Incline Village Real Estate and Community News

Dec. 7, 2016

REAL ESTATE AND MORTGAGE RATES - LAST WEEK IN REVIEW AND FORECAST FOR THIS WEEK

Job growth held steady in November while economic activity surged third quarter.

Consumer spending and business investment pushed Gross Domestic Product (GDP) above expectations in the third quarter. After weak economic growth the first half of 2016, the Bureau of Economic Analysis reported that the second reading of third quarter GDP surged ahead by 3.2 percent, the fastest pace in two years. GDP is the monetary value of all finished goods and services produced within a country's borders in a specific time period, and it is considered the broadest measure of economic activity. Consumer spending rose by 2.8 percent while business investment rose sharply by 10.1 percent.

Job growth held steady in November. The Bureau of Labor Statistics reported that U.S. employers added 178,000 new jobs in November, near the expected 180,000. That brings the monthly average to 181,000 in 2016. Within the report it showed that average hourly earnings fell by 0.1 percent, while the unemployment rate fell to 4.6 percent, the lowest level since August 2007. The low unemployment rate, however, is due in part to some unemployed Americans dropping out of the workforce.

Personal incomes also rose 0.6 percent in October, the best monthly gain since April, while personal spending was up 0.3 percent, below the 0.5 percent expected.

The pickup in income is good for consumers and the economy; however, it can lead to higher inflation if the trend continues. For now, the inflation gauge Core Personal Consumption Expenditures (which removes volatile food and energy prices) remained tame in October, rising 0.1 percent from September, in line with estimates. The year-over-year rate was unchanged at 1.7 percent. When inflation rises, it can hurt the value of fixed investments like Mortgage Bonds, to which home loan rates are tied. This means higher inflation can also cause home loan rates to rise.

Although home loan rates hit their highest 2016 levels at the close of November, rates are still historically low.

If you or someone you know has any questions , please don't hesitate to contact me.

Forecast for the Week

Only a few reports remain in the lead up to the Federal Open Market Committee meeting December 13-14

ISM Services Index will be released on Monday.

On Tuesday, third quarter Productivity will be delivered.

As usual, weekly Initial Jobless Claims will be reported on Thursday.

Closing out the week, the Consumer Sentiment Index will be released on Friday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds gained some traction in recent days after significant losses the last few weeks.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Dec 02, 2016)

Posted in Real Estate News
Nov. 21, 2016

REAL ESTATE AND MORTGAGE RATES - LAST WEEK IN REVIEW AND FORECAST FOR THIS WEEK

The latest numbers on Housing Starts and Building Permits may encourage dismayed homebuyers facing a lack of inventory.

October Housing Starts surged, the Commerce Department reported, up 25.5 percent from September. It was the highest level since September 2007. Single-family starts, which make up the largest share of the market, jumped nearly 11 percent, while multi-dwelling starts skyrocketed by 68 percent. From October 2015 to October 2016, Housing Starts were up 23.3 percent. October Building Permits also rose 0.3 percent.

In more good news, Retail Sales were solid in October, which could spark a boost in the U.S. economy heading into the holiday shopping season. The Commerce Department reported Retail Sales rose 0.8 percent, above expectations, while September's numbers were revised higher. The positive numbers in September and October were the best two-month rise since early 2014. Retail Sales are up 4.3 percent from a year ago.

Wholesale inflation was unchanged and still tame in October, per the Producer Price Index report. The Consumer Price Index (CPI) edged higher but was in line with expectations in October at a 0.4 percent increase, though this was the largest gain in six months. Core CPI (which strips out volatile food and energy) was just below estimates. Year-over-year consumer inflation numbers edged lower.

Inflation will continue to be a data point to watch since increased inflation can hurt the value of fixed investments like Mortgage Bonds, and home loan rates to which Mortgage Bonds are tied.

For now, although home loan rates edged higher following election results, they are still in attractive territory.

If you or someone you know has any questions , please don't hesitate to contact me.

Forecast for the Week

Investors will have a lot to digest in this shortened Thanksgiving week.

Existing Home Sales will be released Tuesday followed by New Home Sales on Wednesday.

Durable Goods Orders will also be released on Wednesday along with the Consumer Sentiment Index, weekly Initial Jobless Claims and the Federal Open Market Committee meeting minutes.

The markets will be closed all day Thursday for Thanksgiving. On Friday, Stocks will close at 1:00 p.m. ET, while the Bond markets will close at 2:00 p.m. ET.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds have attempted to stabilize following their post-election dive.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Nov 18, 2016)

Posted in Real Estate News
Nov. 14, 2016

REAL ESTATE - LAST WEEK IN REVIEW AND FORECAST FOR THIS WEEK

As Americans went to the polls to exercise their right to vote for president, global markets took notice.

