St. Louis Real Estate Blog

Lock Now!

Over the last week we have seen interest rates for fixed rate mortgages drop between .25% and .375%. Why is this you ask? Wall Street is taking positions based on what they think the Federal Reserve will do with short term interest rates. For those of you that are waiting until the Federal Reserve Board makes its announcement at 1:15 p.m. C.S.T. on Wednesday October 31, 2007 you will be too late. See my previous writings about how the market moves before and after a Fed meeting.

Other things to consider, with the 30 year fixed rate hovering just above 6% we are at a psychological barrier. For the long term rates to go below 6% takes tremendous pressure. I don’t see the economic reasons that would apply this pressure taking place at this time. There are too many other signals that rates should be going up as opposed to down. This could be your last time for 6 months to lock into that really low rate!

For your questions or comments please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.

Its a tough market out there for sellers!  Everyday price reductions take place on current lisitngs and days on market continue to increase.  The recent sub prime lending problem will continue to ripple through many aspects of the economy in the coming months.  This will add to the inventory of homes that is currently at about 9 months.  Plus the buyers who could get loans before are now locked out of the market, because of the tighter lending practices being implemented by the lenders.   Thus shrinking the already limited pool of buyers. 

To sell a home in this 'Buyers' market a seller needs to make sure the home is in tip top shape so that it stands out from all the other homes that are on the market.  Make sure all the little things are taken care of, down to the light bulbs all working.

Today's buyer has a lot of choices and they are certainly in no hurry to buy.  The news is full of stories about the subprime woes and the issues with the housing market.  So unless they have been on a nice tropical beach with no contact to the outside world for the last yr the buyers are fully aware of the downward trend in the price of homes on the market.  This of course is testing the patience of many sellers.  So my advice to you the Seller is to price your home to sell in this market, work with your realtor to stage your home properly, and stay the course.  There are very few quick sales in todays market.  Stay tuned! 

Bill Cooper, Realtor

The days are shorter, nights are cooler, and the kids are now in school.  This time of year brings buyers out at about the same numbers as you would see in the spring time.  Theres just something about the cool air.  Buyers want to try and get into a home and settled before the holiday season kicks in.  The first thing all perspective buyers see of course is the outside of your home.  So here are a few hints on Sprucing Up for the Fall.

Remember first impressions are everything and a home with great curb appeal will tell perspective buyers that the rest of the home will be just as nice.

1.  Spread new mulch to give a fresh look to your mulch beds.

2.  Plant fall Mums to add fall colors.

3.  Add a pumpkin or two.

4.  Make sure your front door and porch area are kept clean and free of cobwebs and blowing leaves

4.  Power wash the siding if needed.

5.  Most important of all is keep the grass cut and trimmed.

For a complete list of ideas, please send us an email at Melanie@MelanieCooperTeam.com

Thanks,

The MelanieCooperTeam

Guess What? You Can’t Afford to Wait!

If you had a crystal ball and could see what direction interest rates and house prices where going you wouldn’t be reading this blog. Now that you have had a chance to think about that and agree with me on that premise, let’s move on to the bigger issue which is “You Can’t Afford to Wait!”

If interest rates go up while you are reading this blog you will lose money! Why you ask? Because you could have locked into an interest rate for a period of time and by waiting you may have missed that opportunity.

What are you waiting for? When are you going to:

Purchase your first home?

Purchase your next home?

Invest in real estate?

Refinance your home?

Get a home equity loan to improve your home or pay off bills?

Do anything?

If rates go down while you are reading this you will lose money. Why you ask? Because now you will get greedy and wait for them to go down further. By the time you figure out they are at their lowest point they will be on the way back up again. Remember, pigs get fat, hogs get slaughtered.

If you don’t make an offer on that house you like, someone else will. Maybe not today, but sooner or later someone will purchase that house. The sooner you do it, the sooner you get a chance to lock into building equity and creating wealth. I subscribe to the theory that there is a house out there for everyone and sometimes you want to buy the wrong house. But that is why you should have a good buyer’s agent representing you. They will make sure that you buy at the right price for this time and that the house is the right house for you at this time.

If you are thinking about buying investment property, what are you waiting for? The next 12-18 months will be the best time to purchase single family investment property here in the United States for at least the next 20 years. Every day that you wait to start you are passing up the chance to build your real estate fortune!

If you wait to get that home equity loan it might not be available to you when you want. The loan programs that were available in March 2007 have changed. Credit score minimums have changed, loan to value limits have changed. House prices may have fallen your area limiting how much you can borrow. Waiting will cost you $$$$$$$$$$$$$$.

For comments on this or other postings please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.

Chris is a contributing blogger to our websites.  If you have any questions or comments please feel free to contact him.

Melanie

I was on the phone with a past client last night that is building a $1,300,000 house and will need a loan for $800,000. When she asked about the rate on the 15 year fixed rate mortgage I tried to prepare her for the rate shock, but I almost had to call the paramedics after she heard the rate. As the fallout from the break up of the marriage of Wall Street and Mortgage Backed Securities continues, the pressing question on the mind of many borrowers is, “Why are Jumbo rates so high?” First we need to define what a Jumbo mortgage is and for that we turn to our new “bff” Wikipedia http://en.wikipedia.org/wiki/Jumbo_mortgages. Now that you know what a Jumbo mortgage is, hopefully the fact that it is the insurance companies and banks that are the ones who purchase these Jumbo Mortgage Backed Securities for their investment portfolios will help shed some light on why there is not as much demand for them. No different than any commodity in a capitalistic society, the laws of supply and demand rule the day. As the demand for these products has shrunk, the price of them has fallen. Because they are a bond instrument, back to my new “bff” http://en.wikipedia.org/wiki/Bond_valuation, when the price falls, the yield or interest rate rises. In the case of the Jumbo loans, the price has fallen so much that spread of the yield from Conventional loans is greater than it has been in the last 20 years. So we have all the Banks and Insurance Companies that would normally be gobbling these securities up straying away from them because they are mortgages.

Mortgages right now to investors are a very bad word. Jumbo mortgages are part of the 3 trillion in adjustable rate mortgages are coming due this year and next. There is too much demand for these products for the spread to stay where it is today. As I have challenged the industry before I will challenge them again. Somewhere there is an insurance company or a bank that is willing to put these loans on the books at a more reasonable price. As I type these words I am sure that those companies are out there, it is just harder to find them but we will!

For your comments or questions, please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.