Appraisal Issues


10 YR Treasury 2.027 (time of CMG Rate Sheet Release)
Open is about 4 tix worse from yesterday. Approximately 0.174 worse in rebate on rate sheet.

Growing concern that Greece’s leaders are divided as to how to handle their current financial crisis has lead most US stocks to go down. The Netherlands and Germany are leading a drive to include more private-sector involvement in the next austerity package for Greece. “Europe is the issue that is first and foremost in everyone’s mind, so any news that comes out on that does have a strong impact on the market,” Peter Jankovskis, of Oakbrook Investments in Lisle, Illinois. “Any weakness there is going to be a drag worldwide.”

As a further sign that consumer spending has taken a turn for the worst, the world’s largest consumer electronics chain, Best Buy, is planning on slashing its holiday hiring by about half of what it was last year. This is a poor indicator both for the economy and is real bad news for the unemployed. Best Buy hired 29,000 seasonal employees last year, and anticipates hiring only 15,000 this year. “Our plan isn’t built or predicated upon a meaningful move in the economic environment,” said Brian Dunn, CEO of Best Buy, “The consumer is being really careful about where he or she is spending the dollars, and I think that will continue through the holidays.”

US home mortgage applications rose last week, showing that refinance demand is going up as rates are going down. Refi applications, according to the Mortgage Bankers Association’s seasonally adjusted index, went up 11.2 percent and purchase applications rose 2.6 percent. “Mortgage rates declined last week, at least partially in response to the Fed’s announcement that they would shift their portfolio towards longer-term Treasury securities, and that they would resume buying mortgage-backed securities,” said Mike Fratantoni, MBA’s Vice President of Research and Economics.

Market Summary

At 12:32 PM ET: Although the major indexes are mixed in trading today, most stocks are lower on the NYSE where declining issues lead advancing issues by 2.0 to 1. Among individual stocks, the top percentage gainers in the S.&P. 500 are Jabil Circuit, Inc. and Inc.

Will the S&P Downgrade Affect Interest Rates?

Daily Real Estate News | Monday, August 08, 2011


Standard & Poor downgraded the U.S.’s credit rating on Friday, despite Congress reaching a deal in the final hours on the debt ceiling crisis last week. And now many of your customers may be asking: What does this mean for interest rates?“The impact on your wallet of the Standard & Poor’s downgrade of the nation’s credit rating is similar to what would happen if your own credit score declined: The cost of borrowing money is likely to go up,” the Washington Post explained in the aftermath of S&P’s decision.

S&P downgraded the U.S.’s top-notch AAA credit rating for the first time in history, moving it down one notch to AA+; the rating reflects a downgrade in S&P’s confidence in the U.S. government’s ability to repay its debts over time. It’s not clear, however, whether S&P’s downgrade will instantly effect rates, analysts say.

The 10-year Treasury note is considered the basis for all other interest rates. And “the downgrade could increase the yields on those bonds, forcing the government to spend more to borrow the same amount of money,” the Washington Post article notes. “Many consumer loans, such as mortgages, are linked to the yield on Treasurys and therefore would also rise.”

Watch this video with NAR Chief Economist Lawrence Yun for more information.

While consumers who have fixed interest rate mortgages will be immune to any changes in borrowing costs, home buyers shopping for a loan or those with mortgages that fluctuate may see a rise in rates later on, some analysts say.

Mark Vitner, senior economist at Wells Fargo Securities, told the Associated Press that he doesn’t expect the downgrade to drive up interest rates instantly since the economy is still weak and borrowers aren’t competing for money and driving rates higher. However, he expects in three to five years, loan demand will be much higher and then the downgraded credit rating might cause rates to rise.

Analysts are still waiting to see if the other rating agencies, Moody’s and Fitch, follows S&P’s lead in its downgrade of the U.S. credit rating. If so, the aftermath could be much worse, analysts say.

