Ray Williamson

In the previous norm, when I asked a mortgage lender what the current rates were and where are we going, they would turn to the 10 year treasury bond. While not exact, it certainly did move in tandem, traditionally with a spread or difference in rate of about 1.75 So, if the 10 year treasury was trading with a yield of 4.5% then mortgage rates would be at about 6.25%. With the Fed's announcement several weeks ago that they would be purchasing 1.15 trillion in mortgage backed securities, treasuries moved down below 2.5%. The thought being that President Obama might get that 4.0% after all. But rates have been very sluggish in moving down. In fact the treasuries have moved much faster back up. Treasuries now on either side of 3.0%.

Are you still with me :) So, if we apply a traditional spread principal which says that investors would want at least 1.75% more for the risk of a homeowner defaulting on the debt versus the US government (when you think about it, is that enough of a spread?). With 3.0% treasuries, have we hit bottom in mortgage rates? The more debt the US issues the higher the risk and therefore the higher the yield should be, so naturally mortgage rates would follow in lock step if not race ahead. After all mortgages have to be riskier, right?

I could foresee a complete government intervention in the mortgage market, setting rates artificially low to reach the magic 4% number. But, it doesn't seem like that is currently in the cards and market forces have to take hold soon. So for those of you waiting for the 4%, is it worth the risk?

We did it again! Reward Builders and Dream Living Realty have made another family's dreams come true in Cary, NC. Our latest clients "traded" their home in the Park at Westlake community for one of Reward Builder's new homes in Highcroft Village. This is the second home that Reward Builders has taken on trade this year. Stay tuned to the blog later in the week as we post this great resale home in the highly desirable Park at Westlake community for sale. That's right... Reward is coming in and freshening up the house and putting it right back on the market at a great price.

If you are looking to find out more about the trade program, just email me our check out our website at http://www.DreamLivingNewHomes.com/gold_customform3.asp

Bear with me, as I spread a little propaganda here.

With the launch of Dream Living Realty we are also launching two new websites. The first is now live and already providing over 350 people with exceptional experience searching homes on the local MLS. The site is http://www.SearchTriangleMLS.comthis site is designed and managed by a leading provider of IDX solutions for brokerages. So far the feedback we have received from home hunters has been very positive.

And later this month we will be launching http://www.DreamLiving.tvYes, dot.tv Forget 360 virtual tours and welcome to the new way of touring homes. Video tours of homes will be displayed on channels specializing in the types of homes consumers are looking for. The First Time Homebuyers will enjoy tours of homes that meet their needs and budgets, while the bargain shoppers can check out the latest foreclosures as they hit the market. They will even be new homes featured on the site, including tours of model homes and new communities. Additional channels will be added shortly after launch to include luxury homes, downtown condos/lofts/rehabs and even a For Sale By Owner channel.

There is no doubt that real estate is a slowing market and it requires quick adpatation to the changing times to succeed.

Is now the time to buy? I say maybe. Sure rates are low and they are certainly moving lower, that's a good reason to buy. Prices have come off their highs but are likely going to continue moving lower, maybe not the best buy indicator. But, here's the thing, if you are a buyer looking to buy a home what is more important? Finding the house the meets your requirements or just getting the best deal and terms possible at the absolute low point of the market?

Yes, spoken like a good salesperson, right? Well, we need to find a way to convey this message properly as real estate professionals because we are hired to advise our clients and negotiate the best deal on the house that meets their requirements. All of our clients should be actively looking at homes now, getting daily alerts of new home coming onto the market. They should even go see them with their agent so that agent can get a better idea of what homes fit their needs and wants. If they find the right home, then buy it! Negotiate on price and terms, let the Realtor do their job. If their efforts do not yield a deal that is fair or better than fair to the buyer in this market, then move on to the next home that is perfect for you.

Buyers need to be looking at this as a place they are going to live for a longer period of time than in the past. This home is not going to the piggy bank t once was. A good agent will be able to teach them how to make money in real estate in other ways than solely in their primary residence. Which brings me to investors. I'm so glad to see the professional investors back in the market. A good sign for sure. Not the I wanna buy homes with no money down and paint 'em and flip them for 50% more money. Investors need to know how much capital is required and is my return good enough to justify the investment. That simple. If I put 25K into a house, including down payment and repairs, can I rent for a year and return 15-20% + on my investment. Or better yet, return 35% in a year's time in a lease purchase arrangement? When an investor asks the right questions, I get excited!

Is real estate a good investment? Have you checked the buy and hold strategy on Wall Street lately?