I have posted a chart for Contra Costa County Real Estate Interest Rates from December 2001 through December 2007. This chart uses a 12-month moving average of data.
How to read this chart: when the market momentum reading falls from above the "0" line to below the "0" line, it signals that interest rates are trending down, which is a good sign for the real estate market. The Campbell Method uses trends in interest rates not as a key predictor of real estate trends, but as an indicator when the prevailing trend of the market is likely to get stronger or weaker.
This chart is one of five key real estate indicators called "Vital Signs" used to track local real estate market trends. Interest rates is Vital Sign #5.
"The Campbell Method" is a proven system for buying and selling real estate for maximum profits. Based on five key real estate indicators- called "Vital Signs" - The Campbell Method is a clearly defined approach to real estate investing that shows you how to anticipate the peaks and valleys of real estate cycles with incredible accuracy. These Vital Signs act as "leading indicators" and give you as much as 3 to 6 months advance notice to the direction real estate prices are likely to take, long before it becomes obvious to the general public.
I recommend that you purchase and read the book "Timing the Real Estate Market"- Robert Campbell. Log on to http://www.realestatetiming.com/ to learn about The Campbell Method, purchase the book and Market Momentum software.
Here is what Timing the Real Estate Market shows you...
How to identify the best time to buy a home- and the best time to sell
How to maximize real estate investment profits - and avoid losses
How to identify the sweet spot in real estate cycles - where the prices can go full throttle through the roof
How to identify the four stages of all real estate cycles - and position yourself to have an overwhelming advantage when you buy and sell
How to read the signals that tell you when the market is about to change
How to avoid real estate's single biggest mistake
Ten cardinal rules to follow - that guarantee optimal real estate success
Why economists and market forecasters are usually dead wrong.
Tuesday, February 12, 2008
Contra Costa County Real Estate: Market Momentum Chart: Mortgage Interest Rates December 2007
Contra Costa County Real Estate: Market Momentum Chart: Foreclosure Sales December 2007
I have posted a chart for Contra Costa County Real Estate Foreclosure Sales from December 2001 through December 2007. This chart uses a 12-month moving average of data sourced.
How to read this chart: when the market momentum reading falls from above the "0" line to below the "0" line, this signals that the trend in foreclosure sales changes from an uptrend to a downtrend. Fewer foreclosure sales are a positive sign for the market and the local economy.
When the marketing momentum reading climbs from below the "0" line to above the "0" line, this signals a trend in foreclosure sales has changed from a downtrend to an uptrend. A negative sign for a weakening local economy.This chart is one of five key real estate indicators called "vital signs" used to track local real estate market trends. Foreclosure sales (REO's) is Vital Sign #4.
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"The Campbell Method" is a proven system for buying and selling real estate for maximum profits. Based on five key real estate indicators- called "Vital Signs" - The Campbell Method is a clearly defined approach to real estate investing that shows you how to anticipate the peaks and valleys of real estate cycles with incredible accuracy. These Vital Signs act as "leading indicators" and give you as much as 3 to 6 months advance notice to the direction real estate prices are likely to take, long before it becomes obvious to the general public.
I recommend that you purchase and read the book "Timing the Real Estate Market"- Robert Campbell. Log on to http://www.realestatetiming.com/ to learn about The Campbell Method, purchase the book and Market Momentum software.
Here is what Timing the Real Estate Market shows you...
How to identify the best time to buy a home- and the best time to sell
How to maximize real estate investment profits - and avoid losses
How to identify the sweet spot in real estate cycles - where the prices can go full throttle through the roof
How to identify the four stages of all real estate cycles - and position yourself to have an overwhelming advantage when you buy and sell
How to read the signals that tell you when the market is about to change
How to avoid real estate's single biggest mistake
Ten cardinal rules to follow - that guarantee optimal real estate success
Why economists and market forecasters are usually dead wrong.
Temporary Loan Limit Increase for FHA...Here are the facts
H.R.5140 is also known as the Economic Stimulus Act of 2008 (Enrolled as Agreed to or Passed by Both House and Senate). The high cost real estate markets like California and the San Fransico Bay Area will be the primary beneficiaries of the increase in FHA loan limits to stimulate the home purchase and refinance activity.