The debt deal reached by Congress last week was expected to save the U.S. from any credit rating downgrade. However, S&P said lawmakers fell short in its deal. Congress’ deal called for $2 trillion in U.S. deficit reduction over the next 10 years; S&P had called for $4 trillion.

Source: “5 Ways the Downgrade in the U.S. Credit Rating Affects You,” The Washington Post (Aug. 8, 2011); Questions and Answers on Standard & Poor’s Downgrading of U.S. Federal Debt,” Associated Press (Aug. 6, 2011); and S&P Downgrade Will Shake Consumer and Business Confidence at a Fragile Time, Economists Say,” Associated Press (Aug. 6, 2011)

Read More

Real Estate OK in Debt Deal But Risks Remain

Young Generation Hit Hard by Recession

Daily Real Estate News | Monday, August 08, 2011


The recession has hit the younger generation hard and is forcing them to delay many major life changes and purchases, according to a new survey. About 44 percent of Millennials — people aged 18 to 29 — say they will have to delay buying a home due to economic factors, according to a survey conducted by The Polling Co. Inc./WomanTrend.

About 75 percent say they have or will delay a major life change or purchase due to economic factors, and 30 percent say the bad economy has prompted them to delay changing jobs or cities. What’s more, nearly 25 percent say they will delay starting a family, and 18 percent say they will delay getting married.

Such delays by the younger generation has started to affect household formation. Many young professionals are moving back in with their parents to curb costs, which has caused household to grow in recent years after facing decades of declines.

“The impact of the poor economy, in human terms, has been devastating. This is especially true for young Americans, whose lives have been interrupted and dreams put on hold due to the lack of economic opportunity,” says Paul T. Conway, president of Generation Opportunity.

Source: “Young Americans Waylaid by Recession, Study Shows,” Los Angeles Times (Aug. 5, 2011)

Read more:

What Does Gen Y Want?

Commodity prices

Good news bears

Aug 8th 2011, 13:39 by The Economist online

A fall in commodity prices offers some cheer among the market gloom

THE equity markets may be suffering again as investors worry about sovereign debts and a slowing global economy. But the sell-off has also extended into the commodity market, particularly in oil: West Texas intermediate is trading at around $84 a barrel. This is a bearish story that is good news for western consumers. High raw-materials prices acted as a tax rise in the first half of the year; now they are falling the effect will be akin to a tax cut. There is just one caveat. The working assumption is that the recent sharp fall in the oil prices is caused by concerns about a slowing US economy; if it is really due to a sharp slowdown in emerging markets as well, equity markets will really have cause to worry.

Readers’ comments

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Welcome back to Earth !

BRL, you better find a parachute for you…

Deflation, your time has finally come, after 2.5 years of delay

We called it:…

We’re outperforming today as we did all of last week.

I remember in 2008 petroleum peaked in May for their highest price in history. The cause was never explained.

This price exceeded 2004 levels when the Gulf refineries were smashed by a series of Hurricanes notable Katrina and Rita. The prices exceeded the outbreaks of Gulf War 1 and 2 with Iraq and even the 9/11 attacks. The price of oil exceeded Supertankers being attacked by terrorist teams, Iran mining the critical choke point of the Strait of Hormuz where 40% of World travels, Putin’s energy cut offs, or raging piracy off the Somalian coasts.

I want to propose an actor and a plot. Follow the Money. Who has the Wealth and Power and the Means and Motive? The world’s largest exporter of oil is Saudi Arabia.

And in 2008 they saw an opportunity to influence the election of the most powerful office in the world. The Saudis grew tired of Bush and the Republicans. And the Republican Presidential Candidate McCain seem to want to open up a third war front on Iran. The other candidate was named Hussein and may prove to be a tribal brother.

And when your only tool is a hammer, every thing looks like a nail. By reducing oil imports by 5%, the Saudis can affect oil prices world wide instantly and to astonishing effect. The Saudis used their control over oil supply to jigger a shortage, which lead to price spikes 6 months before the election and precipitated the American Great Recession of 2008. John McCain argued their was no recession under Republican leadership and was soundly trounced in the election.

