Over-the-weekend RE roundup

Yes, it looks like interest rates will rise by the end of the year. However, despite the latest projections (they will end the year anywhere between 5-6%), the Pacific Union blog noted that even this increase leaves them at historic lows.

• In the 1970’s, the average 30-year fixed interest rate was 8.6% (on a $200,000 mortgage);
• In the 1980’s, the average 30-year fixed interest rate was 12.7%;
• In the 1990’s, the average 30-year fixed interest rate was 8.12%;
• In the early 2000’s, the average 30-year fixed interest rate was 6.29%;
• Last week, the average 30-year fixed interest rate was 4.4%.

The Fed’s commitment to keeping interest rates low while the economy continues to improve appears strong. In remarks made in Chicago today, Fed Chair Janet Yellen reaffirmed that commitment.

Also, last week CAR released the pending and distressed home sales report showing that pending home sales rose 14.2% from January. This is the second straight month where the rate increased. This good news was balanced by a bit of alarming news by Trulia, which released a report showing the the Coastal California Market might be in danger of a bubble. Happily, Napa County appears to be left out of the danger zone, but it does point to the San Jose, San Francisco and Oakland markets as all being 4-8% above “market value.” The Bay Area is not alone in this distinction as 5 Southern California Counties are also considered over-valued, including Los Angeles, Orange, San Diego, Riverside and Ventura Counties.

Mortgage Rates a Concern at Start of New Year

There was a flurry of Real Estate-related activity at the end of 2013 that bears watching in the beginning of 2014.  Changes to fees charged to lenders by Freddie and Fannie could potentially lead to an increase in mortgage rates: particularly for buyers without near perfect credit scores; in addition, the Federal Reserve announced that it would begin tapering the bond buying program this month with the expectation of completely eliminating it by the end of 2014.

Some of the changes – such as the fees charged by Freddie Mac & Fannie Mae – aren’t exactly a done deal.  In fact, Chairman Mel Watt (who officially takes over on Monday) has signaled his willingness to take another look at the issue.  Will Janet Yellin’s ascension to the Fed Chair mean a similar reversal of its decision? Hard say, but the Mortgage Bankers Association (MBA) noted that there was a drop-off in refinancing applications the week after the Fed announced its tapering program, which it feels correlates to an increase in interest rates.

However, with the MBA estimating that interest rates will rise above 5% in 2014 (and even higher the following year), how will all of this affect home buying? For a deeper look at the interest rate question, visit Pacific Union’s Blog.

Mark McLaughlin, Pac Union CEO, Receives Leadership Award

Over the weekend, RISMedia presented Pacific Union’s CEO, Mark McLaughlin, the Real Estate Leadership Award at the annual Power Broker’s dinner, held in conjunction with NAR’s annual conference. The national award recognizes a member of the real estate community who embraces innovation and exercises resilience to blaze new paths to success for real estate professionals and consumers alike.

Click here for the full release.

It’s fun to be part of an innovative company.  It allows us, as agents to continually push the envelope, using all technological resources that we can think of.  Pacific Union’s marketing department is extremely flexible and willing to take (and improve on) some of the best ideas from the agents on the ground.  I feel extremely lucky to be able to be part of this extraordinary company.