 299,999 | 8 | 75 | 99 | 182 | 7 | 30 | 4 | 41 | 223 |
| 300,000 - 399,999 | 2 | 71 | 133 | 206 | 11 | 25 | 3 | 39 | 245 |
| 400,000 - 499,999 | 0 | 25 | 116 | 141 | 1 | 5 | 7 | 13 | 154 |
| 500,000 - 749,999 | 7 | 19 | 97 | 123 | 0 | 3 | 5 | 8 | 131 |
| 750,000 - 999,999 | 1 | 3 | 43 | 47 | 0 | 1 | 11 | 12 | 59 |
| 1,000,000 and Over | 0 | 2 | 30 | 32 | 0 | 0 | 6 | 6 | 38 |
| Total Units: | 224 | 1379 | 1007 | 2610 | 62 | 170 | 63 | 295 | 2905 |
| Total $: (x1000) | 32201 | 242593 | 354475 | 629270 | 12868 | 34296 | 28406 | 75571 | 704841 |
| Median $: (x1000) | 107 | 149 | 259 | 175 | 189 | 172 | 306 | 198 | 179000 |
| Average $: (x1000) | 143 | 175 | 352 | 241 | 207 | 201 | 450 | 256 | 245913 |
Information Herein Deemed Reliable, but Not Guaranteed. © 2008 by CMLS 10/6/2008 8:57:36 AM
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First the wrap up on the week, then the move forward ideas and suggestions.
Our benchmark FNMA 5.5% mortgage bond was in the red most of the day before recovering losses late in the session to move 6bp higher to close at $100.25. Mortgage bonds moved lower and stocks higher initially following a worse than forecast Jobs Report. Payrolls in September were worse than forecast with a loss of 159,000 jobs vs. the estimated loss of 104,000. That makes 9 consecutive month of job losses. Investors had been expecting an even worse number and the bad jobs data made it more likely the $700 billion bailout bill would be passed today so the equity markets were viewing this as a positive. It was a case of 'buy the rumor, sell the news' as the stock market traded substantially higher leading up to the House vote then hit a U-turn after the House passed the measure by a final vote of 263-171. The Dow, up more than 300 points prior to passage, gave up all of its gains and fell another 157 points to close at 10,325. The NASDAQ Composite Index shed 29 points to close at 1,947 while the broader S&P 500 Index lost 15 points to end at 1,099. Ahead of bill's passage, investors purchased as prices increased and then jumped into profit taking mode post passage and this is somewhat disturbing as all rallies are sold into to lock in quick gains. This signals that the consensus amount the big investors is that the economy still faces significant challenges due to the credit freeze and job losses. Job losses have been increasing at an accelerated pace over the past nine months indicating a recession could linger longer and be deeper than originally thought. At least overnight dollar LIBOR loans fell below the Fed's 2.00% target rate for the first time since Sept. 14, 2007 by dropping to 1.996%. However, longer duration LIBOR rates still show the credit markets remain frozen as banks pretty much refuse to lend to one another for longer than a day due to concerns the banks they may lend to might fail. This past week alone, six banks scattered throughout Europe and the U.S. required government help to keep them from failing. The Libor-OIS spread, a measure of cash available for loans among banks, jumped to 2.84% from 2.607%, a new record. Oil closed at $93.88 nearly unchanged.
AND NOW FOR THE GOOD NEWS FOR ALL OF US THAT ARE TRUE REAL ESTATE PROFESSIONALS.
Now, more than ever, our job is not only still necessary as people will always need to buy and sell houses and will always need to finance those purchases as this is the largest investment that most people will ever make. Our role, whichever side of the transaction we're on, is on that is "boots on the ground" so speak. We're in the trenches and that means we are in direct contact with the end user, our client. Our clients inevitably will always read the papers, watch the news, listen to radio talk shows, talk to their friends and colleagues, and so forth that are perpetuating misinformation, disinformation, and injecting an increased level of fear and anxiety that will make our job of actually closing that sale all the more difficult. The theme, if you've been reading my blog lately, has been the fact that the problem is not the product. The product itself is good. The problem is the fear and unknown that comes with making an investment that is more important than any other investment 90% of Americans will make.
