Happy Halloween and what's this market?

Hello there,Hope this finds you well. By now you should have already turned back an hour on the clock and heading into the wonderful candy day we call Halloween. I know my kids are certainly excited and can't wait.Something else is scary right now. Yes, this market is topsy turvy and the experts keep contradicting each other. May thing is that there hasn't been a bubble bursting... even the media, who is screaming the most about the market, states that there isn't a bubble burst. To keep everyone interested, they say that it may... hint hint... so stay tuned for more news. Majority of the experts are stating that if media just calms down and report that the economy is doing relatively good and that interest rate is doing decent, then people will think differently. However, that doesn't sell the newspapers and magazines and the pay per click on the Internet. So, we'll keep going along and somebody will figure it out.Meanwhile, I've included some articles from Inman News regarding rates and consumer confidence as well as news that Austin Texas just had an awesome September. How about them Cowboys? lolThanks for your continued patronage. I hope that I can earn your business and also be referred to your friends and family. Take care and lets talk more soon! Until then, keep smiling and be happy!Best regards,Chun Liu, Real Estate Consultant for life!Team WOWWHEE.com at Keller Williams Coastal Properties(562)961-1409 www.WOWWHEE.com*************************Mortgage rates rise after Fed meeting --------------------------------------------------------------------------------Economist: Some real estate markets in for bumpy ride Thursday, October 26, 2006Inman News Mortgage rates edged up this week after the Federal Reserve decided it would not cut its key interest rate in the face of inflation worries, according to surveys conducted by Freddie Mac and Bankrate.com.In Freddie Mac's survey, the 30-year fixed-rate mortgage rose to an average 6.4 percent, up from 6.36 percent last week, while the 15-year fixed-rate mortgage inched up to an average 6.1 percent from last week's 6.06 percent. Points, which are fees charged by lenders for loan processing expressed as a percent of the loan, averaged 0.4 on the 30- and 15-year loans.The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) this week averaged 6.14 percent, with an average 0.6 point, up from last week when it averaged 6.11 percent. The one-year Treasury-indexed ARM averaged 5.6 percent with an average 0.7 point, up from last week when it averaged 5.57 percent. "At it's most recent meeting, the Federal Reserve again declined to raise rates for the third time, citing a slowdown in the housing market," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement. "For instance, the median price of both new and existing homes in September posted significant decreases. And some areas of the country may experience a few bumps up and down as the housing industry corrects itself in the coming months. "On a positive note, new-home sales in September came in at a higher-than-expected pace, while the number of homes for sale on the market dropped. This should help support housing prices going forward."In Bankrate.com's survey, mortgage rates climbed to a two-month high as hopes of any imminent Fed rate cuts were dashed. The average 30-year fixed mortgage rate moved higher to 6.46 percent, the highest since Aug. 29, and had an average of 0.35 discount and origination points.The average 15-year fixed-rate mortgage popular for refinancing increased to 6.16 percent, up from 6.1 percent last week, according to Bankrate.com. On larger loans, the average jumbo 30-year fixed rate stepped up to 6.7 percent. Adjustable rate mortgages were also on the rise, with the average 5/1 ARM gaining to 6.28 percent and the average one-year ARM climbing to 5.99 percent.Bankrate.com said members of the Federal Open Market Committee have talked tough on inflation in recent weeks, and a two-day meeting on Oct. 24-25 raised fears of further jawboning. While the post-meeting statement contained only subtle wording adjustments, the Fed has removed any likelihood of rate cuts coming soon. Bond yields and mortgage rates have increased as this realization has taken hold. Mortgage rates are closely related to yields on long-term government bonds.Fixed mortgage rates remain nearly one-half percentage point below the June peak, Bankrate.com reported. At the time, the average 30-year fixed mortgage rate was 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.46 percent, the same loan originated today would carry a monthly payment of $1,039. The following is a sampling of Bankrate.com's average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:New York - 6.45 percent with 0.14 pointLos Angeles - 6.53 percent with 0.48 pointChicago - 6.59 percent with 0.04 pointSan Francisco - 6.46 percent with 0.51 pointPhiladelphia - 6.39 percent with 0.45 pointDetroit - 6.57 percent