My Bellaire Blog

As you are listening to the national news you probably heard that the Pending Home Sales Index fell by 7.7 percent from December to January to hit its lowest level since the National Association of Realtors began tracking it in 2001.

No matter how dire the national news are, what matters to you as a seller (or buyer) is what is happening on your block!!  Real estate is LOCAL.  It’s like the weather: The average temperature in the US is no indication of what the weather is like in your neighborhood! 

To find out aout what is exactly happening on your block, sign-up for the free Market Snapshot real data newsletter.  It’s free, and you’ll be in touch with the pulse of YOUR market!  Just email Lucie@MyBellaireBlog.com no matter where you live.  The Snapshot is available nationwide, block by block…

Another exciting week, as rates were up down, up ,down, and finally down .25% from last week. Will we ever see 4.0%? I don’t know, but if it makes sense right now to buy or refinance, do it. That is my ongoing advice.

 There is rumor that a $15,000 homebuyer credit has been approved in the Senate. I have not been able to confirm , but I know it is looming. Currently, there is APPROVED a  $7500 tax credit that is given at the time they file their taxes. So, if a first time homeowner (who makes less than $75,000/year)  buys before July 2009, they can claim this credit for 2008 (if they file an extension) or on 2009 tax return (a whole year from now!). The credit offsets the tax they owe, and is required to be repaid over 15 years. So basically, and interest free loan. 

The NEW PROPOSAL posed to the Senate as a part of the stimulus package is: Increase the credit to $15,000 (or 10% of the purchase price if less), and available to ALL homebuyers, regardless of income or purchase history, and not require repayment. Wow. That would spur some buying for sure. I will just avoid thinking where that money will come from for now. Let’s just take a bat for the team on this one, and call it a good thing.

I saw an article online that said ‘Credit Standards Tighten’. Where has that journalist been? That is old news! Yes, it is true. There are more rules, more paperwork. But we just get through it all somehow. The funniest example I have is one of our investors now requires that any letters of explanation for the borrower are handwritten, not typed. Hint: loan officers have really good writing skills. But isn’t that funny? We are going to such extremes. But again, a bat for the team. When I am 80, I hope to look back on 2009 with a grin, and know that I helped a lot of people accomplish the American dream of homeownership.

Jennifer Hernandez

Vice President/Mortgage Consultant

Patriot Bank Mortgage

Office:    713-337-8400

Mobile:   713-446-7791

E-mail:    jennifer@patriotbankusa.com

Web:      www.loanwithjennifer.com

So where are the 4.5% rates, you are wondering? Your clients are asking, I am sure. They ask me too! Well, as you can see below, the rates are not far from that at  4.625%. But keep in mind, to get that, you MUST pay 1% origination fee (1% of the loan amount added to closing costs). If you want to ‘waive’ that fee, you can expect .625-.75% higher interest rate. That is a far cry from the .25% in the past. In other words, it makes sense to pay the 1% origination for many people, who expect to be in the home a long time. For those on a 6 year or less timeline, maybe not pay the point, and save your cash.

Why such a large spread between the 1 Origination and 0 Origination? I have heard several theories (a) lenders do not want to sell the higher coupons (rates), as they anticipate rates will go down, and their fallout will increase (b) they have been burned in the past paying originators the premiums on the back end, just to have early payoff in low rate markets, and (c) no one knows.  I pick C!  Does anyone really know?

Another rumor I have heard, is that some , if not all, of the big banks are losing money in their mortgage divisions. Big money. So they are hesitant to lower their rates because they are adding larger margins than in the past. To make it ‘worth it’ for them to stay in business. The margins from 03/04 when the rates were also at historic lows, and lenders could not print money fast enough, were turbulent times. Hiring frenzies, backlog in processing and fundings. The grass was not necessarily greener on the lenders’ side. Are they now remorseful and learning from their mistakes?

The FED meets this week for a 2 day meeting (Tuesday/Wednesday). For the first time, they will not consider lowering or increasing the rates. They will be concentrating instead on strategy to get the economy turned around.

