Forecasting interest rates is very difficult. I haven’t had much success at it. The first challenge is to figure out what the market would do if left to its own devices. With the plethora of variables in play, that’s no easy task. Further complicating the problem is the federal reserve which will often intervene to make interest rates do the exact opposite of what a natural market would do. It’s very difficult to figure out when the federal reserve will move in and mess everything up. For example, when the housing bubble burst, a free-market would have taken mortgage interest rates sky high. Mortgage rates were too low during the bubble as risk was mispriced. After prices turned south, the [Read More...]

Repurchase agreements are driving the tightening of credit standards. Until the economy strengthens and house prices start moving up on a sustained basis, delinquencies will remain high, and the threat of buybacks will tighten standards further. realtors will complain, but since their money isn’t at risk, their complaints will be ignored.  Despite realtor pleas, mortgage lending standards will continue to tighten realtors never want to see a deal die because the buyer can’t get financing. Lawrence Yun, chief economist for the NAr, recently lamented about “unnecessarily tight credit standards” and “frictions related to obtaining mortgages.” In a realtor’s world view, there are no unqualified buyers. Back during the height of the housing bubble, the lending community agreed with them, and [Read More...]

Irvine: Turtle Rock Overview Median home price is $905,000. Based on a rental parity value of $689,000, this market is over valued. Monthly payment affordability has been worsening over the last 2 month(s). Momentum suggests worsening affordability. Resale prices on a $/SF basis increased to $401/SF to $453/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates declined $50 last month from $2,700 to $2,650. Rents have been rising for 4 month(s). Price momentum suggests rising rents over the next three months. Market rating = 2 Proprietary Irvine Housing News home purchase analysis 6 WHITEWATER Irvine, CA 92603  $528,000 …….. Asking Price $730,000 ………. Purchase Price 5/13/2005 ………. [Read More...]

Irvine: Turtle Rock Overview Median home price is $1,839,000. Based on a rental parity value of $600,585, this market is over valued. Monthly payment affordability has been worsening over the last 1 month(s). Momentum suggests unchanging affordability. Resale prices on a $/SF basis increased to $401/SF to $439/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates declined $166 last month from $2,700 to $2,533. Rents have been rising for 3 month(s). Price momentum suggests unchanging rents over the next three months. Market rating = 2 Proprietary Irvine Housing News home purchase analysis 37 RAINBOW Rdg Irvine, CA 92603  $485,000 …….. Asking Price $202,500 ………. Purchase Price 10/8/1997 [Read More...]