When Donald Trump was declared president elect, the market reactions overnight were as wild and unpredictable as the election itself. Dow futures were down more than 800 points in the wee hours of the morning, only to close up 250 points Wednesday. Further, the Dow Jones Industrial Average opened Thursday at a new all-time high.

Investors may feel the win is more Stock-market friendly with potential tax cuts, deregulation of banks, and higher defense and infrastructure spending. There is also speculation that President-elect Trump's anticipated policies could spur a rise in inflation.

Rallies in the Stock markets and inflationary increases both can have a negative effect on Mortgage Backed Securities, the type of Bond to which home loan rates are tied.

In other news, weekly Initial Jobless Claims continue to signal a robust job market. The Labor Department reported that the number of Americans filing for first-time unemployment benefits fell 11,000 to 254,000 during the week ending November 5, below the 262,000 expected. First-time claims have now remained below the 300,000 mark for 88 consecutive weeks, a stretch not seen since 1970.

For now, home loan rates remain attractive despite edging higher recently.

If you or someone you know has any questions please don't hesitate to contact me.

Forecast for the Week

Inflation, housing and manufacturing reports will stand out in this data-rich week as the Fed gears up for its Federal Open Market Committee meeting in December.

The Retail Sales report kicks off the week on Tuesday.

Regional manufacturing data comes from the Empire State Index and the Philadelphia Fed Index on Tuesday and Thursday, respectively.

Inflation metrics will be shared in the Producer Price Index on Wednesday and the Consumer Price Index on Thursday.

Housing market data is plentiful starting with Wednesday's release of the NAHB Housing Market Index followed by Housing Starts and Building Permits on Thursday.

As usual, weekly Initial Jobless Claims will be delivered on Thursday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds took a dive recently following the presidential election. Bond markets were closed Friday, November 11 in observance of Veterans Day.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Nov 11, 2016)

Posted in Real Estate News
Nov. 7, 2016

RECORD WET OCTOBER TURNS TO DRY NOVEMBER...

We saw a record amount of rainfall in October around the lake, and November may be a stark contrast. We are still watching for the storms to return but as of right now there is not much in the 2 week outlook.

It's no secret that October was wet. Some areas like Tahoe City saw the wettest October in over 100 years of record keeping.

 

The Reno airport recorded the 2nd wettest October on record and the Snow Lab on Donner Summit recorded the 3rd wettest October since 1870.

 

That is the wettest October in over 50 years.

 

Here is a look at the Tahoe Basin as a whole which picked up 463% of average rainfall in October, and is already at 27% of the total water year average only one month into the water year!

 

The Northern Sierra 8-Station Index is running ahead of the wettest year on record.

 

The drought monitor updated yesterday shows an end to the drought in the NW corner of the state, and a big drop along the Sierra Crest down to Tahoe into only the "abnormally dry" category.

 

Southern CA is still in an extreme drought and we need to get some storms going down there. Northern CA has benefited from being on the Southern edge of the storm track into the Pacific NW the last couple of years.

For snowfall we saw some but not compared to the rain we saw. At 8,000 feet on the mountains along the West side of the lake we saw around 18 inches for the month. Mt. Rose on the East side of the lake with the higher elevation reported 30 inches for the month, which is 9 % of their season average already.

The Forecast:

There will be storms pushing into the West Coast of North America this weekend and next weekend, but they will weaken just before reaching Central CA. A large dome of high pressure will sit over North America week 1, and week 2 it may sit closer to the West Coast.

Here is the total precip forecast off the latest GFS forecast model for the next 10 days.



Extended Forecast

We may see a change in the pattern the 2nd half of the month, but nothing is definitive at this point. We will keep watching for a change back to stormy.

It's no secret by now that we have started November in a dry pattern that will continue through mid-month.

While the GFS forecast model tries to push storms far enough South to brush us this weekend and around the 17th, the European model has a stronger high off the coast and keeps us dry.

There are signs we will see a pattern change the 2nd half of the month. The ensemble runs are starting to show a trough possibly sitting near the West Coast from the weekend of the 19th onward. That could open the storm door in time for Thanksgiving.

Posted in Community News
Nov. 7, 2016

REAL ESTATE - LAST WEEK IN REVIEW AND FORECAST FOR THIS WEEK

The October Jobs Report didn't cause much of a shake up with steady job growth and unemployment.