Jennifer Hernandez

Vice President/Mortgage Consultant

Patriot Bank Mortgage

Office:    713-337-8400

Mobile:   713-446-7791

E-mail:    jennifer@patriotbankusa.com

Web:      www.loanwithjennifer.com

Happy New Year to all!  This long absence only reflects the busy-ness of my business.  Yes, real estate is doing well, and it has been given a jolt in December when the Fed lowered interest rates.  We have seen closings at 4.5% on a 30-year fixed, unheard off rates for the last 50 years.  That’s a powerful incentive for buyers and investors standing on the sidelines to get into the game…  As for mover-uppers, there are so many homes for sale that the savings you will get on your higher priced bigger home will more than compensate for whatever you think it will take to sell your existing home! 

Besides “divine”, another mantra for the new year could be ”2009 is my Inaugural Year”.  I am sure you have witnessed the events in Washington, which had a magical, almost “fairy tale” feel to it.  I suppose you have taken it all in, and hoped for changes in your own lives.  Well, if you keep thinking of 2009 as your Inaugural Year, it will carry you a long way to implement many changes that you have perhaps been thinking about.  So what are you inaugurating this year? Let us know!

Jennifer Hernandez from Patriot Bank Contributed this:

Well, on Friday I did receive confirmation from Santa that I have been good….rates were 4.625% on a 30 year fixed. (They were 4.5% for about an hour). This is for purchases. Refinances are a bit higher, so additional quotes apply. My feeling is that this WILL spark the interest of home buyers, and that activity in the new year will be renewed, and that it will spark the activity the government is hoping for. Why are rates so low? Who cares…take it for what it is, if I can be so blunt.

I would like to address builders. I predict that this is the next industry to be really affected by our economic downturn (recession!).  In fact they already are. Track builders mostly, who build specs. But custom builders too. They are being squeezed , and in some cases cut off, by banks . The strong builders are surviving, and are being required to put more equity in deals. Gone are the days of 100% cost lending. So, in turn, builders with inventory worried . They cannot get more lines to build more homes. Many will unfortunately go under. Spec lending is on hold with many banks, including ours. The banks just don’t want the risk. So I sit here and think what this could mean for consumers:  (a) Good deals on new construction (b) less inventory , and that will cause inventory homes to be more expensive. (c) less new homes, for now. ONLY MY PREDICTION that has no merit other than my own.

I hope you are enjoying the holidays! Have a great week, and keep saying your prayers. Its working.

Jennifer Hernandez

Vice President/Mortgage Consultant

Patriot Bank Mortgage

Office:    713-337-8400

Mobile:   713-446-7791

E-mail:    jennifer@patriotbankusa.com

Web:      www.loanwithjennifer.com

This is a contribution by Jennifer Hernandez:

Merry Christmas….oh, is it not Christmas yet? I thought the 4.875% 30 Fixed I saw this morning was Santa’s gift to me for being such a good girl this year. Then it vanished into thin air hours later, and we are at 5.25% . We should be careful what we wish for.  Rates are extremely low, but the economy is in the tanker. There are so many things making the yields (rates) of bonds go down on a daily basis. Remember that yields/rates down means prices are up. Prices up means that there is more demand for bonds. This happens when investors lose confidence in stocks, and they buy more bonds. For the mortgage coupons these days, no one seems to know what they are buying. The spreads between buying a point are unreal, anywhere from .500% – .750%. Never in 14 years have I seen that much of a spread. So save your money to buy that point down, otherwise, you will be paying dearly in the interest rate.

Some headlines for you, that affect the market in every way: Foreclosures have risen in every state in the nation (out just hours ago), foreclosures are forecasted to double in 09, California is on the verge of literally running out of money (all of Arnolds muscle flexing and charm means nothing now!), car giants are folding, we are officially in a recession (since Dec 07- ya think?), major corporate layoffs, terrorist attacks in Mumbai, changing regime in USA for the presidency, and to top all this off, there are pirates attacking ships off the coast of Somalia. Pirates? Are we living in some fairy tale now? Some days it sure feels like it.

