Real Estate News – “We’ve only just gotten the major data reports for January, and … things are looking good. …”
Real Estate News:
January Numbers Are In & They’re Good
The Numbers For Home Sales Trends In January Of 2016 Paint A Picture Of A Solid Market That’s Steadily Improving
Most analysts have been waiting with bated breath for the January numbers to come in concerning real estate trends. The fact is that in December, as reported in these pages, there were some influences that lengthened some closings and pushed them from November to December. There are probably some that were pushed from December to January. At any rate, there was some shuffling around of sales and closings that made the “numbers crunching” rather murkey. All in all, most market watchers have been and ramained positive. But those murky areas in the numbers did cause some to be concerned that we could see a slow down in January.
Well, there needn’t have been concern in that area. The numbers are in for January and they are good. The economy in general is having a positive influence on everything here. The fact that 151,000 jobs were added last month is very supportive of demand, and indicates the 3% economic growth that most analysts have been predicting for 2016 will most probably be in the ball park. Other factors, too, contribute to what looks like a very healthy market report.
For a detailed look at all this, we’d like to direct your attention to a very recent article by Jonathan Smoke of Realtor.com News. He runs it all down there. Take a look at that, and we’ll continue our discussion after the break.
Net-net, pent-up demand appears stronger than any weakness caused by the financial markets. And the lower rates are encouraging would-be buyers to act sooner rather than later. With this strong start, 2016 should indeed see growth, but the biggest constraint will be the tight supply.
Starting 2016 With A Healthy Home Sales Market
So, it appears we’re beginning 2016 with a fairly healthy home sales market. Most analysts were expecting a decline in home sales activity in January, but we found instead there had been an increase in activity of 0.4%. That’s not huge, but it happens at an unexpected time. All things considered, it appears that we have increasing demand in January. That’s unusual. Most Realtors and market analysts don’t expect to see that. traditionally, until March or April.
Bottom line here: Increased activity maintains pressure upwards on prices as inventories remain low. If you’re a potential buyer in 2016, you might want to get moving now instead of wating for the traditional “Spring / Summer Selling Season”. We could see prices rising in the summer, so now may be a better time to buy if you’re able. Additionally, mortgage rates are incredibly low right now, and that can’t last forever. There are multiple forces and incators telling buyers to move now if they can.
Real Estate News
Mortgage Rates – “Mortgage rates held steady this week at 3.65 percent for a 30-year, fixed-rate loan. It’s the first time all year that rates didn’t fall …”
Do Treasury Yields Indicate Still Lower Rates Ahead?
Home Loan Rates Usually Follow Treasury Bond Yields
Will This Hold True Again?
We’ve been predicting in these pages that you could pretty much rely on continued home loan prices in the “relatively low” range for the near future. Here comes an indicator that confirms that predicition, but also says we may see even lower mortgage rates here in the near future. If you’ve been sitting on the sidelines waiting for the “perfect moment” (not a good strategy to try to pick the bottom or top of any market, by the way), then you may just see it here over the next coupld of weeks.
Treasury Bond Yields are usually a good indicator of where the mortgage market is going. Home loan rates seem to follow the Treasury yields pretty closely. As you can see in the chart above, Treasury yields have fallen signifigantly since the beginning of the year. Home loan rates have too, but they’ve not kept pace with the bond yields. This is a good indicator that we may see even lower home mortgage loan prices ahead in the near future as the two markets attempt to come back to a more normal balance.
So what about mortgages? Look at how quickly Treasury yields are falling compared to mortgage rates. The yield on the 10-year Treasury has dropped 54 basis points since the beginning of this year. Mortgage rates have fallen only 36 basis points, according to Freddie Mac.
Is History A Good Indicator Of Performance In Home Loan Rates?
So, is history a good indicator of what we can expect in the near term in mortgage rates? The short answer is “yes”. History is a good indicator in all markets when it comes to predicting what they’ll do in the future. I know it sounds old fashioned, but there really is nothing “new under the sun”. All markets are creatures that repeat the same actions again, and again, and again … with an occasional explosion of unexpected deviance from the norm. The funny thing is that after most of those abnormal variances we can look back and say, “Oh, sure! We should have seen that coming”!
Barring anything like that right here in this situation … and I don’t see anything like that coming here … we can see the possibility of even lower home loan rates in the very near future … say the next week or two. How long things will last at that lower level would be anyone’s guess.
We’ll keep our eyes out for two things here: 1) If and when these lower mortgage rates actually do materialize and come into alignment with the Treasury Yields; and, 2) Any indicators after that of when those rates might start climbing once again … and how far how fast..
Home Buyer Tips – From the value of different types of locations to negotiating strategies that can get you what you want, the more knowledge you have before taking the plunge, the better off you’ll be.
