Good morning to an open government and pending Federal Reserve meeting;
Residential Lending
Fruits of preparation & Smart Buying
Call us. Call now.
Delayed data from the government shut-down is here. Good News: The world didn’t end, unemployment did not skyrocket, and Christmas shopping is strong and better than last year.
We await watchfully, the coming Federal reserve meeting. Expectations have shifted to a rate cut, with commercial investors seeing little change in their investing strategies. Yet, after participating at a Real Estate Group, rate cuts will strengthen a strong Spring Buying Season.
What will be carefully studied: Rents and home values relative to the shortfall in housing availability – an unchanged fact. Some markets are hotter than others, meaning opportunity is there. Consensus: No recession, no real estate falling off a cliff. Be careful of the negative news biases.
Affordability conversation: This is a conversation of swirling words, blinding the real and possible opportunities. What is needed is to start with far more basic understanding to bring clarity to the confusion. That said, here is a short list of where we begin: 1) Income determines WHAT kind of home you buy, 2) savings determines IF and When you buy, and 3) your Vision.
Our current younger generations (being of the Baby Boomer gen) are choosing vacations, eating out, door-dash, etc. This is a choice shown in the data, before choosing to save for the purpose of home buying. Books are written on the mindset behind this paradigm. What are your thoughts? Call us.
Outcome: This pushes first-time buyers into buying at a later age cohort (speaking solely from the Nationwide data and demographics). In response, we offer helpful loan programs with low down payments. Many of these ‘first time home buyer’ loans have been around for many decades. Nothing new, simply an option for choosing home ownership sooner vs later. This helps with the “IF” part of the calculation mentioned above – but learning about the compounding benefit of saving, is even better – even regards the mortgage itself.
Always, let’s talk first: Above all else, real estate is highly sensitive to local market condition – buyers, sellers & location. It includes life styles, rent or buy, and valuation, etc. With this, most commentary concerns “nationwide” averages, thus limiting its helpfulness.
Also key: Gaining a thorough knowledge of lending strategies, how best to apply them, and when. It is how we best customize your lending choices. Good News: We have ready access to the full range of lending products needed for your success. Call! We are ready to help.
We are your lending & planning specialist, ready to help you fully understand lending.
Let’s talk. Let this be your first step to future success – your dream home.
General News from the Nationwide Landscape
1) Mortgage Rates: Trending sideways. A suggestion: It is a good time to talk refinancing opportunity. It is a worthy conversation. CALL.
For buyers, holiday season typically brings a more limited supply of available homes. Thus from the listings, many sellers want or need to sell. Good news: For those ready, this provides a great opportunity to buy – especially with lower rates – and fewer bidders. Spring increase is coming, when buyers multiply. Don’t miss out. Let’s talk.
My Best Advice: Make this month your month to prepare.
Fall is often a Buyers market and preparation key to the home you want.
We can show you how to buy now and still enjoy future rate cuts. CALL!
2) Economy:
A) Economic Activity: All signs point to our GDP (Gross Domestic Product), The total market value of all finished goods and services produced within a country’s borders. We continue to be in positive territory. A good sign.
B) Employment: Continuing the 200 – 250 K new claims weekly. This trend has been on-going for 4 years !!! In Spring 2023 continuing claims entered the 1.8 M range and moved into 1.9 M range earlier this year. 5 % increase. The long-term average unemployment rate is 4.3 % and we just went to 4.4 %. Another data-point: We currently have more people employed in the country than ever before.
C) Consumer Sentiment: How the data is collected has changed with the time. In 2024, University of Michigan survey measure changed from phone to online responses. The UoM survey fell 13 %, while other groups – CBCCI and NY Fed – only dropped 4 %. Key: Establish trend lines against 2025 buying season. Consumer sentiment often contradicts actual consumer spending behavior.
D) Inflation: PCE – the Fed’s main gauge choice – met expectations: 0.3 % on the headline and 0.2 % on the Core numbers. Staying under 3 %. A good number. Even more, UoM consumer expectations index shows the 2nd lowest inflation expectations over the next 12 months. Another counterpoint to falling consumer confidence.
Challenge: Food costs are up 30 % since COVID, yet our Farmers are under financial stress. Why? The middleman kept profits while “Farmer’s share” dropped to lows of 15 %. 85% goes to processing, packaging, trucking, advertising, and grocery store markup. The lowering of energy costs, taxes, and easing of regulations will help, but more is needed.
Challenge: Regular gasoline in California is $4.53 per gallon – 51% higher than national averages. It is not going lower. Why? California once had 17 operating refineries, even 11-12 a year ago. Now two are slated to shut down. Know: Importing refined gas costs extra $$$$.
E) Debt: Recent Federal Reserve policy reduces Quantitative Tightening by about 50 %, with half the payoffs going back into the Treasury market. This will provide needed liquidity. Yet, for actual mortgage rate reductions the QT continues to be a wind against lower mortgage rates. Don’t over anticipate changes to mortgage rates.