But let’s look at the bright side! Gas is under $2.00/gallon, every consumer product imaginable is on sale, cars prices are rock bottom, and we have a new President that has given hope to the country, and seems like the world. There are right this very minute, 4,000 job openings in the Texas Medical Center that need to be filled. Houston is adding jobs! The Medical Center led us through the 80’s, and it will lead us through this, I can assure you.

I had a thought this week that should solve our country’s problems: why don’t we use part of lottery winnings to finance these bail outs!? The mega jackpot was $146 million! Who needs that kind of money anyway?

Have a great weekend! 

JENNIFER HERNANDEZ

Jennifer Hernandez

Vice President/Mortgage Consultant

Patriot Bank Mortgage

Office:    713-337-8400

Mobile:   713-446-7791

E-mail:    jennifer@patriotbankusa.com

Web:      www.loanwithjennifer.com

You probably remember the controversy surrounding the sale of part of Bolsover Street to a mid-rise developer a year-and-a-half ago.  The Sonoma project has been put on hold because of unavailable financing due the credit crunch.  However people who already put down a deposit on a condo will be refunded their money, which is good news in these shaky cicumstances.  The $1.6 million the City received for the street is hers to keep and will be reinvested in the neighborhood, more specifically for the reconstruction of Morningside St. between Rice and Sunset that is under way.  And if after 5 year the developer fails to build the project, the portion of Bolsover street that was sold to them reverts back to the City.  Now that’s a deal!  In the meantime, the lot sits vacant to the despair of area homeowners and the businesses who were forced to relocate when the building was torn down. Five years in this situation can seem like eternity!

5909/5959 Realty Ltd., a partnership led by Braun Enterprises, has purchased two Bellaire office buildings totaling 152,000 sf from The Matrix Group.

The buildings at 5909 and 5959 West Loop South are 96 percent leased with leases averaging 1,100 sf.

The buyer assumed a loan that has a high prepayment penalty and three years left on its term and brought 45 percent equity to the table.

Hopefully the new owners will do some updating/upgrading to the buildings that boast a great location but look quite dated on the exterior.

Despondency is a great fancy word for a reality that is not so glorious… Basically, you’re feeling down in the dumps.  You’ve got the blues.  Despondency is a little more elegant than depression but it is basically the same thing.  It is easy to let oneself step on this downward slope.  All you have to do is listen to the news of doom and gloom, feel the pinch at the check-out line, hear the predictions of looming bankruptcies and bailouts, learn of a friend who has been laid off…  Unquestionably, times are tough right now.  And this is a good time not to look at the big picture anymore.  Look at your own situation, focus on what YOU can do.  It does not matter what’s out there.

One principle I have learned recently is “WHAT YOU FOCUS ON EXPANDS”.  And I have very much experienced this in my business.  While everyone is sounding the bells for the choking real estate market, I have put my focus on one thing: Lead Generation.  And what I focused on has expanded my business. 

You can do anything you put your mind to, so where are you putting your mind?  If you need inspiration, watch these 2 videos and let’s talk after that… 

http://www.youtube.com/watch?v=GF9wo9sVn2c

http://www.youtube.com/watch?v=CaSh7QYd-GE

The City of Bellaire is celebrating “Centennial Holiday in the Park” on December 4^th.  Bring your family and friends to watch Santa arrive atop a blaring fire truck.  Then move your family to the gazebo, as Santa listens to the children’s wants and dreams.  And, of course, you don’t want to miss that precious moment by taking pictures.  Bring your own camera or purchase a professional photo, but make sure you don’t miss this memory.

 To welcome Santa, the City has arranged for 40,000 pounds of REAL snow.  With moon jumps, a petting zoo, pony rides, a lighted children’s train, food, crafts and entertainment from local schools, who could ask for a more entertaining event!  From toddlers to grown ups this event is something to put on your calendar and best of all…admission is free!

It all takes place:           Bellaire Town Square

                                    7008 South Rice Avenue

                                    5:30 – 8:30 PM

 P.S. Santa arrives at 5:45…don’t be late for this very important date!