Home Buyer Tips:
6 From Realty Times
Advice For Home Buyers
From One Of The Industry’s Top Sources
Here at BrionCosta.com we recognize the value of bringing in good information from all types of different sources and passing that information on to our readers. In this way, when you visit this site, you not only get our opinions, you get the input of some of the industry’s finest minds as well. Today’s post is a good example.
Realty Times is a great website with contributions from a variety of authorities on all things having to do with real estate. Today’s post is a collection of four of their best articles on tips for home buyers that have appeared over the last 45 days or so. From choosing a good location to making sure you’ve crossed all the “t’s” and dotted all the “i’s”, you’ll find some great information in these articles.
Look for more of this kind of “Digest” post from us in the future. It’s a great way to get a lot of information to you at once. We’ll be doing one on “Home Seller Tips” within the next few days.
http://realtytimes.com Category: Buyers’ Advice Wednesday, February 10, 2016 2:09:37 PM
A few years back, “the Starbucks effect” became a legitimate term to explain the higher real estate values associated with living close to the coffee house. But being within easy…
http://realtytimes.com Category: Buyers’ Advice Thursday, February 4, 2016 1:17:34 PM
In today’s market, you usually need up to 10 percent of a home’s purchase price for a down payment. This means a $250,000 home could require $25,000 down plus closing…
http://realtytimes.com Category: Buyers’ Advice Thursday, February 4, 2016 1:16:40 PM
As most people know, the real estate market shifts between a buyers’ or sellers’ market, depending on supply and demand. However, regardless of which market we’re currently in, buyer etiquette…
http://realtytimes.com Category: Buyers’ Advice Sunday, January 24, 2016 6:22:33 AM
When it comes to buying a home, we always think about the big things: sales price, location, mortgage qualification. But it’s often the little things that rise up to make…
http://realtytimes.com Category: Buyers’ Advice Wednesday, January 27, 2016 12:23:58 PM
The only thing worse than not being able to buy a home when you want to is owning a home and not being able to do anything but sit inside…
http://realtytimes.com Category: Buyers’ Advice Wednesday, January 20, 2016 1:24:24 PM
Your son and daughter-in-law want to purchase their first house, but their income will not carry the mortgage. There are a number of ways you can help them out. This…
Home Buyer Tips.
Commercial Real Estate – “It is probable that global uncertainty will serve to keep interest rates low and allow for growth of fundamentals in the commercial real estate markets and in the broader domestic economy.” …
Commercial Real Estate:
2016 Market Outlook
Outlook Remains Positive As Capital Refocuses On Different Areas
When trying to predict the 2016 commercial real estate market outlook, one is faced with a dizzying array of contradictory factors. There have been some drastic changes in fundamentals over the last year or so, such as the decline of world financial markets. The current behavior of the Chinese markets is a case in point.
However, when all is said and done, the fundamentals of the U.S. commercial real estate market are sound. The economy, for instance, is growing slowly but solidly. I’ve said many times that I’d rather see an economy growing more slowly than some would like than I’d like to see one growing too quickly and thereby falling into recession. Slow, solid growth is always more preferable than the “boom and bust” behavior we saw in some recent decades.
What we’re seeing right now is the refocusing of capital away from areas now becoming too “pricey”, and towards areas that have yet to fulfill potential. Today I want to share with you an article by a real expert on this subject, Kevin Maggiacomo, President & CEO of Sperry Van Ness International Corp. (SVN). In this great analysis, Kevin points out some very interesting bits of information that are pertinent to us here in Southern California.
2016 has started with higher levels of volatility in United States equity markets as a result of justifiably significant fears of global economic pressures causing falling demand domestically. While some investors are taking a fearful stance, we see a different outcome. It is probable that global uncertainty will serve to keep interest rates low and allow for growth of fundamentals in the commercial real estate markets and in the broader domestic economy. Furthermore, even in the event of a domestic economic slowdown, the global uncertainty could lead to lower interest rates and even greater inflows of foreign capital, supporting the domestic commercial real estate market (the current risk / reward proposition of U.S. investment is unbeatable).
California Commercial Real Estate Forecast
To me, the most interesting items in Kevin’s article are the lists of areas that were “hot” in property sales in 2015 as opposed to the ones he predicts will become “hot” growth areas during the coming year. He sees the major, well-known commercial markets like Los Angeles, San Francisco, and San Jose (speaking just of California here), being surpassed in terms of rate of growth by what we might term “secondary” areas like Orange County and the Inland Empire, along with areas of Central California.
These will be the areas for Commercial Real Estate investors to watch as we move into 2016.
Commercial Real Estate.