with 0.03 pointBoston - 6.49 percent with 0.18 pointHouston - 6.41 percent with 0.57 pointDallas - 6.43 percent with 0.5 pointWashington, D.C. - 6.31 percent with 0.61 point********************************Best September ever for Austin real estate --------------------------------------------------------------------------------Steady demand for homes pushes prices higher Friday, October 27, 2006Inman News Austin, Texas, home sales set another record in September as single-family transactions rose 2.7 percent over their year-ago level, the Austin Board of Realtors reported.According to the latest Multiple Listing Service report, 2,341 single-family homes were sold last month, up from 2,280 sales in September 2005. Last month was the ninth consecutive month of year-over-year sales gains, according to statistics.The median price of single-family properties gained 3 percent from a year ago to a September record of $167,000, up from $162,000 in September 2005.The 8,203 active single-family listings in the MLS represent a 5 percent increase from September 2005, and were up from 8,137 in August. At an average of 58 days, the amount of time these listings sat on the market decreased by 15 percent, which is the shortest amount of time single-family listings have waited to sell since September 2001, when the average was 46 days."If you want proof that Austin is a real estate hot zone, all you have to do is look out your window," said ABoR Chairman John Rosshirt. "The construction cranes that have become fixtures around the skyline underscore the city's desirability. In North Austin, for example, the area around the Arboretum is the target of serious commercial development, and the home sales data complements that fact."The 1N section of Austin, which encompasses ABoR's northwest Austin neighborhood, posted particularly noteworthy numbers in September. The area's single-family home sales increased 47 percent to 69 and earned a median price of $240,000, an 18 percent increase from last year. Averaging 38 days on the market, these properties sat for 40 percent less time than they did in September 2005.The Austin Board of Realtors is a nonprofit, voluntary organization representing more than 8,500 licensed Realtors in Central Texas.*****************************Last week's credit market worries all reversed now --------------------------------------------------------------------------------Mortgage market commentary Friday, October 27, 2006By Lou BarnesInman News One week ago, the credit markets were worried by signs of a housing bottom, economic strength, inflation risk and the possibility that the Federal Reserve might have to hit us again. But, that's all reversed now: the 10-year T-note is down from 4.84 percent to 4.68 percent, with mortgages following from a high of near 6.5 percent to now under 6.25 percent.Stay centered here: we'll get the first data from October at the end of next week, and until then I'll be suspicious that this rate decline has room to run.The Fed's mid-week statement was the catalyst for sentiment change: after a recitation of economic and inflation dampers, the key line is, "Some inflation risks remain." (Not significant risks, just "some.") The Fed isn't considering an ease, but isn't going to tighten, either.Caution: the risk of rising inflation has abated, but the core rate is way above the target range. The background debate at the Fed, revealed in deep memoranda on Monday, is whether inflation can decline to the safety range with economic growth in the 2.5-3 percent range, or whether deeper slowing will be required. Also, is the noninflationary economic speed limit lower than thought?Thursday's housing news added to the sentiment switch. The same guys who shouted through September that the blown housing bubble would blast the economy then flipped to "worst-is-over" mode for two weeks, and are now back to blast. Their red flag was a 9.7 percent drop in the median price of homes sold.Be careful out there: the home-price decline came from a change in the mix of sales and says nothing about the value of an individual home anywhere. Stick with the midline of housing: the slowdown has not bottomed, and it's not in a downward price spiral, either. As a national matter, housing is entering a long-term flat patch, one not so much damaging the economy as not adding stimulus -- so far. Today we got the last leg of the bond rally on news that third-quarter GDP had grown only 1.6 percent. Growth that slow has bond optimists/economic ghouls pleased at the thought of rising unemployment, the key element for inflation reduction and Fed rate cuts.Pull on those reins for just a sec: consumer spending in the GDP report rose 3.1 percent, which was better than the prior quarter, and the weakness in GDP was overstated by statistical footsie involving the trade deficit and inventories. Orders for core capital goods rose a solid 1.1 percent in September, 11 percent year-over-year. If the economy has slipped onto