Fall Weather And Falling Rates – Good morning. Fall is finally here. It looks like the weekly ‘heat waves’ we’ve been dealing with have finally abated and we’re off to Fall weather patterns. With the drought at record levels, any break we can get will help us all.
I’m certain most of you have seen what’s been happen on Wall Street. At the close yesterday the market had wiped out all of the gains we had seen so far this year. The DOW was down over 600 points dragging down several other sectors with it.
The big mover that we watch is the 10 Year Treasury Note. This is where mortgage interest rates are based. When you see a move in mortgage rates, it is a reflection of that particular market sector. As of 9:00 a.m. this morning, the Benchmark 10
Year Note was yielding 2.20%. That is the lowest we have seen in more than a year, pushing long-term (30 year)
mortgage interest rates into the high 3’s.
Mortgage rates are falling as the housing market has cooled off. Here in San Diego we have seen certain areas maintain a precipitous drop since March. Some of these areas are down double digits. Sellers are starting to realize that the rush in 2013 didn’t hold into 2014 and want to sell – NOW.
What does this mean if you’re a buyer – simple, it’s time to buy a home. What about if you’re a seller? That’s a bit more complex answer. If you live in a market area that has strong ancillary amenities, e.g., schools, shopping, neighborhood
safety programs and most importantly ease of commute. If you live in an area that offers any of these you’re golden. Location of course is always a driver in value. If you live on the water or have a large parcel of developed land market fluctuations are of no concern.
I wanted to briefly touch on something that I am being asked often, especially in the past few months.
This past weekend I was showing homes in Eastlake. My clients are friends that I met when I sold their home a few years back. They’re re-engaging the market after a short sale and have some concerns as to the
current trend(s) that we are seeing. As you can imagine they have a bad taste in their mouth. They want to make sure that the decision they make today doesn’t disrupt their family. Having school age children and limited resources like many of us, they’re concerns are valid.
My advice to them and anyone looking into buying a home now is this. The market events that we saw in 2007-2009 we’re unprecedented. Those events were a derivative of many factors. We’ve all heard it was “Wall Street” and greedy loan officers – no, that’s not it. We’re a Nation that borrows.
Most consumers during that time period could have cared less what type of loan they had or what the terms of it was. All that mattered was, “am I approved” and when “do I close escrow”. Turning a blind eye to the largest financial obligation one will most likely incur is nuts. Housing during that time period reminded me of car shopping. How many
times have you heard someone ask the salesman, “How much is my payment going to be” and can you “hold my down payment until I get paid next week” while looking away from the bottom line. This is exactly what happened in housing – greed, emotion and peripheral influence.
Today I am happy to see that the questions I’m getting from clients of past who got burned are the opposite. I spend more time explaining every penny of what the payment is and why. I’m seeing clients speak to tax counsel to see what the benefits are and how they can best utilize their hard earned savings. To me having to explain things in detail is not an inconvenience, it’s a welcomed pleasure. If you’re in the market and have any questions about buying or selling, call me. I’m happy to sit down with you and discuss your options.
The one thing I can say with confidence is that I consider myself an expert in every facet of Real Estate and have the track record to back that up.