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Great day in ATX
March 19, 2011Good news for Real Estate Investors in Austin
March 3, 2011ALN apartment data reports that rents and occupancy are up in Texas
For Austin Occupancy is 93.6% in January 2011 which is up 5% from January 2010 and average rents are $838 per month up 6.5% from January 2010.
The Austin economy rocks along regardless of the overall economy. We are blessed to live here. Contact me if I can help with your real estate needs 512-431-5223
2011 Austin Housing
January 16, 2011We are experiencing some encouraging news for the local housing heading into 2011:
Austin home prices have held study to slightly upward in value
Interest rates continue to be amazingly low
Austin remains on the “cool/hip most desirable places to live” lists
We are attracting new companies with higher paying jobs
The “mood” of the country is improving
New home builders froze to a stand still over the past 3 years, we are experiencing pent up housing demand and working through excess inventory.
The two major “cross winds” for expansion remain:
State budget train wreck, the deficit will likely hit Austin state employees
Jumbo home loan lending (greater than $417,000) remains tight (JUMBO LOANS ARE POSSIBLE to obtain)
If you have a job, downpayment and well established credit, you can buy a home!
I am witnessing some of my most conservative customers begin to shop for rental/investment homes. They are following the wise advise of Warren Buffett: Buy when there is fear in the market, sell when there is abundant greed.
I recall 1999-2000 in central Austin. There were bidding wars over nearly each house as it entered the market. THAT was a greedy frothy time, and buyers were showing it.
THIS year, 2011 is the time for the well thought out housing investor. These customers are following one more Warren Buffettism: “You only have to do a very few things right in your life so long as you don’t do too many things wrong.”
To my eyes 2011 is the year to make a wise investment in Austin real estate.
Happy New Year!
Jan
www.janhillmortgage.biz
512-431-5223
NMLS 232034
EU pushes to regulate Derivatives
May 17, 2010The economy has been propped up and then destroyed by these “fancy investments”. It is a very complex but hidden aspect of trading. We really have no idea how large these investments are. It needs regulation, however the regulators must dismantle this carefully.
Here is a post where I explain the “investment” in a derivative.
click here to read a summary
The following is Europe is realizing the dangers these secret positions have created.
link here to read about Europe proposals
The world must come together and dismantle this cautiously. If we only understood it!
Big Business Whiners in the US?
May 16, 2010GM is whining because they can’t use sub prime auto loans to help them meet their sales goals. Honda has all of the sub prime lending an auto maker could need or want. So why can’t GM make sub prime loans? Because they lost their lending arm to the financial melt down . You and I own the financing arm of GM (through our federal bail out)…and I don’t know about you, but I don’t WANT the government owned lender to issue more sub prime garbage for the benefit of GM.
Honda, on the other hand owns their own lender (like GM used to before they ran it into the ground). Honda apparently can run their business profitably so that they CAN make sub prime auto loans and somehow not lose their shirt.
Isn’t this just good old fashion free enterprise and American competition? Honda has more capital, they can measure their risk and do the deals. GM doesn’t have the money, so they cannot afford to take the risk.
Let’s stop the whining and get back to business. GM raise capital if you want to have a high risk lending unit.
Sheesh! www.janhillmortgage.com
More Greece and Doing the Herky Jerky
May 15, 2010I have found it difficult to write more about this subject, primarily because it is difficult to be upbeat about the impact of all of this on the world and ultimately the economic recovery.
The Euro has tanked as a result of all of this sentiment from a December high of $1.50+ US to a current $1.24. This is a 17% correction to the exchange rate in 5 months. Did economic fundamentals really change that much in these few months? NO!
The uncertainty in Europe, the fluctuations in exchange rates, have caused a run into US treasuries and MBS driving down mortgage rates once again. We appear to be entering a period of deflation rather than inflation. We can celebrate lower rates, but do we really understand what a period of deflation can do to our future?
I feel that derivatives continue to rock our world and shake confidence in every market. The extreme sell off in the Euro, currency defaults have undermined the Euro’s base.
And that is what we have come to, markets of extremes. Our long term mortgage rates have remained reliably low for an extended period. I am suspecting that we are entering a period of wild fluctuation in all markets including the interest rate environment. It will be interesting to see how all of this plays out.
I have dear friends who are traveling to Europe on vacation next week. Congrats on excellent market timing K&T! Your US dollar will stretch much further on your trip.
www.janhillmortgage.biz
AUSTIN defies gravity!
March 31, 2010Texas’ Existing Home Sales Down, Prices Up in February
TEXAS (Real Estate Center, Reuters, CNNMoney.com) – A total of 13,064 existing single-family homes were sold in Texas last month, a 2 percent drop from February 2009, according to MLS data compiled by the Real Estate Center at Texas A&M University.
The median price was up 2 percent to $141,100 during the same period, and the state finished the month with a 6.9-month inventory of existing homes.
Here is how select Texas cities fared in February (data current as of March 25, 2010):
| Sales | Change from Last Year |
Median Price |
Change from Last Year |
Months’ Inventory |
|
| Austin | 1,276 | up 7% | $182,000 | down 3% | 6.2 |
| Dallas | 2,707 | down 9% | $149,200 | up 1% | 6.1 |
| Fort Bend | 510 | down 7% | $188,700 | up 8% | 4.8 |
| Fort Worth | 538 | up 5% | $106,000 | down 3% | 6.5 |
| Houston | 3,615 | down 4% | $146,600 | up 6% | 6.6 |
| Longview-Marshall | 116 | down 12% | $120,000 | up 1% | 8.9 |
| Odessa | 67 | up 26% | $123,100 | down 5% | 5.8 |
| San Antonio | 1,239 | up 7% | $140,700 | down 1% | 7.8 |
| Temple-Belton | 94 | down 10% | $110,800 | down 11% | 6.7 |
| Victoria | 61 | up 33% | $109,200 | down 23% | 6.6 |
| Texas | 13,064 | down 2% | $141,100 | up 2% | 6.9 |
Additional home sales data for these and other major Texas cities are available on the Center’s website.