That means your job as a Realtor is not to sell a house. Not at all is that what you are out to do. Houses sell themselves to their suitable buyer. My job is not to sell an interest rate, interest rates are not something that I have control over. Your job is to sell an idea and to sell a belief that this house, this particular house, is the one that is right for your clients family. That this very house is not going to lose value and put them in the position that they see people in on the front page of the paper or on the nightly news. My job is to ensure them that I am utilizing the tools at my disposal to properly advise them to make sure that their house works for them the way that it should as an asset. To show them how structure, not rate, and how fees, not product, are the tools and the costs that need consideration in the moment of purchasing a home and how a game plan for post closing is more important than anything we work on prior to the closing table. It's the relationship and trust that we're so obligated to work on. Not the sale. The actual sale itself is the most insignificant part of the transaction. If you do your job, and I do mine, prior to the sale, the sale is a byproduct of our work, not the objective.
I enjoy what I do and that pays dividends in the form of my borrowers enjoy working with me. When everything is explained and the process takes on the transparency that it requires, the fear and anxiety is eliminated. When the anxiety and fear is eliminated, the process of closing on the purchase of a new home is a refreshing process for all involved and that perpetuates my business and the business of my Realtor partners regardless of the economic conditions and housing bubbles and credit crunches and whatever other hot button buzz words you want to tag it with. The same is true for all of you agents and attorneys, and financial planners, and so forth. Building your base of business on relationships and not volume and income objectives is sustainable and ends up taking care of the volume and income by default. Call me if you want to, I'm happy to help when I can.
Take care and go sell some houses!
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I have been fortunate enough to launch my real estate career by helping several first time home buyers and Columbia SC relocation clients. Both to these types of clients usually ask....
What's the first step in buying a home or Who should home buyers call first for help in buying a home?
With today's post, I would like to address another common question.
What are the current mortgage interest rates?
If you ask any real estate or mortgage professional that is worth their weight in silver, they can give you an accurate estimate of today's 30-year Fixed Interest Rate. However, questioners should also ask about the fine print that is attached to those rates.
For example, here's a section of this morning mortgage flyer...
|
Loan Type |
Rate |
APR |
|
40 Year Fixed |
6.750 |
6.990 |
|
30 Year Fixed |
6.000 |
6.270 |
|
No Fee Mortgage PLUS, 30 Yr. Fxd. |
7.375 |
7.480 |
|
15 Year Fixed |
6.000 |
6.250 |
|
30 Year Fixed, Jumbo |
7.750 |
7.880 |
|
15 Year Fixed, Jumbo |
7.000 |
7.300 |
|
5/1ARM |
5.875 |
6.270 |
|
5/1ARM, Jumbo |
8.125 |
7.090 |
|
5/1ARM Interest Only |
6.125 |
6.370 |
|
5/1ARM Interest Only, Jumbo |
8.125 |
7.020 |
It's very common to hear someone answer the INTEREST RATE question by saying..........
Today's interest rate on a 30-Year Fixed Mortgage is 6%.
However, it's important to get all the information that's related to an interest rate quote.
For example, this is what was at the bottom the aforementioned interest rate flyer................
"These rates are assuming a 680 credit score, at least 5% down, and a loan amount of at least $100,000."
Translation..........If you don't have a 680 credit score and the ability to make about a $5200 downpayment, that 6% interest rate might not apply to you.
Plus, you haven't asked about ORIGINATION FEES and other costs for borrowing the money (aka APR).
Before you make a positive or negative judgment on any interest rate quote, GET ALL THE FACTS and that would include a Good Faith Estimate.
If you are buying a home for the long term, ANYTIME IS A GREAT TIME TO BUY a home! However, educated buyers make better decisions. Hire real estate and mortgage professionals that will educate you about the process. You'll be better for it!
Happy House Hunting!
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