Columbia SC Real Estate and Homes for Sale

Is it just me, or do Fridays keep coming around faster and faster in the Columbia SC Real Estate Market? Maybe its because Im so young!

Any way, its time for our “Mortgage Market Week in Review.” Were going to focus on a couple of main topics for today which all Impact Columbia SC Real Estate:

Jobs - the ADP report came out on Wednesday and had some relatively positive news. That brought a lot of people in the markets thinking that the jobs report that came out this morning would be a lot more positive than the markets had been expecting. Well, we got to this morning and it came out “moderate.” The market had expected 70,000 losses and we only got 51000 losses. We had expected 5.6% unemployment and we got 5.7%. So, not too bad, but not too good either. However, Ive read some technical analysis that said that due to some accounting regulations (known as the birth death of businesses adjustments) these numbers are probably overstating things to the positive. That means that next month, these numbers will probably get revised downward.  Jobs are strong within the Columbia SC Real Estate market area.  Business may be picking up some.  Keep your fingers crossed.

Losses - talk about missing a target here, wow. General Motors announced that they lost $15 billion this quarter. Think about it, thats a lot of money. Even if you take out the “one time” expenses, that is still a LOT of money (like maybe $6 billion, I think the number was.) I read today that GM has now “eaten up” all of their profits that they have made since 1985. That means that a profit and loss statement for the last 23 years for General Motors would end up with a big fat $0. In addition to them, Deutsche Bank announce a 64% drop in profits and Merrill Lynch announced some staggeringly negative numbers too.

House prices made a lot of news this week. Alan Greenspan was talking about them and several others also made a lot of noise about whats happening with house prices. Check out the chart here to give you a good flavor of the regionality of housing prices and how not all areas are seeing the same numbers.  Pricing your Columbia SC Real Estate Home properly has never been more important.

The Housing Bill - the Congress passed it last weekend and President Bush signed it on Wednesday. Let me give you a couple of bullet points about it:

1. Fannie and Freddie now have the ability to write an unlimited check off the U.S. Treasury in order to keep going.
2. The rules are in place to give FHA the ability to help more troubled borrowers but a lot of people have serious doubts as to how many it will help.
3. The Down payment assistance programs that are bringing astoundingly higher default rates on FHA loans are being eliminated. Click here to read some more of my thoughts on those.
4. The capital gains tax rules have changed based on how long youve owned the house vs. how long its been your primary residence.
So, a mixed bag of results and I think that more and more people are feeling that this housing bill, other than saving Fannie and Freddie might not be all that much to count on.

Along the Fannie and Freddie line, there are more and more people who are starting to talk about the “what happens after this is over” in terms of Fannie and Freddie. What sort of mortgage industry do we want to have and should the government be involved. Going to be an interesting discussion.

Rule Changes - while I cant speak for any other banks, I fully expect that others are doing the same thing. We got the announcement on Wednesday that on 2nd mortgages, the highest well go is an 85% loan to value. That means that the age of an 80/10/10 or an 80/15/5 is gone. Can you still buy a house with less than 15% down? Absolutely, but it has to be with PMI. Why are we doing that? Im merely throwing my own spin on it, but Im guessing that its for 2 reasons: 1) House prices havent bottomed yet and we dont want to be upside down on the second mortgages and/or 2) We want to “share” the risk with the PMI companies rather than take it all ourselves.

A couple of other “reports” came out this week. The GDP reports came in better than last month but weaker than expected. Also, consumer confidence was up. Why was it up? I think theres a very simple reason for it. On your way home after reading this, look at the sign in front of your local gas station. Does the number start with a 3 or a 4? Gas and oil prices are down and that makes everyone feel better.

In all of this turmoil, the mortgage market ended up the week down just a “smidge” (technical term) compared to last week. Ill continue to keep you informed, please call or e-mail any time I can be of help.

Thanks!

Tom Vanderwell