Here are the facts:
SEC. 202. TEMPORARY LOAN LIMIT INCREASE FOR FHA.
(a) Increase of High-Cost Area Limit- For mortgages for which the mortgagee has issued credit approval for the borrower on or before December 31, 2008, subparagraph (A) of section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)(A)) shall be considered (except for purposes of section 255(g) of such Act (12 U.S.C. 1715z-20(g))) to require that a mortgage shall involve a principal obligation in an amount that does not exceed the lesser of--
(1) in the case of a 1-family residence, 125 percent of the median 1-family house price in the area, as determined by the Secretary; and in the case of a 2-, 3-, or 4-family residence, the percentage of such median price that bears the same ratio to such median price as the dollar amount limitation determined for 2008 under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a 2-, 3-, or 4-family residence, respectively, bears to the dollar amount limitation determined for 2008 under such section for a 1-family residence; or
(2) 175 percent of the dollar amount limitation determined for 2008 under such section 305(a)(2) for a residence of the applicable size (without regard to any authority to increase such limitation with respect to properties located in Alaska, Guam, Hawaii, or the Virgin Islands);
(a) except that the dollar amount limitation in effect under this subsection for any size residence for any area shall not be less than the greater of: (A) the dollar amount limitation in effect under such section 203(b)(2) for the area on October 21, 1998; or (B) 65 percent of the dollar amount limitation determined for 2008 under such section 305(a)(2) for a residence of the applicable size. Any reference in this subsection to dollar amount limitations in effect under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act means such limitations as in effect without regard to any increase in such limitation pursuant to section 201 of this title.
(b) Discretionary Authority- If the Secretary of Housing and Urban Development determines that market conditions warrant such an increase, the Secretary may, for the period that begins upon the date of the enactment of this Act and ends at the end of the date specified in subsection (a), increase the maximum dollar amount limitation determined pursuant to subsection (a) with respect to any particular size or sizes of residences, or with respect to residences located in any particular area or areas, to an amount that does not exceed the maximum dollar amount then otherwise in effect pursuant to subsection (a) for such size residence, or for such area (if applicable), by not more than $100,000.
(c) Publication of Area Median Prices and Loan Limits- The Secretary of Housing and Urban Development shall publish the median house prices and mortgage principal obligation limits, as revised pursuant to this section, for all areas as soon as practicable, but in no case more than 30 days after the date of the enactment of this Act. With respect to existing areas for which the Secretary has not established area median prices before such date of enactment, the Secretary may rely on existing commercial data in determining area median prices and calculating such revised principal obligation limits.
Raising Conforming Loan Limits...It Ain't Over 'Till the Fat Lady Sings (Wall Street Investors)
I suggest cautious optimism for those of us in the real estate industry in high cost real estate markets like California and the San Fransico Bay Area. Here are two of the most common questions for the proposed conforming loan limit increases passed by Congress and expected to be approved by President Bush next week:
How will the new amounts be priced? The law impacts loans originated after July 1 of last year. So do you remember all those jumbo loans for $500 or $600 or $700k that were purchased by Citi, Chase, Wells, etc.? Per the proposed law, these loans can now fall under FNMA & FHLMC guidance. Owners (holders) of these mortgages are "testing the waters" in terms of pricing in the secondary market. If there is little investor acceptance, rates will stay high. If there is investor appetite, rates on these high-balance loans will improve. It is anyone's guess. Please note that the law "encourages" these loans to be securitized - it does not require it! So no one knows the answer yet. Time will tell if Wall Street investors are willing to purchase mortgage backed securities in high cost (high risk) real estate markets...
What is the schedule? President Bush needs to sign the legislation. That may happen this weekend, or sometime next week. I doubt any large investors will announce a policy until he actually signs the document. And even after that, pricing may be unknown due to questionable investor acceptance.
In the text of the proposed law, it mentions section 302(b)(2) of FNMA's charter. If you are curious, here it is: http://www.ofheo.gov/Media/Archive/docs/reports/fnma.pdf
Here is the exact text of the law:
SEC. 201. TEMPORARY CONFORMING LOAN LIMIT INCREASE FOR FANNIE MAE AND FREDDIE MAC.