a new slope of slowdown, we'll see it in the payroll and unemployment data due next Friday. Surveys show a very cranky nation, with 65 percent saying the economy is lousy, but I think the explanation is acute competition with foreign labor. Businesses are thriving, profits are huge, but the money isn't percolating to the work force. The unemployment rate is all the way down at 4.6 percent -- jobs are plentiful, but households feel they are on a hand-to-mouth edge. One way to interpret the on-edge sensation is that it's fragility. Housing is gone as a stimulus and if anything goes wrong with the consumer, that's all she wrote. At the moment, Federal Reserve Chairman Ben Bernanke's ongoing rate pause (to which I was opposed) looks like genius.Many are asking if the election will have market impact. Not in the slightest. Every bond trader holds all politicians in equal contempt. Two other news items won't move markets, but are worth the historical perspective: First, 90 percent of households in Vietnam today have TV sets, and the national fad is game shows. Second, Saddam Hussein from his jail cell begged all Iraqis to stop killing each other.The virtues of patience are easy to miss, and not just at the Fed.Lou Barnes is a mortgage broker and nationally syndicated columnist based in Boulder, Colo. He can be reached at lbarnes@boulderwest.com.******************************Consumer confidence improves in October --------------------------------------------------------------------------------But price uncertainty keeps home-purchase plans on backburner Friday, October 27, 2006Inman News Consumer confidence recorded its eighth-largest monthly gain in the October 2006 survey from the University of Michigan as consumers looked more positively on the pace of economic growth. "Declines in gas prices sparked the initial gains in late August, but the more substantial October gains were driven by the expectation of an improved pace of economic growth, larger wage gains and a low unemployment rate during the year ahead," according to Richard Curtin, the director of the University of Michigan's Survey of Consumers. Not all aspects of future economic prospects were positive. Although inflation has improved due to declines in gas prices, consumers remain concerned that an elevated inflation rate will persist during the year ahead, and consumers widely anticipate additional hikes in interest rates next year. "Despite a continued downturn in housing during 2007, the data indicate a 3 1/4 percent growth rate in personal consumption spending during the year ahead," noted Curtin.Home-price declines were mentioned by more consumers than any time during the past 15 years."Consumers remain uncertain about how much more home prices might fall and therefore reported their continued reluctance to purchase a home any time soon," Curtin said. While the data indicate continued declines in home sales well into 2007, the extent of the housing downturn may not be as severe as previously anticipated.The Index of Consumer Sentiment was 93.6 in the October 2006 survey, up from 85.4 in September, and nearly 20 points above last October's Katrina-depressed reading of 74.2. The Index of Consumer Expectations, a closely watched component of the Index of Leading Economic Indicators, rose to 84.8 in October, up from 78.2 in September and 63.2 in October of 2005. The Current Economic Conditions Index rose to 107.3 in October, up from 96.6 in September and 91.2 in October of 2005.When asked to describe what news they had heard of recent economic changes, the highest proportion in two years cited favorable developments, with more frequent references to increased employment, lower prices, and a surging stock market. Consumers expected the economy to improve, with the majority expecting good times in the economy during the year ahead, twice the level recorded last October. The renewed economic strength prompted consumers to increasingly abandon their prior expectations that unemployment would rise.Higher interest rates were also expected to result from the renewed economic strength as well as a persistently high inflation rate. "Two-thirds of all consumers now expect interest rates to increase during the year ahead," noted Curtin.Vehicle-buying plans improved in October based on the expectation that vehicle manufacturers would again offer deep price discounts. More consumers made their favorable vehicle-buying plans contingent on price discount than any time since the "employee discount" deals were offered in 2005. "Given current inventory levels, manufacturers will find it hard to avoid a return to deep discounting," Curtin added. This is especially true given the apprehensions among consumers about purchasing vehicles with low fuel efficiency, concerns that are more frequent among households most likely to purchase new vehicles.********************************Chun Liu / Team Wowwhee.Com
chun@wowwhee.com
www.wowwhee.com
(562) 961-1409(562) 961-1400 ext1409