Market up date at Glance through November 2012

Market up date at Glance through November 2012

Noise, Noise, Noise……. As I sat down to review this months & year to date information, the election ads got me to thinking about all the misleading information you need to sort through to understand the underlying direction of housing within our market place. So first, just a brief diversion into the noise. Of course I mentioned the election, then we have the “fiscal cliff”,  the  “national debt”, taxing the “rich”, the stock market gyrations, the European union and  Greece, Spain, Portugal or Italy’s mess, China’s exports and buying our debt, last but not least global warming. The point is not that any of the above may not be important, the questions to ask is whether they are important to what happens to the local housing market. When boiled down to the essence the above are only important as much as they cause either confidence in or lack of,  the local persons outlook on their personal finances. The drivers of the local market are jobs, population, wages, either growing or shrinking, local confidence positive or negative. The real national drivers of the local market can be boiled done two very critical ones, loan underwriting requirements from the secondary market and the Federal Reserve’s policy on interest rates. First, loan underwriting, has become a significant impediment to the home buying process, the pendulum was way to loose and now has swung to the opposite, way to restrictive, so persons that may be interested in buying or moving up do not try because of the noise they hear from the talking heads on TV. Plenty of Money is available, the critical issues is dealing with a knowledgeable lender that understands how to solve the natural question issues that come up in underwriting. The second, the Federal Reserve’s interest rate policy. As restrictive as underwriting is, the Fed’s interest rate policy is the opposite, loose, in fact the Fed is buying approximately 85% of all the mortgages created with a stated commitment to continue it policy through 2015. Interest rates are approximately 47% lower than they were in 2007 & lower than in 1971.

That was a very long way to say all real estate is local !!!!!!!!!!!!!!!!!!!!

With the commentary above I will let the numbers & charts below tell the story