(a) Increase of High Cost Areas Limits for Housing GSEs- For mortgages originated during the period beginning on July 1, 2007, and ending at the end of December 31, 2008:
(1) FANNIE MAE- With respect to the Federal National Mortgage Association, notwithstanding section 302(b)(2) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)), the limitation on the maximum original principal obligation of a mortgage that may be purchased by the Association shall be the higher of--
(A) the limitation for 2008 determined under such section 302(b)(2) for a residence of the applicable size; or
(B) 125 percent of the area median price for a residence of the applicable size, but in no case to exceed 175 percent of the limitation for 2008 determined under such section 302(b)(2) for a residence of the applicable size.
(2) FREDDIE MAC- With respect to the Federal Home Loan Mortgage Corporation, notwithstanding section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), the limitation on the maximum original principal obligation of a mortgage that may be purchased by the Corporation shall be the higher of--
(A) the limitation determined for 2008 under such section 305(a)(2) for a residence of the applicable size; or
(B) 125 percent of the area median price for a residence of the applicable size, but in no case to exceed 175 percent of the limitation determined for 2008 under such section 305(a)(2) for a residence of the applicable size.
(b) Determination of Limits- The areas and area median prices used for purposes of the determinations under subsection (a) shall be the areas and area median prices used by the Secretary of Housing and Urban Development in determining the applicable limits under section 202 of this title.
(c) Rule of Construction- A mortgage originated during the period referred to in subsection (a) that is eligible for purchase by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation pursuant to this section shall be eligible for such purchase for the duration of the term of the mortgage, notwithstanding that such purchase occurs after the expiration of such period.
(d) Effect on Housing Goals- Notwithstanding any other provision of law, mortgages purchased in accordance with the increased maximum original principal obligation limitations determined pursuant to this section shall not be considered in determining performance with respect to any of the housing goals established under section 1332, 1333, or 1334 of the Housing and Community Development Act of 1992 (12 U.S.C. 4562-4), and shall not be considered in determining compliance with such goals pursuant to section 1336 of such Act (12 U.S.C. 4566) and regulations, orders, or guidelines issued thereunder.
(e) Sense of Congress- It is the sense of the Congress that the securitization of mortgages by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation plays an important role in providing liquidity to the United States housing markets. Therefore, the Congress encourages the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to securitize mortgages acquired under the increased conforming loan limits established in this section, to the extent that such securitizations can be effected in a timely and efficient manner that does not impose additional costs for mortgages originated, purchased, or securitized under the existing limits or interfere with the goal of adding liquidity to the market.
Contra Costa County Real Estate: Market Momentum Chart: Mortgage Loan Defaults December 2007
I have posted a chart for Contra Costa County Real Estate Mortgage Loan Defaults from December 2001 through December 2007. This chart uses a 12-month moving average of data.
How to read this chart: when the market momentum reading falls from above the "0" line to below the "0" line, this signals that the trend in mortgage loan defaults changes from an uptrend to a downtrend. When fewer people have difficulty making their mortgage payments, this is a positive sign for the local economy.
When the marketing momentum reading climbs from below the "0" line to above the "0" line, this signals that the trend in foreclosure sales has changed from a downtrend to an uptrend. More and more people are having difficulty making their mortgage payments. This is a negative sign for the local economy and its real estate market.
This chart is one of five key real estate indicators called "vital signs" used to track local real estate market trends. Mortgage Loan Defaults (NOD's) is Vital Sign #3.
NOTE: when you see that Vital Sign #1, #2, and #3 all give signals to buy, you can now be 80%-90% confident that a major real estate upcycle is underway..jpg)
"The Campbell Method" is a proven system for buying and selling real estate for maximum profits. Based on five key real estate indicators- called "Vital Signs" - The Campbell Method is a clearly defined approach to real estate investing that shows you how to anticipate the peaks and valleys of real estate cycles with incredible accuracy. These Vital Signs act as "leading indicators" and give you as much as 3 to 6 months advance notice to the direction real estate prices are likely to take, long before it becomes obvious to the general public.