U.S. employers added 161,000 new jobs in October, which was below expectations, the U.S. Bureau of Labor Statistics reported. That being noted, both August and September numbers were revised up by a total of 44,000. Job gains continued to trend up in health care, professional and business services, and financial activities. New jobs have averaged 181,000 per month in 2016, compared with 229,000 in 2015. Meanwhile, the Unemployment Rate ticked down to 4.9 percent from 5.0 percent and has changed little since August 2015.

Average hourly earnings rose by 0.4 percent. On a year-over-year basis, average hourly earnings grew at a new post-crisis high of 2.8 percent over the previous year.

The inflation-measuring Personal Consumption Expenditures (PCE) was inline with expectations and still tame, running below the Fed's 2 percent target. Core PCE, which excludes volatile food and energy readings, rose 0.1 percent in September from August. In the 12 months through September, Core PCE increased 1.7 percent after a similar increase in August.

Inflation trends are important to watch because inflation reduces the value of fixed investments, like Mortgage Bonds. When inflation rises, it can impact home loan rates, since they are tied to Mortgage Bonds.

The Federal Open Market Committee considered trends in inflation, the labor sector and more when deciding to keep its benchmark Fed Funds Rate unchanged at its November meeting. This is the rate banks lend money to each other overnight. When this rate changes, other rates can change as well.

For now, home loan rates remain just above all-time lows.

If you or someone you know has any questions, please don't hesitate to contact me.

Forecast for the Week

The presidential election will overshadow what minimal economic data is released this week.

Weekly Initial Jobless Claims will be reported on Thursday.

The Consumer Sentiment Index will be released on Friday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds have stabilized recently, keeping home loan rates near historic lows.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Nov 04, 2016)

Posted in Real Estate News
Oct. 31, 2016

REAL ESTATE - LAST WEEK IN REVIEW AND FORECAST FOR THIS WEEK

After trudging along during the first and second quarters of 2016, Gross Domestic Product (GDP) got a little more spring in its step.

The government reported that the first reading on third quarter GDP rose by 2.9 percent, above the 2.5 percent expected and well above the anemic 1.4 and 0.8 percent reported in the second and first quarters respectively. GDP measures the pace of economic activity and represents the total dollar value of all goods and services produced over a specific time period. A reading of 2.5 to 3 percent is considered optimal. This initial third quarter reading marks the fastest pace of growth in two years.

Yet, all was not rosy within the report. Consumer spending grew by just 2.1 percent, well below the 4.3 percent in the second quarter. Corporate investment on equipment fell for the fourth straight quarter, the longest stretch since the end of the Great Recession in mid-2009. Residential investment also declined. GDP's inflation gauge was near unchanged.

In housing news, September New Home Sales rose 3.1 percent from August to an annual rate of 593,000 units, the Commerce Department reported. However, this was below the 610,000 expected and after August was revised lower to 575,000 units from the 609,000 originally reported. The good news is New Home Sales are up nearly 30 percent from September 2015. The median price for a new home also rose 6.7 percent in the past year due in part to lower inventory numbers. Currently, there is a 4.8-month supply of new homes, below the August inventory level.

Also of note, the August S&P/Case-Shiller Home Price Index rose 5.1 percent annually, which was in line with estimates and comes after a 5.0 percent increase in July. From July to August, prices were up 0.2 percent.

Attractive home loan rates help offset rising home prices, and for now home loan rates remain near historic lows.

If you or someone you know has any questions , please don't hesitate to contact me. I'm happy to help.

Forecast for the Week

This action-packed week will revolve around two market-moving releases: the Fed's monetary policy statement and the Jobs Report for October.

Economic data kicks off Monday with the Fed's favorite inflation gauge, Personal Consumption Expenditures. Personal Income and Personal Spending also will be released Monday.

Manufacturing data will come with Monday's Chicago PMI and the national ISM Index on Tuesday.

Look for the first labor market news of the week via the ADP National Employment Report on Wednesday, followed by weekly Initial Jobless Claims Thursday.

While not an economic report, the Fed's monetary policy statement will be released Wednesday after the close of the Federal Open Market Committee (FOMC) meeting.

Productivity and the ISM Services Index will be delivered on Thursday.

The monthly Jobs Report for October will be released on Friday, which includes Non-farm Payrolls, Hourly Earnings, Average Work Week and the Unemployment Rate.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds have been up and down recently, however home loan rates remain near historic lows.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Oct 28, 2016)

Posted in Real Estate News
Oct. 26, 2016

REAL ESTATE - LAST WEEK IN REVIEW AND FORECAST FOR THIS WEEK

First-time homebuyers led the surge in Existing Home Sales as they realized the dream of homeownership in September.

