Real Estate One ~ Max Broock continue to find marketing advantages for Sellers

Mortgage Time Mortgage Market News for the week ending June 5, 2009
Compliments of Rose Balhorn John Adams Mortgage PHONE: (248) 625-7065 rbalhorn@johnadamsmortgage.com 31 S. Main Clarkston, MI 48346    Events This Week: Employment Fell Inflation Steady Pending Sales Up Manufacturing Mixed   Events Next Week: Wed 6/10 Trade Balance 10-yr Auction Thur 6/11 Retail Sales 30-yr Auction Fri 6/12 Import Prices Sentiment Wed 6/10 Trade Balance 10-yr Auction Thur 6/11 Retail Sales 30-yr Auction Fri 6/12 Import Prices Sentiment		Upside Surprise in Jobs Data Investors have been concerned for quite a while about the coming supply of new debt needed to pay for all the government stimulus programs. On top of that, the economic outlook has been improving sooner than expected. The combination of these two potentially inflationary developments pushed mortgage rates higher during the week.   The economic surprise this week came from the Employment report. Although the economy lost -345K jobs in May, it was far fewer than the consensus estimate for a loss of -525K jobs. The Unemployment Rate jumped to 9.4% from 8.9% in April. A surge in people entering the labor force was responsible for the unexpected increase in the Unemployment Rate. The labor market is typically one of the last areas to show improvement during an economic rebound, so signs of a turnaround are particularly significant.   Fed Chief Bernanke supported the notion that the recession would end this year. In testimony before Congress this week, Bernanke stated that he still expects the economy to move higher later this year, although it may take a while for growth to return to average levels. He looked ahead to measures needed once the economic crisis has passed, such as containing the budget deficit and reducing government control of markets. At this point, most investors believe that the Fed is not inclined to expand the mortgage-backed security (MBS) purchase program beyond its current level of $1.25 trillion, unless economic growth falls short of the Fed's outlook.   More evidence that the economy may be rebounding came from this week's housing data. April Pending Home Sales rose for the third consecutive month, increasing 7% from March. Pending Home Sales are a leading indicator, meaning that future New and Existing Home Sales reports may show increases.   Also Notable: The Unemployment Rate rose to the highest level since 1983 The European Central Bank (ECB) held rates steady Oil prices reached $70 per barrel, the highest level of the year The Fed purchased $26 billion in agency MBS during the week ending 6/3 Average 30 yr fixed rate: Last week: +0.35% This week: +0.15% Stocks (weekly): Dow: 8,800 +400 NASDAQ: 1,850 +100    Week Ahead Next week, the most significant economic data will be the Retail Sales report on Thursday. Retail Sales account for about 70% of economic activity. In addition, the Trade Balance and the Fed's Beige Book will be released on Wednesday. Import Prices and Consumer Sentiment will come out on Friday. There will be large Treasury auctions on Tuesday, Wednesday, and Thursday as well.

I have included two good articles that demonstrate varying opinions of Michigan's economy. So many people are faced with uncertainty that is becoming the new norm for Michiganners.

Michigan Braces for the next jolt
Detroit Free Press - United States
Housing market: "This will keep us closer to the bottom for the next few years," said Dan Elsea, president of brokerage services for Real Estate One in ...

Michigan will be back
The Hill - Washington,DC,USA
They'd probably mention things like state financial incentives, great universities, natural resources, picturesque tourist destinations and real estate ...

           Governor Granholm has signed legislation to give homeowners a 90-day period to work out a payment plan with their lending institution. House Bills 4453-4455, Public Act 29, 30 and 31 of 2009, would allow consumers who are on the brink of foreclosure a 90-day period to attempt a loan modification plan. 

April sales continue the same tale of two cities, growing strength in the under $100,000 market and continued slowing in the above $100,000 market, although the rate of decline has begun to decrease in the $100,000 to $250,000 segments. That is good news since recovery in the lower priced markets is the first required stage in a recovery. So far we have seen little effect from the GM and Chrysler news. There could certainly be another negative wave from further auto related changes however I think our market reacted to those changes a year or more ago. The negative impact on the market will be more like a slow leak in a balloon rather than a bursting, not so much dropping our market further as it will extent and slow our recovery.

NAR stats are also showing the beginning signs of a housing recovery across the country with the number of sales rising and housing inventories falling. If your clients are waiting for that perfect time to buy in Florida, Nevada, Arizona, etc, now is the time. More importantly, the same goes for Northwest Michigan as well.  Our recovery will be different from the rest of the country, longer and slower, but the national housing recovery will also have a positive effect on Michigan as well.

An important point to keep in mind went when counseling your clients, more real estate fortunes will be made over the next 5-10 years in Michigan, Florida, Arizona and Nevada than anywhere else in the country!

Our informal survey of the number of vacant homes remains about the same, on average 6-7 out of 10, with more agents indicating that the number is falling as opposed to rising. It still means we are not ready for appreciation to begin, but we are moving in the right direction. You will also notice the large increase in listing inventories for the under $100,000 segments, which is a combination of more bank owned homes in that price range as well as homes that used to be over $100,000 shifting to lower prices.

To generate additional buyer activity, consider dusting off the idea of using Reverse Offers from your Seller back to the Buyer as well as Lease to Own options. Also the new MSHDA down payment assistance combined with the first time buyer tax credit can give a buyer as much as $15,500 towards their home purchase.