Toms River, NJ

On Thursday, February 4^th, over 100 Ocean County Realtors were treated to a great breakfast followed by a lively discussion about the state of the local and national economy. A lively discussion about economics? Absolutely! The subject of economics does not have to be filled with boring statistics especially when presented by Dr. Joel Naroff.

Dr. Naroff began his presentation by proclaiming that the recession is over. He went on to say that it isn't official yet, but that in the months to come the official announcement would be made. Joel compared the beginning of this economic fun to the Dot Com boom we saw in the 90's where we saw crazy growth in any company that had ".com" at the end of its name. It was very similar in the real estate market across the country with ridiculous double-digit growth that was not sustainable, ultimately leading us to the second largest recession in 100 years. It was not just the real estate industry that felt the pain but the financial world as well.

While we are slowly improving the damage done, the economy is far from healed. Dr. Naroff feels it will take a year or two for banks to build enough capital before we see them return to the "new" normal lending. (When an economist talks about lending they are referring more to the big dollar lending to corporations than to the consumer. That is a big piece of what went away during this recession) Because of this, the financial world will not be a big help in the recovery.

So where will the recovery come from? Some of it will be consumer driven. (70% of the US economy is the consumer). Dr. Naroff does not expect the consumer to shop till they drop. He expects that over all this recession will have consumer spending down and savings up, anticipating consumers to return and "shop till they are tired". He went on to describe shopping till you are tired as cautious spending with control of the purse strings.

The recovery will also need to be supported by the government as it has been been for more than a year already. There were big lessons learned after the Great Depression. In 1936 and 1937 the improving economy was shut down by a combination of tax increases and rising interest rates. Joel feels that the government learned from that lesson and will continue to support the economy until the Fed sees sustainable growth.

Moving forward Dr. Naroff feels that for most parts of the country that Real Estate prices have bottomed out, including NJ, we should see a slow move up in prices for the year. The exceptions to this will probably be Southern California, NV, AZ and Florida. He feels that these markets will still have some healing to do before things get better. His forecast is a bit better than I would have guessed anticipating the growth rate to be in the low 2% range, which is darn close to normal sustainable growth.

As he finished up, Joel was kind enough to take many questions from the audience. The group had some great questions. From this Dr. Naroff feels that the tax credit for buying a home will expire in April and will NOT be extended. He also reminded us that the Fed will stop buying mortgage backed securities soon and feels that may bump rates up about 1/4%. (I think this could actually cause rates to jump ½% or more) and over the next 18 months he would not be surprised to see Fixed rate mortgages climb into the mid to high 6's. He did put that number into perspective with some historical data as well. My own spin on that: The average rate for a 30 year loan over the past 20 years is 7.47% and over the past 40 years it is almost 9.5%. That being said, the 6's certainly are pretty darn good, don't you think?

This was one of our better attended functions. I have to thank everyone at the Ocean County Board of Realtors and everyone on the Education and Affiliates committees for putting this event together and making it such a success.

• In the Group Shot: John Kemmerer from Lafayette General Title Agency, a horrible picture of Myself, Dr. Joel Naroff, Mary Adams from Home Shopper/Jersey Shore Homes and Phil Brilliant from Brilliant Lewis Environmental

Stay tuned for OCBR's next event, you don't want to miss out!

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

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Last week was a bit of a bouncy one, but we ended up with a pretty nice gain of 12/32nds by the end of the week. Overall Thursday was the good day of the week with a bit of a flight to quality into the credit markets. Friday's employment report had the market confused most of the day with a mixed bag of good and bad data, and ultimately the report became somewhat of a non-event for the market.