But this Recession snowballed into the Nov 2008 banking crisis, Lehman Bros downfall, the mortgage crisis, AIG insurance crisis, Automaker bankruptcy and the unemployment morass. All because of oil spikes.

An incumbent President’s greatest opponent is the state of the economy in an election year. And the Saudis are again using their hammer this time to LOWER the price of oil to brighten the American economy and re-elect President Obama. We are puppets on a string.

Unfortunately, the law of unintended consequence, the Recession they brought on in 2008 is still around and may be into a double dip. The Saudis are at it again doing their best to suppress the price of oil to promote a recovery.

Surprise, Money is Power! And Economic issues can influence Politics. Strange things happen in election years. Yes, even foreign actors can also pull some stringshmTzic3YT/

Your assertion that the Saudis influenced oil price to rout the Republicans in American presidential election is clever, but simply UNTRUE. The Saudis, or more accurately King Abdullah and the House of Saud, most likely WANTED warmongering hawks in the White House again, so that the US could wipe Iran and its nuclear programmes off the map. Wikileaks showed that King Abdullah, while posturing as an Islamic patriot who wanted the US to moderate its Mideast policies, privately encouraged GWB to attack Iran. This explains the confusion and the disorderliness with which the Saudi diplomatic corps to Washington D.C. have been conducting themselves vis-a-vis the Iranian issue.

And in this day and age, it is unwise to assume that the power to set the price of oil is centralized in Riyadh, Caracas or whatever. Thousands of traders tinker with the price of crude, and other governments can simply flood the market with their strategic oil reserves to drive the price down.

On this blog we publish a new chart or map every working day, highlight our interactive-data features and provide links to interesting sources of data around the we


Will Property Tax Increases Stifle Housing?

Daily Real Estate News | Monday, August 01, 2011


Despite property depreciation and high foreclosure rates, more county governments nationwide are either planning or have already approved property tax hikes this year.

U.S. markets moving in this direction include Atlanta, Boston, Chicago, and Tucson, along with 35 different municipalities in Utah. Higher tax payments for cash-strapped homeowners, in turn, may generate more foreclosures, while steeper purchase costs could reduce the pool of qualified buyers.

Source: “Will Property Tax Increases Stifle Housing Further?” RealtyBizNews, Donna Robinson (July 31, 2011)

© Copyright 2011 Information Inc.

Read more:

Time to Appeal That Tax Bill?

Hands-on efforts to raise a neighborhood’s value

Property owners take more active roles

The Atlanta Journal-Constitution

With metro Atlanta home values plunging by about one-third in five years, some owners are finding ways to add value to their neighborhoods.

In the Ashview Heights neighborhood of Atlanta, residents have worked to improve the appearance of properties to attract prospective home buyers. Gideon Ben Israel cuts down overgrown bushes earlier this month.

Johnny Crawford In the Ashview Heights neighborhood of Atlanta, residents have worked to improve the appearance of properties to attract prospective home buyers. Gideon Ben Israel cuts down overgrown bushes earlier this month.

Ashview Heights residents trim vegetation in empty lots during a neighborhood cleanup on Camilla Street earlier this month.

Johnny Crawford Ashview Heights residents trim vegetation in empty lots during a neighborhood cleanup on Camilla Street earlier this month.


Larry Carter took the prerogative to turn around the downtown Atlanta community he bought into by getting neighbors to help clean up dilapidated properties and help real estate agents with open houses so values would not keep dropping.

Warren Jolly, a developer as the CEO of the Providence Group, had a similar idea for his newer Sterling of Dunwoody condo neighborhood, where prices begin in the mid-$100,000 range.

When the real estate crash brought construction to a halt, he was left with a bare concrete pad among the four other buildings containing more than 150 units. He began to think and negotiate creatively with his financiers about finding a use for that land, and this month workers jackhammered the $500,000 pad into pieces, hauled it away and are turning the former eyesore into a neighborhood park with trees, a grilling area and an herb garden.

