Good morning to Summertime;
Residential Lending
Summer: Fruits of preparation & Smart Buying.
Call us. Call now.
MSM continues to hype the headlines with politics. Effects on most of us: Nil. Good News: There are things worthy to share at our barbecues. Rent-to-Own housing developments are more and more noticed amongst new homebuilding. Upwards of 10 % of new construction is targeted for “rent-only” subdivisions. Less concessions, lower material finish costs, and buyers generally, with better loan numbers (credit, income and assets) – thus less financial worry.
For investors: The potential for more consistent management, better property condition, while the overall market, continues to delivering less new supply than demand – most markets.
See “My Perspective” below, for more.
Important Points:
1) Interest Rates: Chopping sideways seems appropriate. But what does this say: Congress, cut deficit spending – NOW. Yet, knowing Congressional politics and ego, we do not expect needed changes. Outcome: Continued pressure to keep rates higher, longer. We don’t trust the Fed and they don’t trust Congress. Note: With trust, the Feds will increase liquidity, as well.
Best advice: Make this month your month to prepare.
Summer Buyers speaks to good timing and ready Sellers.
WE can show you how to buy now and enjoy rate cuts later. CALL!
2) Economy:
A) Economic Activity: GDP: Q1 down 0.3 %. This is the first negative in 3 years and closes out Biden economy. PCE: Overall and core numbers flat: 2.2 % and 2.6 %, respectively. Good news. Personal spending is up, wages are up, and savings rate is up. A good trio of data.
B) Employment: Wages steady and up about 4 %, year-over-year. Consumer sentiment continues trending downward, as savings rates are up. Good News: Net wages finally catching up with wages lost to inflation. Sadly, for some Fed members, this is an excuse to not cut rates.
Question: Is BLS (Bureau of Labor Statistics) playing with our hearts? Once again, a number far higher than estimates of other groups. Don’t worry, after the market reacts, the real numbers will come to light. Currently, BLS states a lack of employees. However, their numbers have been drastically overstated, over the past couple of years.. Lack of employees, is a place to hide.
Consider: Last month’s employee numbers. They were overstated by 95 K jobs. This from the original 139 K posted. Such errors are from internal modeling, not the work done by the people. Sadly, this is history repeating itself and until this methodology is changed, don’t be surprised to see more downward revisions, even by 50 %. As for your investment plans, be patient and not over react.
3) Residential Real Estate: “New” homes sales April – nice jump up 3 % year-over-year.
April “Existing” housing was down slightly. Yet, considering the underlying numbers, is it really so BAD? Though down 0.5 %, M-O-M – in a month typically showing “higher” – the confusion of tariff talk, spending bills, and no hopeful cut in rates, brought a wait-and-see approach to buying. Bottom Line: None of this matters to the far more fundamental question: Can you meet your monthly bills? If yes, no problem. If not, a potential problem. In both cases, we are here to help. Give us a call. We can help bring clarity to MSM fears, while providing valuable insights, strategies, and possible solutions best fit for you and your unique situation.
Good news:
We are well equipped to help Buyers succeed.
Your professional expert ready to start today. Call us.
4) Commercial Real Estate: Excellent investment opportunities are at hand. Call now. Let’s start preparing now. Gain the upper hand. Call today. Let’s start.
Key market: Recent headlines love to declare a faltering in apartment vacancy rates. Yet, actual occupancy is back up to 2016 and 2017 levels. This without CoVid stimulus money or rules of occupancy. Current numbers are a bit below pre-Covid, 2018.
5) Inflation Perspective: Good News: Numbers are softening, resulting from high interest rates and increase in supply. Now the question: Is the Federal Reserve late to the game? We should expect inflation to continue to soften, as energy costs fall. Yet, without cuts in deficit spending by Congress, likely Powell and the Fed will continue stubborn. Elections matter.
Note: Clarity to Tariffs – headlines, without understanding. Consumers define the price points that clears the market. If the consumer says NO. Prices will lower to clear the market, with profit margins shrinking. The goal is to level the playing field. This will: 1) increase US manufacturing and secure future supply, 2) help decrease US deficit spending and bring about lower rates. 3) Level the playing field, making us more competitive in foreign markets. And add to this: Falling energy costs will cut shipping costs, offset tariffs, and reduce inflation.
My Perspective:
Continuing my thoughts regarding investing in residential homes. It can prove to be a great way to invest, with more and more people considering this investment alternative, while delaying an owner-occupied residence. Both can be motivated for similar reasons – uncertainty of one’s career path, how it might affect one geographically, or state of one’s personal relationships. How one choses the best investment – owner occupied or residential investment – is part of our investment guidance counseling. We can work with you and help layout a plan for investing in your future, one providing flexibility and encompassing today and tomorrow.
Good News: We show you how to overcome Main Street Media fears of debt, schools loans and other issues not matching most of the qualified public. Another benefit: The lending market does allow for loan qualifications – needed to purchase investment homes – to not impact magical debt-to-income ratios required for owner-occupied homes. We have options.
“Don’t wait to buy real estate, buy real estate and wait.” – T. Harv Eker
Our work, what makes us special, is meeting each person where they are, offering effective guidance to solid, stable, and actionable options. All with a completely individual flavor. Give a ring today and let us help build a solid path for you and those you care about.
QUESTION: Buy Now or Wait for Lower Rates
California market: Homebuyers yet on the sidelines, typically wait for a drop in interest rates. Others want more choices and alternatives. Interestingly, Mom and Pop investment property owners (3 – 10 doors) are continuing to increase in holdings – roughly doubling the market share of purchases. Renters: They too, like choices and will often live in the most affordable and preferable circumstances, many seeking SFR or duplexes – not apartments. M&P serves this market the most – not Blackstones, as often reported.
Property appreciation: Yes. Due to limited number of homes for sale, plus too few “new” homes under construction, leaving an imbalance of supply vs. demand. Outcome: Anticipate continued property appreciation. Question: Dream home found, Buy now or wait for lower rates? We can show you how to buy today, and take advantage of lower rates, later.
Is this your dilemma? Let’s talk. Don’t lose the home and location you desire. Here’s what we offer. We develop a detailed analysis and build a mortgage-options plan custom fit to your family finances. We show you how to take advantage of lower rates, if they happen.
Sound good? Call. Let’s analyze the cost of waiting vs buying, now. This is a benefit few in the mortgage world are able – or willing – to provide. Few will take this extra step. I do, because I care about your today and tomorrow. I look forward to hearing from you.
Call Today. Or, at my my web page, set a time for a first conversation – at your convenience.
More Good News – What we Do!
This month, let’s spotlight another option extended to our clients. Using a common tool for an un-common retirement plan, using a reverse mortgage. A recent client elected to enjoy some retirement in another State. Not having enough cash, we used a reverse mortgage to provide for a payment-free new home. We offer more than the common options.
Have an idea not easy to pursue – Call us. We love to have conversations to flush out every potential option and method, offering you a full range of best choices.
“It starts with our first conversation”
Preparing for your tomorrow
Let’s start today.
With all the financial talk, we look forward to being an open forum where you can talk through questions, thoughts and solutions. All in the name of what is best for you.
And what is most important: Those we have around us. Be well and be safe! Enjoy your family and friends, with thankfulness and gratitude.
