Good news for credit worthy borrowers who are considering buying a house or refinancing (and are not underwater with their mortgages): Freddie Mac reports 30 year mortgage interest rates have dipped below 4% for the first time in history. See “Rates & Dates” below for more information.
Good news for owners of multi-family housing: Reis, Inc., the New York based property research firm, reported that U.S. apartment vacancies dropped to 5.6%, a five year low, in the third quarter. Reis also reported that the average monthly effective rent surpassed $1,000 at the same time. Bloomberg’s Hui-yong Yu and Katie Spencer noted in a report on October 6th that “Mounting foreclosures, tighter credit for homebuyers and young people moving out on their own have increased demand for apartments after the vacancy rate reached a three-decade high of 8 percent at the end of 2009”. A link to the Bloomberg report is found here: U.S. Apartment Vacancies Drop to Five-Year Low as Demand Begins to Slow
Good news for owners of some office properties. Reis also reported that the amount of occupied office space increased in the third quarter along with a slight decrease in vacancy rates and a slight increase in asking rents. Writing in the Wall Street Journal on October 5th, Eliot Brown did note, however, that global economic concerns in recent months have resulted in some wariness on the part of companies about signing long term leases and that the office market was much weaker in areas such as Las Vegas and Phoenix. Rents increased at the greatest rate in the San Francisco area due to the need for more space by tech firms such as Google, Zynga and Twitter.
Good news for readers of interesting books on financial and real estate matters: Michael Lewis, author of The Big Short, Moneyball and Liar’s Poker has released a new book Boomerang: Travels in the New Third World which tells the tales of some of the places hardest hit by the financial crisis. Tom Keene recently interviewed Mr. Lewis for Bloomberg Television and a link to this interview is found here: Lewis on Boomerange, Moneyball, Economy
Good news for lovers of suburbia: CNBC and Location, Inc./NeighborhoodScout recently released this slideshow entitled “10 Perfect Suburbs” and a link to this is found here: 10 Perfect Suburbs
Good news for lovers of Angie’s Questions of the Day: For the second time in the three year history of Angie’s contest, we will have two winners this week as the winner of last week’s contest is an employee of a large AMC who wishes to remain anonymous (not the same AMC as last time and NOT Appraiser Loft). Check out Angie’s Questions at the bottom of the page and good luck!
Good news for residential appraisers: Adapting to the UAD is really not that difficult, thanks to the good work of the leading residential appraisal software providers. This is reminiscent of the Y2K scare prior to New Year’s Day in 2000 which was a non-event. O.K., I don’t appreciate any additional bureaucratic nonsense that wastes my time or costs me money but my personal experience with Bradford Technolgies’ Clickforms software (which I have used for many years) has been quite positive and most reports I receive from appraisers using other products have not been bad.
While we are on the subject of software and technology, the passing of the visionary Steve Jobs was a sad day for all Americans and for all those around the world who admired the creativity of this great inventor and entrepreneur. On several occasions, AppraiserNews.com has posted links to videos of Mr. Jobs (such as his famous Stamford University commencement address) and there is little else that we can contribute at this time.
One commentary by Brad Stone and Ashlee Vance in Bloomberg BusinessWeek from last Wednesday did a nice job of summarizing the importance of Steve Jobs and a link to this is found here: Steve Jobs Departs a World He Helped Transform
Housing Wire’s Jacob Gaffney reported yesterday that it appears as though Appraiser Loft, the large national AMC, is shutting down. We at AppraiserNews.com have received a continuing flow of emails and calls from appraisers since the beginning of this year about late payments for appraisal services and the lack of return calls regarding when payments were to be made; now it appears as though their biggest fear may have occurred. A link to the HousingWire report is found here: Appraiser Loft Closes its Doors, Workers Told Firm Insolvent: Sources
On October 6th, CNBC’s Diana Olick discussed the fact that while mortgage rates were at historic lows, prices were still falling and mortgage applications were weak. A link to this report is found here: Mortgage Rates, Mortgage Demand and Home Prices All Fall
On that same day, Clear Capital and CoreLogic both released reports which were not optimistic about the housing market. Releasing their Home Data Index on that day, their Market Report was titled “Clear Capital’s First Look into 2012: A Market Flirting with Triple-Dip by Spring”, a title which says it all. CoreLogic’s Home Price Index reported both month over month and year over year declines. Links to each of these reports is found here: Newsroom at Clear Capital: Market Report
On October 7th, CNNMoney’s Les Christie discussed the Census Bureau’s report that the percentage of Americans owning their homes suffered its biggest decline since the Great Depression. The article also noted that from 2000 to 2010 the number of vacant homes grew by 44% to 15 million with a number of Sun Belt states (i.e. Nevada, Georgia, Florida, Arizona) posting the greatest percentage increases. A link to the entire article by Mr. Christie is found here: Home Ownership: Biggest Drop Since Great Depression
On October 6th, CNBC’s Senior Writer Jeff Cox wrote that “While economists have made no secret of their fears that another recession is about to strike, the real danger could be worse.” A link to his article “Is U.S. Economy Flirting With ‘Modern Day Depression” is found here: Is US Economy Flirting With ‘Modern-Day Depression?’