I recommend that you purchase and read the book "Timing the Real Estate Market"- Robert Campbell. Log on to http://www.realestatetiming.com/ to learn about The Campbell Method, purchase the book and Market Momentum software.
Here is what Timing the Real Estate Market shows you...
How to identify the best time to buy a home- and the best time to sell
How to maximize real estate investment profits - and avoid losses
How to identify the sweet spot in real estate cycles - where the prices can go full throttle through the roof
How to identify the four stages of all real estate cycles - and position yourself to have an overwhelming advantage when you buy and sell
How to read the signals that tell you when the market is about to change
How to avoid real estate's single biggest mistake
Ten cardinal rules to follow - that guarantee optimal real estate success
Why economists and market forecasters are usually dead wrong.
Breaking News...Congress Sends Economic Plan to President Bush...
Congress passed an emergency plan Thursday to stimulate the weak economy by providing rebates to most taxpayers, disabled veterans, the elderly and low-income people. Rebate checks could begin arriving in May based on 2007 tax returns.
The bill also provides tax relief for businesses to make new investments. The measure also temporarily raises the loan limit on Federal Housing Administration (FHA) insured loans and the Fannie Mae and Freddie Mac conforming loan limit up to $729,750 in high cost real estate markets like California and the San Francisco Bay Area.
The Senate acted after a week of political maneuvering with an 81-16 vote. The White House said Bush would sign the bill sometime next week. The package was the result of a rare bi-partisan cooperative effort.
There are concerns that by raising the conforming loan limits for Fannie Mae and Freddie Mac that the larger loans will place an additional burden on these Government Sponsored Entities (GSE's) which may hinder their ability to cover larger loan losses.
This additional potential burden may have a negative effect on loan and appraisal underwriting requirements in declining real estate market like California which could increase the cost of home loan financing and down payment requirements.
The conforming loan limit increases will apply to loans originated from July 31, 2007 and will expire on December 31, 2008. The limited time frame for the temporary loan limit increase should create a sense of urgency in slow real estate markets to encourage home buyers to take action and for homeowners to take advantage of refinancing into a more affordable loan.
Stay tuned to see what happens next after Bush signs the bill.
Contra Costa County Real Estate: Market Momemtum Chart: New Home Building Permits December 2007
I have posted a chart for Contra Costa County Real Estate New Home Building Permits from December 2001 through December 2007. This chart uses a 12-month moving average of data.
How to read this chart: when the market momentum reading climbs from below the "0" line - indicates a trend change has occurred from a downtrend to an uptrend. Increased demand for newly built homes. When the marketing momentum reading falls from above the "0" line to below the "0" line, this indicates a trend change in new home buildings has occurred-changing from an uptrend to a downtrend. Negative sign indicates decreasing demand for newly built homes.
This chart is one of five key real estate indicators called "vital signs" used to track local real estate market trends. New home building is Vital Sign #2.
"The Campbell Method" is a proven system for buying and selling real estate for maximum profits. Based on five key real estate indicators- called "Vital Signs" - The Campbell Method is a clearly defined approach to real estate investing that shows you how to anticipate the peaks and valleys of real estate cycles with incredible accuracy. These Vital Signs act as "leading indicators" and give you as much as 3 to 6 months advance notice to the direction real estate prices are likely to take, long before it becomes obvious to the general public.
I recommend that you purchase and read the book "Timing the Real Estate Market"- Robert Campbell. Log on to http://www.realestatetiming.com/ to learn about The Campbell Method, purchase the book and Market Momentum software.
Here is what Timing the Real Estate Market shows you...
How to identify the best time to buy a home- and the best time to sell
How to maximize real estate investment profits - and avoid losses
How to identify the sweet spot in real estate cycles - where the prices can go full throttle through the roof
How to identify the four stages of all real estate cycles - and position yourself to have an overwhelming advantage when you buy and sell
How to read the signals that tell you when the market is about to change
How to avoid real estate's single biggest mistake
Ten cardinal rules to follow - that guarantee optimal real estate success
Why economists and market forecasters are usually dead wrong.
