Bonds Hit the Brakes

By
Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #208860

skid marks Mortgage-backed bonds have finally hit the brakes on their recent skid and the FNMA 5.5% bond is sitting at +34 bps right now.  With some serious instability in the markets (DOW is down 150 pts.) and the horrible events that unfolded this morning in Pakistan, money is on a flight to safety.  I think we may rally in the last few days of the year to finish on a strong note as bonds still remain a nice bargain at their current levels.

What does that mean for the real estate market?  For now, rates will remain in the low 6% range and at least in the Bradenton/Sarasota area, I've seen borrowers starting to pull the trigger on buying.  Good rates and great deals are a match made in heaven.  I've got a client buying a property for $106,000 that appraised for $172,000.  As an investor, you can actually cash-flow on a property again!

Is anyone else seeing some buying activity in their market?  I'd love to hear some positive reports!

 

Comments (2)

Concetta Pepenella-Timmons
Remax Metro Staten Island, New York - Staten Island, NY
Associate Broker
Here in New York as usual the month of December is quiet.  But, certainly if a house is priced right it will sell.
Dec 27, 2007 06:20 AM
Mike Tullio
Guaranteed Rate NMLS# 2611 - Sarasota, FL
VP of Mortgage Lending
Just out of curiousity, what is priced right?  Is it 80% of appraised value?  What I'm finding is that homes (and condos) priced right at market aren't moving at all, but if you are willing to take 75-80 cents on the dollar, you'll have a fighting chance.
Dec 27, 2007 07:13 AM