The New York Times’ David Leonhardt continued on this theme on Sunday in an article titled “The Depression: If Only Things Were That Good” and a link to this is found here: The Depression: If Only Things Were That Good
Concluding the “Bad” section of this newsletter: A CNBC slideshow posted on October 5th by Rajeshni Naidu-Ghelani which graphically depicts the “World’s Most Polluted Countries”. The ten countries shown were based on a report by the World Health Organization and a link to the slideshow is found here: Worlds Most Polluted Countries
Freddie Mac and the Mortgage Bankers Association (MBA) both reported declines in mortgage interest rates in their most recent weekly reports.
Freddie Mac reported that rates for 30-year fixed-rate mortgages dropped below 4.0% to a historic low of 3.94% for the week ending October 6th. Frank Nothaft, vice president and chief economist for Freddie Mac noted that:
“Average 30-year conventional fixed mortgage rates fell below 4 percent for the first time in history this week following a sharp drop in 10-year Treasuries early in the week as concerns over a global recession grew…in his testimony to Congress’s Joint Economic Committee on Tuesday, Federal Reserve Chairman Bernanke said the recovery is close to ‘faltering’ and stressed the need for lawmakers to act.”
The MBA in its most recent Weekly Mortgage Applications Survey for the week ending September 30th reported that 30 year rates declined to 4.18% from 4.24%.
In their press release of September October 5th, the MBA reported a 4.3% drop in mortgage applications during this most recent week with refinance activity accounting for 79.1% of applications.
Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac
Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association
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Here are the answers to last week’s questions: Robert Shiller said “Markets and government institutions are visibly struggling to respond consistently to an unprecedented rash of crises and conflicts. These struggles diminish confidence, which compounds the underlying economic stresses and lowers expectations”, Franklin Delano Roosevelt was the author of the quote “All Americans want decent homes to live in; they want to locate them where they can engage in productive work; and they want some safeguard against misfortunes which cannot be wholly eliminated in this man-made world of ours” and Benjamin Disraeli authored the quote “Action may not always bring happiness, but there is no happiness without action”.
1. Who Said: “That’s been one of my mantras – focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains."
a) Henry David Thoreau
b) Maharishi Manesh Yogi
c) Seve Jobs
d) Alan Watts
e) None of the above
2. Who said: “One who wants to do something, will find a way. One who doesn’t, will find an excuse."
a) Steve Jobs
c) Warren Buffett
d) Sarah Palin
e) None of the above
3. Who said: "In three words I can sum up everything I’ve learned about life: It goes on."
a) Robert Frost
b) Dalai Lama
c) Robert Wagner
d) Betty White
e) None of the above
The first person to respond with the correct answers wins a choice of one of the following:
One Free Regular Listing on AppraiserHelp.com
A Free Copy of the 12/10 UPDATED Directory of Appraisal Management Companies (Available Now to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)
One Free Trade Show Pass to Valuation Expo 2011 in Las Vegas
We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: email@example.com with your thoughts!
We really hope you find our newsletter to be informative! If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue. If you want to look back at past issues you can see our archive at www.appraisernews.com
Bill Collins, Appraiser Help Inc.