After two straight monthly declines, Existing Home Sales in September jumped 3.2 percent from August. All major regions saw an increase in closings, as reported by the National Association of REALTORS® (NAR). Limited inventory, however, still plagues many regions of the country. Lawrence Yun, NAR's chief economist, noted, "Unfortunately, there won't be much relief from new home construction, which continues to be grossly inadequate in relation to demand."

September Housing Starts slipped 9 percent from August to the lowest level in 18 months. While multifamily dwellings fell significantly, single-family starts, which account for the largest share of residential housing, surged 8.1 percent. Building Permits, a sign of future construction, beat expectations, rising 6.3 percent from August.

Meanwhile, consumer inflation edged higher in September, though still on the tame side. From September 2015, the Consumer Price Index (CPI) was up 1.5 percent, up from the 1.1 percent annual increase in August. Core CPI, which strips out volatile food and energy, rose 2.2 percent year over year. Inflation trends are key data points to watch. The Fed's inflation target is 2 percent. When inflation rises, it can impact home loan rates since inflation reduces the value of fixed investments like Mortgage Bonds, and home loan rates are tied to Mortgage Bonds.

For now, home loan rates remain near all-time lows. Attractive home loan rates help offset rising home prices, making homeownership or refinancing a distinct possibility for many.

If you or someone you know has any questions , please don't hesitate to contact me.

Forecast for the Week

Gross Domestic Product (GDP) has been running well below normal this year. Friday's reading will tell if this trend continues.

Housing data will be plentiful this week with the S&P/Case-Shiller Home Price Index on Tuesday, New Home Sales on Wednesday and Pending Home Sales on Thursday.

Consumer Confidence and the Consumer Sentiment Index will be released on Tuesday and Friday, respectively.

Durable Goods Orders and weekly Initial Jobless Claims will be reported on Thursday.

On Friday, the first look at third quarter Gross Domestic Product will be reported along with the Employment Cost Index.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds have rebounded slightly in recent days, keeping home loan rates in historically low territory.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Oct 21, 2016)

Posted in Real Estate News
Oct. 17, 2016

REAL ESTATE - LAST WEEK IN REVIEW AND FORECAST FOR THIS WEEK

Following a disappointing back-to-school shopping season, consumers made retailers happier in September.

After declining in August, Retail Sales surged by 0.6 percent in September, which signals the consumer is alive and well as we head into the crucial holiday shopping season. The increase was led by ramped-up sales for autos and increasing fuel costs at gas stations. The positive September news follows a 0.2 percent loss in August and a slight gain of 0.1 percent in July.

Meanwhile, the release of September's Federal Open Market Committee meeting minutes revealed a stronger resolve to raise the benchmark Fed Funds Rate soon. This is the rate at which banks lend money to one another overnight. With weak Gross Domestic Product and muted inflation heading into September's meeting, incoming economic data will be a crucial determining factor on the timing of future action by the Fed.

Speaking of inflation, wholesale inflation came in hotter than expected due to higher energy and food costs, as the September Producer Price Index (PPI) rose 0.3 percent. Core PPI, which strips out volatile food and energy prices, also rose 0.2 percent, above the 0.1 percent expected. Inflation reduces the value of fixed investments like Bonds. On an annual basis, PPI has risen just 0.7 percent, which shouldn't put much pressure on the more closely watched Consumer Price Index (CPI). However, it will be important to watch how inflation trends in upcoming reports. When inflation rises, it can impact home loan rates, since it is tied to Mortgage Bonds.

For now, home loan rates are still something to be happy about, remaining near all-time lows for those considering a home purchase or refinance.

If you or someone you know has any questions please don't hesitate to contact me. I'm happy to help.

Forecast for the Week

After weaker-than-expected housing data in the past month, the sector will be watched for signs of a pickup. Consumer inflation will be too.

Manufacturing data from the Empire State Index and the Philadelphia Fed Index will be reported on Monday and Thursday, respectively.

In the housing sector, look for the NAHB Housing Market Index on Tuesday, Housing Starts and Building Permits on Wednesday, and Existing Home Sales on Thursday.

The Consumer Price Index will be reported on Tuesday.

The Fed's Beige Book will be released on Wednesday.

As usual, weekly Initial Jobless Claims will be reported on Thursday, as initial claims have been at 43-year lows.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, although Mortgage Bonds declined in recent weeks they managed to stabilize, keeping home loan rates in historically low territory.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Oct 14, 2016)

Posted in Real Estate News
Oct. 10, 2016

SIERRA SOTHEBY’S INTERNATIONAL REALTY REPORTS STRONG THIRD QUARTER FOR LAKE TAHOE

The Lake Tahoe, Truckee and surrounding area real estate market closed out its third quarter on a high note despite the National Association of Realtors reported dip in the luxury real estate market.

