LISTING NUMBER: 4112100
TYPE: SINGLE FAMILY
ADDRESS: 121 WOODLAND CIRCLE CALHOUN, GA
LIST PRICE: 87,900
2 BED/ 1 BATH
100% Financing Available (H.R. 5017)
Mike Ramirez- Realtor in Calhoun, GA
Housing market highlights over the last week include; positive news from the National Association of Realtors, an update on interest rates, and mortgage application volume. Additionally, we discuss an update on the halting of foreclosures by some banks and ending with thoughts on due-diligence.
Realtors: Pending Home Sales Rise The National Association of Realtors reported that pending home sales increased for the second month in a row. The index rose 4.3% to 82.3% from a downwardly revised July. NAR chief economist, Lawrence Yun discussed home affordability being responsible for the rise saying, "Attractive affordability conditions from very low mortgage interest rates appear to be bringing buyers back to the market". Despite the increases over the last 2 months the Pending Home Sales Index is still 20.1% below August, 2009. I agree with Lawrence Yun, home affordability is overshadowing the economy in home buying decisions for many. While job growth is the ultimate confidence booster for many, the rise 2 consecutive months is a good sign. Further, we may see a small boost in pending home sales resulting from FHA guideline changes (see mortgage applications below).
Interest Rates Drop Further After rising for 2 weeks, then stabilizing, Freddie Mac reported a new record low for interest rates. The 30-year fixed rate dropped to 4.27%, marking the second consecutive decline. The 15-year rate declined to a new low of 3.72%. A year ago, the 30-year was at 4.87% and the 15-year at 4.33%. With core inflation staying very low, rates have been drifting back down over the last 2 weeks. This along with home values double-dipping in many markets is causing home affordability to increase. It seems impossible that rates can continue to decline but the last 2 weeks has proven otherwise. The Federal Reserve is now considering combating the economy with an inflation strategy. That may signal the end to perpetually low rates.
Mortgage Applications: Purchases Soar This week the Mortgage Bankers Association reported that its Purchase Index soared 9.3% from the prior week, lead by a 17.2% increase in FHA applications. Conventional applications increased 3.6%. This data is for the survey ending October 1st. Refinances declined to 78.9% of total mortgage applications a drop from 80.7% the prior week. Purchase applications spiked because borrowers rushed to get applications in before the October 4th FHA deadline when new requirements took effect. These new FHA requirements pertain to increased down payment and credit score requirements. I anticipate that refinances will grow against purchases after the last 2 weeks of rate declines. Despite the volume of refinances in recent weeks it seems many people out there still have the ability to refinance.
Foreclosure Mess UPDATE Bank of America extended its foreclosure suspension nationwide, while Ally Financial, JP Morgan Chase, and others suspended in 23 states. The freeze is temporary but leaving many wondering whether the suspensions will impact home prices positively or at least slow the potential upcoming declines. Wells Fargo and HSBC have since communicated that it will not be suspending foreclosures, while other banks such as PNC have admitted to communicating with their lawyers over the issue. Many people were not surprised when suspensions started as it has been rumored for quite some time that foreclosure processes were flawed. The question remains how home values will be affected. Bank of America was increasing its foreclosures significantly this year leaving some thinking that home values could be impacted. With JP Morgan Chase and Ally only halting in 23 states, it's more likely that values will be buoyed little if at all by these banks' move. If anything the impact will likely be more competition by investors with a few less homes per market to big on. I'm expecting more banks to announce they're temporarily halting as well.
Waiting on the "Fat Pitches" I had a good conversation with an investor recently about waiting on the "fat pitches" on investment property offerings. The problem with many investment property sales is the extremely low barrier of entry into the industry. Many people are offering deals on investment properties backed more by hype then by a track record. Also many markets are being touted as "go-to" markets when risks remain high. For example if you knew that REO makes up 66% of all real estate activity in Atlanta, would that cause you to think twice about evaluating property there? It should. Waiting on the "fat pitch" is, of course, a baseball term suggesting not to swing at everything you see. Knowing the current housing crisis isn't going away tomorrow should cause you to spend considerable time on due-diligence. But at the same time not missing the opportunity to lock in low rates and low prices. It becomes a happy medium of being a skeptic and not waiting too long at the same time.
Calhoun Ga Foreclosures and Real Estate Sales and Solutions- Mike Ramirez REALTOR Exit Flipper McDaniel Realty is the top production and fastest growing firm in Calhoun GA. I specialize in Foreclosure sales helping buyers and sellers invest in real estate in Gordon county Calhoun GA including Adairsville, Resaca, Sugarvalley, Plainville, Ranger and surrounding North and Northwest GA .(770)547-3450 Mike Ramirez (770)547-3450 815 Curtis Parkway Calhoun, Ga 30701