At the national level, the National Association of Realtors reported this week that existing-home sales fell 0.6 percent to a seasonally adjusted annual rate of 5.02 million units in February from 5.05 million in January. That was 7 percent higher than the 4.69 million-unit pace from February 2009.
Total housing inventory at the end of February rose 9.5 percent to 3.59 million existing homes, representing an 8.6-month supply.
The national median existing-home price for all housing types of $165,100 last month, which was 1.8 percent below February 2009.
US looking pretty attractive again
March 22, 2010Now that the Euro Union looks suspect, we might just be a safer bet.
U.S. Homes Undervalued–According to a recent report from Capital Economics (a British research firm), U.S. homes are notably undervalued. The study evaluated the ratio between average home prices and the income earned by average homeowners. The ratio is now very low, indicating that homes in the U.S. are undervalued by nearly 20 percent. The same report finds that homes in Europe are over-valued by more than 20 percent — and Australia’s by 40 percent.
Greece, Moodys in the driver’s Seat
March 3, 2010If Moody’s downgrades Greece’s debt, the mess can meltdown again. It’s all in the hands of Moody’s. These are the same ratings agenices who sold your pension plan AAA rated bonds backed by sub prime loans! The sleeper statement below from Vienna “the fate of Europe is dependent upon one rating agency”, finding this unacceptable seems to be an understatement.
Greece’s seniors will be participating in a significant reduction in retirement benefits. Social unrest is anticipated.
The current impact upon mortgage rates is to drive investment into US treasuries for investor safety. As the dollar rises against the euro, the bond maket recieves a lift from these events and logic would also say that the stock market should decline from here. Things are wound pretty tight right now!
Per MSNBC 3.3.2010: “Two of the three major credit ratings agencies, Standard & Poor’s and Fitch, have downgraded Greece’s public debt to below A grade. If Moody’s follows suit, Greek government bonds would no longer be eligible as collateral for European Central Bank lending from the end of this year.
ECB governing council member Ewald Nowotny challenged that situation on Tuesday, without saying how it could be changed.
“The fate of Greece, and if you are going to be more dramatic, the fate of Europe, depends on the judgment of one rating agency. That is an unacceptable situation,” the Austrian central banker said at a panel discussion in Vienna.
In his speech on Tuesday, Papandreou said Greeks should not be lulled into thinking a government default was a “remote nightmare scenario,” saying new holes in the budget deficit were appearing on a daily basis.
Although market pressure on Greece has eased in recent days, a Reuters poll of economists showed on Tuesday that skepticism about the government’s ability to meet a goal to slash its deficit by four percentage points this year still runs deep.
Only 18 of 47 respondents said they believed Athens would meet that target, with most predicting a “slow burn” scenario through 2010 in which the government makes only limited progress in reducing the deficit.
The Wall Street Journal said Wednesday that the Justice Department is looking into whether hedge funds worked together to drive down the value of the euro.
The department inquiry comes as other regulators examine derivatives trades that big Wall Street banks made with Greece.
Analysts and investors are concerned that if Greece and some other European nations like Spain and Portugal cannot get their debt problems under control, it could destabilize the euro and upend a global economic recovery.
The euro has steadily declined in recent months because of the debt troubles among the 16 countries that use the currency, including Greece and Spain. Its value recently hit nine-month lows compared against the dollar and has dropped 10 percent over the past three months. ”
Greece understanding the Currency Default Swaps
February 25, 2010A great article explaining the risk in Greece. Love the analogy to taking an insurance policy out on your neighbor’s house and setting up an incentive to burn the house down! Insurance was intended for protection of assets and property NOT the creation of a whole new class of investments unrelated to the insurable interest! You have NO interest in your neighbor’s property and therfore should NOT be allowed to set up an insurance policy against your neighbor’s home (asset). Much in the same way that your pension plan, or government funds should not be able to “invest” speculating on whether or not Greece will default on their public debt. Your pension plan has no insurable interest in Greece’s financial failure or success.
But the returns are significant when these “bets” are stable and the world is hooked. Fancy investments where there is no insurable interest are purely financial speculation. ”Creative” investments are held off the books and unregulated. Think Goldman!
The problem is bigger than Greece, could spread to Italy, Spain and Portugal. The firestorm of default could begin in Greece and emulate the Sept. 2008 meltdown. Greece is small so it might seem easy to ignore. But let’s not forget the contagion from the Lehman collapse that spread throughout the financial system in the U.S.
Biggest problem here, nobody is exactly certain who is holding these instruments, it’s like a flu when the defaults begin. Can spread uncontrollably. Just like 2008, these gambles will be backstopped by public money. Ask yourself, if you could walk into Vegas with a bank roll, when you lost your money the government would pay you back, how often would you try your luck at Vegas? That’s what is going on with Credit/currency Default Swaps, high gain…little risk with government entities willing to bail you out when you lose. It all boils down to greed.
http://www.cnbc.com/id/35580694
FINALLY Bernake thinks this deserves some “checking into” HIGH TIME!
http://www.msnbc.msn.com/id/35582624/ns/business-stocks_and_economy/