The downturn has been most noticeable across the ultra high-end sector in certain markets such as New York, Miami, San Francisco and Aspen.

While high-end luxury homes prices are losing altitude around the country, Lake Tahoe and Truckee home prices have held steady and volume is up across most neighborhoods.

Tahoe’s lakefront market witnessed that “mixed bag” first hand. Incline Village, Lake Tahoe’s East Shore and South Lake Tahoe all saw third quarter gains in lakefront sales. While the North & West Shore lakefront market dipped by 78% with 2 recorded lakefronts sold on that end of the Lake as compared to 9 in 2015.

In Truckee, Martis Camp continues to defy gravity in the luxury market with 44 homes sold in third quarter as compared to 16 this time last year; a 175% increase in properties sold with a total dollar volume of $186,725,250. The highest recorded sale was $8,900,000 while the low end registered in at $1,795,000. Average days on market for Martis Camp was down from 255 to165.

As winter approaches, the slopeside markets saw the best third quarter pickup in years with a 143% jump in sales volume for single family homes at Squaw Valley, 142% increase at Northstar and a 33% jump on Donner Summit/ Sugar Bowl. With new homes under construction and significant proposed development, these will continue to be hot spots to watch in the coming year

“The Tahoe Real Estate market performs quite differently than the national average and market trends can vary dramatically from neighborhood to neighborhood,” says Brit Crezee, Marketing Director at Sierra Sotheby’s International Realty. “We drill down the data in quarterly reports to help buyers and sellers understand what’s happening in each distinct community.”

“Generally speaking, we’re seeing very robust activity in mid to entry priced properties across of all the markets we serve. And while there has been an increase in transactions, price increases are moderate and less than expected,” says Peter Strand, President of Sierra Sotheby’s International Realty. “Traditionally, third quarter is very strong for Lake Tahoe home sales, and this August proved to be our best month on record for our brokerage.”

Citing new data from realtor.com, experts are predicting a stronger than average fourth quarter with claims that the market could bring the hottest fall in a decade.



“Overall, the fundamental trends we have been seeing all year remain solidly in place as we enter the traditionally slower sales season, and pent-up demand remains substantial as buyers seek to get a home under contract while rates remain so low,” says realtor.com Chief Economist Jonathan Smoke.

“Lake Tahoe Realtors are reporting pent up buyer demand due to a scarcity of desirable homes for sale in the mid to lower end market space,” says Strand. “The lack of supply is curbing the efforts of many prospective buyers.”

For sellers who are on the fence, now may be a great time to list. “The properties that are moving continue to be in the best locations with the best updates and finishes. If sellers aren’t willing to commit to realistic pricing and reasonable staging/updating then we’re seeing more and more agents walk away from the listings,” .

Posted in Community News
Oct. 10, 2016

REAL ESTATE - LAST WEEK IN REVIEW AND FORECAST FOR THIS WEEK

The labor market has certainly had its share of reasons to cheer and groan this year. September's Jobs Report was no exception.

There were 156,000 new jobs created in September, the U.S. Bureau of Labor Statistics reported, below the 176,000 expected. Gains occurred in professional and business services and in health care. July numbers were revised down while August was revised up, leaving job gains for those two months 7,000 less than previously reported. Job growth in 2016 has now averaged 178,000 per month, compared with an average of 229,000 per month in 2015 and 251,000 per month in 2014.


The unemployment rate ticked up to 5.0 percent from 4.9 percent, which is little changed since September 2015. And from September 2015 to September 2016, average hourly earnings rose 2.6 percent.

According to data analytics firm CoreLogic, August home prices, including distressed sales, rose 6.2 percent year-over-year with a 1.1 percent gain from July to August. CoreLogic's chief economist, Frank Nothaft, said, "Home prices are now just 6 percent below the nominal peak reached in April 2006. With prices forecasted to increase by 5 percent over the next year, prices will be back to their peak level in 2017."

As home prices continue to rise, home loan rates still remain in historically low territory, helping opportunities remain for those considering a home purchase or refinance.

Forecast for the Week

After a back-to-school shopping season that didn't make the grade in August, many hope Retail Sales rebounded in September. Markets will be closed on Monday for Columbus Day.

The minutes from September's Federal Open Market Committee meeting will be released Wednesday afternoon.

As usual, weekly Initial Jobless Claims will be reported on Thursday.

On Friday, Retail Sales, the Producer Price Index and the Consumer Sentiment Index will be released.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds declined in recent weeks. However, home loan rates continue to hover in historic territory.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Oct 07, 2016)

Posted in Real Estate News