“It’s good to see something come to completion,” Jolly said, adding that it stabilizes the value in the community.

Don Wrenn, an owner in Sterling of Dunwoody, said seeing an empty pad would make potential buyers think the neighborhood was stalled. Turning it into a park sends a message that the neighborhood is finished, he said.

“And we as the homeowners are just absolutely thrilled,” he said.

Dan Forsman, the CEO of Prudential Georgia Realty, said homeowner associations are maintaining foreclosed houses.

In other places, neighbors are mowing grass of foreclosed homes next door.

“Quite frankly, they are doing it often out of necessity,” he said. “They have an investment in their community. They have some pride and want to see their community soar.”

A key to the idea is to get owners rather than renters into neighboring houses or condos, Forsman said.

“Owners will do that. Renters will not,” he said.

Jolly put it this way: “The only way to get value in a project today is to be able to sell in it.”

And homes sell easier in neighborhoods where it seems good things are happening, he said.

Carter believes the same thing for his Ashview Heights neighborhood along the city’s Beltline. Against relatives’ advice, he bought a fixer-upper on Fair Street near Morehouse College two years ago.

“It was a transient neighborhood. Not that many homeowners were living there,” he said. “I was looking for a house I could pay cash for.”

He bought one for about $10,000 and put another $10,000 and a lot of sweat into the renovation.

Some of the neighboring 1925-era homes were boarded up, attracting trash and growing weeds. Others had been caught up in mortgage fraud schemes, with prices bid up, then the houses abandoned when the market crashed.

About 200 houses are in the neighborhood; Carter said many are bank-owned, while others are by absentee landlords.

This summer, Carter re-energized the neighborhood association, got several real estate agents involved and started holding monthly neighborhood cleanups, including mowing lawns, hauling trash and painting house fronts to make them look better.

The morning cleanups are followed by afternoon open houses that neighbors publicize by handing out fliers, talking to friends and discussing on social media. They even have a Wells Fargo agent to qualify interested buyers, who can tour Carter’s five-bedroom house and others’ renovated homes to see the possibilities before looking at the houses available for sale. Many of the fixer-uppers remain in the $10,000 to $25,000 range, Carter said.

Shayla Hamilton, a Smyrna real estate agent working with the neighborhood, said the two open houses have attracted lookers from nearby colleges and urban pioneers. Two houses in the neighborhood are under contract, thanks to the open houses.

Carter said, “This is the only way we will see the growth in families and stabilizing our community.”

For Jolly, it was more of a bottom line than an emotional decision.

“We were looking for closure,” he said. “This is the best way to sell the units, and it’s the best for everybody. In today’s market and time, this is the best answer.”

New-Home Market Shows Signs of Stabilizing

Daily Real Estate News | Tuesday, July 26, 2011
New-home sales dropped in June, but a sharp increase in prices and declining inventories may be signs the sluggish new-home market is finally showing signs of rebounding, the Commerce Department reported Tuesday.

Sales of new homes dropped 1 percent in June, reaching an annual rate of 312,000 — less than half the 700,000 rate that most economists consider healthy for the new-home sector. New-home sales fell to record lows in the Northeast and were also particularly sluggish in the West.

The Commerce Department reported 164,000 new homes for sale in June, which is a record low. Taking into account June’s sales pace, the supply of new homes on the market dropped to a 6.3-month supply, the lowest since April 2010.

However, builders are starting to build more. Last week, the Commerce Department released a report that showed a rebound in June for new building permits — an indication for future building. Also, builders broke ground on more homes in June, with housing starts soaring 14.6 percent last month, marking a six-month high in housing starts.

Meanwhile, the median price of a new home increased to $235,200 in June, up 5.8 percent from May. Compared to June last year, the median price rose 7.2 percent. However, new-homes continue to be considerably higher than previously owned homes. The median price on existing-homes averaged $184,300 in June.

Source: “U.S. New Home Sales Fall in June, Prices Rise,” Reuters News (July 26, 2011)

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