Residential Real Estate
Successes continue. Good news: Another successful effort to overcome a Notice of Default – NOD. This time for a local “fix and flip” party. The holdup was a City based in circular bureaucracy. After cost and time – Planning and Permits – actually retraced itself back to the original submitted plans, yet well exceeded the time available on the original financing. Outcome: Time took its toll and the original lender could not extend and filed on our client. But we found a new lender and project permits are now rolling again.
Another client: Working a startup, the client ran short on funding. We were able to quickly place funding to keep their venture goals in place and working. We are here to find answers.
Each example starts with a conversation, with no pressure. A first-tier conversation about needs and goals, with the objective of working thru various alternatives and options.
Call Today. Or, check my web page.
Set a time for a first conversation – at your convenience.
Back to the News:
1) Construction spending: Over-building has caught up – building more than actual demand. Thus, the future pipeline is lean and mean, with market demand again exceeding supply is anticipated. Active investing: Multifamily apartments are driven by job creation. Dallas # 1, Phoenix # 3, Charlotte # 10, due to and supported by added population.
2) Foreclosures and Delinquencies: MSM Headline confuse reality regarding Foreclosures and delinquencies – Headlines: Up 18 %. What’s missed: 1) FHA and VA zero to minimal down payment loans. 2) Loans coming off COVID moratoriums. 3) Actual delinquency rates are actually extremely low. 4) Actual foreclosure is ½%, while 90+ day is 1.6 %.
3) Loan spotlight: Only for specialists, if you seek to purchase a property with rough edges, we have mortgages with a 5 % down payment – including renovations. Limitations: Single-family homes, with max loan amount of 1.25 M. Let’s talk before acting.
4) Good News: In OR, TX, FL and NC, we offer the full range FNMA / FHLMC – and other traditional owner-occupied loans. More: We have alternative lending products available nationwide – except New York.
5) Home Values: Cotality showing a slight reduction in home values in October, with home prices still up about 1 % year over year. This close to zero indicates to me there are definitely locations with price declines being balanced out with locations still showing appreciation. With residential real estate the holy grail is ‘Location, Location, Location’.
NOTE: New Buyer Benefits Coming Now: 1) Higher loan limits announced for FNMA, FHLMC, VA, FHA. 2) 2- 4 unit Owner Occupied purchases – with 5 % down – thru FNMA and FHLMC. This now competes with FHA’s 3 1/2 % down payment, available for decades. 3) FICO may begin selling directly to credit aggregators – people pulling credit reports. Outcome: credit reports lower than $ 85.
Good news:
We are well equipped to help Buyers succeed.
Your professional expert is ready today. Call us.
Commercial Real Estate: Gaining the upper hand
Excellent investment opportunities are at hand.
Call now. Early Preperation Is Key – Start Now
Manufacturers: Great news for manufacturers as SBA has increased the loan limits 2X ! 10M for the debenture, meaning we can go up to 25 M with 10 % down for a project total of 27,750,000, on the SBA 504 loan program. Go small business, heart of the American spirit !
Rents: Rents continue to run flat to slightly down as the market continues to finish absorbing the supply increase of the past year or so. The market has absorbed most all the new supply, without drastic cuts in rents or dramatic increases in specials. Good progress for a market that brought on 2X normal levels of supply.
“Don’t wait to buy real estate, buy real estate and wait.” – T. Harv Eker
What makes us special – our work effort and caring style. We meet each person where they are in life. Offering effective guidance leading to solid, stable, and actionable options. All with a uniquely individual flavor. Give a ring today. Let us help build a solid path for you and those you care about. “Preparation and Patience” wins.
More Good News – What we Do!
Benefiting our clients, we develop relationships far and wide – over the decades. With each relationship comes different tools and more buying options. My “Associates” are one such tool. It brings a more comprehensive financial approach to your plans and strategies.
More tools:
– 1031 Exchange: Standard, construction, reverse.
– Privacy: An LCC business manager, signed papers for a very high, net-worth individual desiring name privacy.
– Pay Capital Gains or Not: A powerful legal strategy whereby capital gains taxes are deferred and remain fully available for a similar re-investment. The beauty: IRS-approved tool to shelter against a sizable income tax bills. Don’t miss out. Keep your money working for you. CALL Today.
Options are far and wide. It begins with YOU and our first Conversation.
..
We love to flush out all potential option with a full range of best choices.
Preparing for your tomorrow
Let’s start today.
We look forward to meeting with you, on the phone or face-to-face. Here we can talk through questions, thoughts, and solutions. All in the name of serving you best, with no surprises.
We know what’s most important: Those we have around us. Be well and be safe! Enjoy your family and friends, especially this special season of lights, great joy, and Christmas gifts.