This week There is a mixed of data and auctions to look forward too, and a bit of confusion in the European markets that may ultimately be good news for our auctions

Here is this week's Economic Calendar:

• Monday February 8: No news day with a bouncy market, at mid day we are on the negative side, negative enough for a small tic up in rates.
• TuesdayFebruary 9: December wholesale inventories expected +0.5%. Heck, its February already. December Data is so old it just wont be a market mover.
• Tuesday: Auction #1 of the week with $40 Billion in 3 year notes. The treasury fundings have gone fairly well for the short maturity notes, it is reasonable to expect the same today. More below on the global issues that can affect the auctions this week.
• Wednesday February 10: Day 1 of me cramming in 24 hours of Continuing Ed for both Fed and State Mortgage Licensing. It is going to be a brutal couple of days.
• Wednesday: Bernake testifies before the House Financial Services Committee RE the wind down of the stimulus programs. This will be mostly a Q&A session and is a bit of an up in the air event. Fed speak is an art and most likely we will see carefully crafted answers that will not move the market.
• Wednesday: Auction #2 with $25 Billion in 10 year notes. The best outcome we can see here is for steady rates. Many analysts think we are at a bottom for rates, not exactly a recipe for a well bid long term bond auction.
• Thursday February 11: Initial Jobless claims expected -15,000. Improving, but still well above a comfort level for an improving jobs market.
• Thursday: January Retail sales expected +0.3% ex auto +0.5%. This is probably the report to watch for the week. As reported or lower and we will see support for steady rates, if we are surprised by a bigger move it is likely we will see rates bump up since the consumer accounts for 70% of our economy.
• Thursday: Business Inventories expected +0.3%. More old news that just will be over shadowed by the rest of the calendar for the week.
• Thursday: Last auction of the week with $13 Billion in 30 year bonds. Poorly bid will yield higher rates for not just this offering, but for mortgages as well.
• Friday February 12: A no news day, but look for cautious trading leading into the long weekend since the market is closed on Monday for Presidents day.

Can you say "Global Economy"? Here is this weeks wild card; Greece. There are concerns over debt defaults by Greece and a few other heavily in-debt nations that almost certainly will trigger a flight to quality into US markets. Good news when we have a few extra billion in treasuries hitting the markets this week. This uncertainty in the world is likely to cause the appetite for US securities to improve even at today's low rates. Their are a few pieces this week that could bump rates up. Bernake's testimony along with the retail sales numbers could compete for potential "biggie of the week". All together I think we will most likely have a bumpy week with an almost unchanged note by the whistle blows on Friday.

That's this weeks 2 cents worth, have a great week!

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey

This Weeks Economic Calendar

Last week ended up slightly positive with Fannie's ending the week up 3/32nds over a bumpy week of data. The real surprise last week was the strength in GDP that was easily shrugged off on Friday. Overall last weeks auctions had "OK" receptions, but the 5 year went off better than expected. The biggest take away of the week was from the FED when they said they will continue to support the Mortgage Backed Security Markets, Which is big and good news for mortgage rates. Eventually they will stop buying MBS's and that will certainly drive long term rates up.

This weeks calendar is a busy one, but the true smoking gun for the week is not reported until Friday.

• MondayFebruary 1: December Personal income, Spending and PCE expected +0.3% +0.3% and +0.1%. The actual number came in slightly stronger than expected and the PCE index is a favorite of the Fed since it tracks what consumers are actually doing. The market is off as a result of this and we may see slight ticks up in rates.
• Monday: January Institute of Supply Management expected 55.2. Also reported a touch higher than expected adding to the loss in the market today. I am sure this report is less of a factor than this morning PCE.
• Tuesday: No news today.
• Wednesday February 3: January Institute of Supply Management Service Sector expected 51.0. As reported this is slightly better than last month. If the report matches the estimate we will see a steady day for rates, but if it pops above 52.0 we may see rates creep up a bit.
• Thursday February 4: Initial Jobless claims expected -10,000 for last week. While this is an improving number there are still 460,000 claims for employment... it will take a number below 400k on a weekly basis to cause rates to jump higher, as reported this will hold rates steady.
• Thursday: 1st estimate of fourth Quarter Productivity expected +5.8% with Unit Labor costs -2.2%. With productivity up and labor costs down there are no worries of inflation. Inflation is the enemy of long term rates... so this should support steady to possibly lower (slightly lower) rates.
• Thursday: December Factory Orders expected +0.6%. This is a bit of old news that is not likely to be a market mover.
• Friday February 5: January Non farm Payrolls expected +5,000 Jobless rate expected 10.0% and Average hourly earnings +0.2%. This is an improving report that is pretty much priced in as forecast, so if the estimates are correct, they do show good news that will not move rates. If we are surprised in one direction or another we may see a move in the credit markets.

The biggie of the week has to be Fridays Employment report. More of a wild card than a biggie since it is a deviation in the number that has the potential to swing things violently. Many think the recession is beginning to tail off, and this report has some support to that thought if the estimate is correct. The good news is it will not move rates if the actual number is close to the real deal. If however we are shocked with a loss of 20k jobs or an increase in the UE Rate we will likely see the stock market sell off and money flow into the credit markets in a classic flight to quality that will drive the prices of credit instruments up and the yield down. Of course surprises can happen on both ends of the number. A stronger than expected report will confirm the idea that the worst is over and that the economy is improving... Bringing stock prices up cause a flow of money out of the credit markets driving the price of Mortgages and Bonds down, and the yield up.

We have had about 6 positive weeks in a row in the MBS markets, we may be due for a bit of profit taking that will bump Rates up. Be careful this week.

Have a great week.

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey

Library to host Haitian benefit concert

What: Benefit concert for Haitian relief

When: Friday Feb. 12, 7 p.m.

Where: Toms River branch, 101 Washington St.

CONTACT: Larry Meegan, 732-349-6200, ext. 5906 lmeegan@theoceancountylibrary.org

TOMS RIVER - The Toms River branch of the Ocean County Library, 101 Washington St., will team up with four local bands and present a benefit concert to raise donations for the relief of Haitians who were injured and dispossessed during the January 12^th earthquake.

It is estimated more than 3 million Haitians are in need of assistance.

The concert will begin at 7 p.m. in Mancini Hall at the Toms River branch Friday Feb. 19. Tickets will be sold at the door for a suggested donation of $15.

All funds raised at the concert will be donated to the International Red Cross.

Each of the bands will donate their performance for the benefit.

The bands performing include:

• "The Roustabouts," a six-member group which sings classical Rock ‘n Roll;
• "The Angeltones," four-women a cappella group which sings Doo-Wop melodies;
• "Strictly 60s," who sing songs from the peace and love generation; and
• "The Snakes," who will sing Celtic folk rock songs.

"We are thankful for this opportunity to bring the community together to raise funds and help the victims of this tragedy," said Susan Quinn, Director of the Ocean County Library.

"As always, we very much appreciate the support of the Ocean County Library Commissioners who have enabled us to perform this valuable community service," she said.

More information about the concert can be obtained by calling the library operator at (732) 349-6200 or from the library Web site www.theoceancountylibrary.org .

The American Red Cross name is used with its permission, which in no way constitutes an endorsement, express or implied, of any product, service, company, individual or political position.

For more information about the American Red Cross call 1-800-HELP NOW (1-800-435-7669) or Email info@usa.redcross.org .

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Sounds like a great way to support the relief effort!

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey

Well, when I was drinking my 2nd cup of coffee this morning I let the dog in, and glanced at the temperature... YIKES 17 degrees. It must have been really cold last night.

Well guess what I am doing this weekend?

Well I will be camping tonight and tomorrow night with my sons Scout troop. The picture above is from a year ago when I woke up to 18 degree temps and ice crystals in my tent. The things we do for our kids!

(My son just had his Eagle Board of Review- typed the Proud father of an Eagle Scout)

So when you are snug in bed, you can laugh at me headed north where it will be even colder to camp for the weekend.

Have a great weekend