Linking ≠ endorsement.
The problem is buyers want to find the house first, and then they think they’ll work out the financing, Jenson says. But the problem is the really good deals on these bank-owned, they go quick — and the buyer doesn’t necessarily have time to try to work out the financing afterward. They need to work that out first.
The bulk-buying easy pickings have been picked. That doesn’t mean that the institutional, all-cash buyers have picked over everything. It just means it’s more difficult to find the deals and to bid properly.
Buying “as-is” can easily sink a tightly budgeted, one-off buyer if hidden repairs eat up the anticipated profit margin. Be extremely careful buying anything where you can’t get inside to do a full inspection with the utilities on. Offers on REO’s will likely not be entertained if they contain any contingencies at all. On other properties, you can attempt to require a seller warranty regarding, for instance, equipment that you can’t test until the utilities are turned on.
↑ US mortgage volume ekes out gain on tiny drop in rates
“Europe is a wet blanket on domestic interest rates. The proportions may not be epic, but they’ve been utterly persistent…But the good news is that until something changes about the situation in Europe, it would be very hard for rates to embark on any significant move higher.”
Graham says it’s possible for rates to get back into the high 3’s, if a Treasury rally holds ground, but it usually doesn’t and didn’t this week. Just the possibility of lower rates, however, is a lot more than anyone might have hoped for nine months ago, when the expectation was that rates would cross 5 percent, not 4.
“…anyone…”? We said they’d not go up. We thought they might break into the 2’s. We were sure they’d break back into the 3’s, and they did for a bit. Some lenders are in the 3’s now. Those who thought they’d shoot way up into the 5’s long ago weren’t paying close enough attention to, or were simply misunderstanding or underestimating, labor slack and Bernanke/Yellen.
↑ [Excellent, very highly recommended] EconoMonitor : EconoMonitor – High Public Debt, Stagnation, Deflation and Unemployment: Policy Errors and a Way Forward
This note reviews monetary and fiscal policies adopted by Japan, the United States and Eurozone periphery countries during the global financial crisis and subsequently. These countries all experienced similar economic problems; high public debt burdens, the deflation tendency, credit traps, inadequate aggregate demand and high unemployment.
↑ L.A.-O.C. housing market is least affordable in U.S., Zillow says – LA Times
Los Angeles and Orange counties are the least-affordable housing market in the country. And it’s likely to only get worse.
That’s according to new figures due out Thursday from real estate website Zillow, which found that renters here need to pay more of their income to afford a place to live than anywhere else in the country.
Adding to the affordability woes, Zillow is predicting that home prices here will climb 5.7% in the next year, outpacing likely growth in most people’s paychecks.
↑ Napa earthquake hastens California calls for early warning system | World news | theguardian.com
“A few seconds means that you can move to your safe zone, that you can get under that sturdy table; that way you are not going to be injured by falling fireplaces and ceiling lights. We see a large number of injuries resulting from these kinds of incidents.”
↑ South Korea Floods, Landslides Leave at Least One Person Dead – Bloomberg
Heavy rain lashed the southeast of South Korea, flooding a school in Busan and triggering landslides that demolished a senior citizens’ center. At least one person died when a bus was washed away, Yonhap News said.
As much as 242 millimeters (9.5 inches) of rain fell today in parts of Busan and about 270 millimeters in nearby Changwon as of 4 p.m. local time, according to the Korea Meteorological Administration.
↑ Soros-Backed Insurer Tops Paulson Bets as U.S. Rules Loom – Bloomberg
…private mortgage insurer eligibility requirements, or PMIERs….
At a time when lending remains restricted, the proposed rules could make homeownership more expensive for borrowers without the highest credit scores or lacking funds for a big down payment. The insurers would likely charge higher fees to these riskier borrowers.
↑ More rain forecast for wildfire-singed central Washington | Local & Regional | Seattle News, Weather, Sports, Breaking News | KOMO News
Okanogan County Sheriff Frank Rogers said he believes a couple of the 10 homes were destroyed, a few were knocked off their foundations, and many suffered mud damage.
“Still no injuries,” he said Friday night. “No deaths. No missing people.”
The slides and flooding hit hard in areas burned by this summer’s Carlton Complex wildfires. The fires burned more than 400 square miles, making it the largest wildfire in the state’s history. About 500 firefighters remain in the area mopping up.
↑ Small actions can reduce wildfire risks
Property owners can reduce their risk of wildfire damage by choosing metal roofs over wood shake roofs, for example, keeping flammable materials such as firewood piles away from the home, spacing trees farther apart and by clearing brush from nearby roads.
Increasingly, homeowners and communities are seeing the benefits of such strategies, and they’re joining voluntary programs such as the National Fire Protection Association’s Firewise Communities.
↑ How to Finance Your Renovations
Choosing to renovate your property is a smart decision, but when cash flow is tight, it can be seemingly impossible. Here’s the good news: there are probably more options available to you than you think. When it comes to financing your home renovation project, consider boosting your cash flow through any one of these means:
CLEVELAND (AP) – The owner and manager of a Cleveland apartment complex have settled a federal lawsuit over claims that families with children weren’t allowed to live or rent there.
How did they not know they couldn’t do that? They didn’t do their research?
↑ The Stall-Speed Syndrome by Stephen S. Roach – Project Syndicate
Stephen S. Roach:
Myopic authorities need to take less guidance from frothy financial markets and focus more on the structural repair of a post-crisis world. This is a time for heroes, not cheerleaders.
It’s also not a time for austerity.
…these were the very models that had failed to anticipate the crisis in the first place: why should they be taught after it, I challenged — especially since even Yates had conceded that “the state of the art in macro can’t generate financial crises yet”. In particular, I commented that until I saw a Neoclassical model that included banks, debt, money and disequilbrium, I couldn’t take them seriously. Yates replied that “there are plenty of examples”, and invited me to Google “macro debt money disequilibrium bank” to locate them (see Figure 1). I was skeptical — I knew of only one such model, by Eggertsson and Krugman — so I took his challenge.
When I did, rather than finding “plenty” of Neoclassical models, the first two non-dictionary entries returned were to my work, and the only models that were returned were non-Neoclassical models by complex-systems economists like Carl Chiarella and Peter Flashel.
↑ More laid-off workers find jobs in their fields
A growing number of displaced workers are getting jobs in the industries they left — a hallmark of a strengthening recovery.
Of the roughly 4 million non-farm workers laid off from jobs they held at least three years from 2011 to 2013, 62% were working again by January 2014, according to a survey of displaced workers by the Bureau of Labor Statistics released Tuesday.
Slightly more than half of those re-employed had jobs in their former industries, up from 47% in January 2012 and 44% in January 2010.
↑ Q2 2014 Office MarketView – YouTube
Ed Schreyer, President, Agency Brokerage and Asset Services for the Americas, discusses the U.S. office market’s performance during Q2 2014.
↑ Q2 2014 Retail MarketView – YouTube
Todd Caruso, Senior Managing Director, Retail Agency Services, The Americas, discusses the U.S. retail market’s performance during Q2 2014.
↑ Texas housing market finally sees increase in inventory — even Dallas – CultureMap Dallas [cached]
The story right now in the Texas housing market: quarterly gains in inventory for the first time in three years, according to the latest report from the Texas Association of Realtors. Because of a housing shortage in 2014, Texas has not seen the double-digit home sales growth it did last year — but it certainly saw increases in home prices.
“This new increase in inventory is promising,” said Dan Hatfield, chairman of the Texas Association of Realtors, in a release. “However, home sales volume continues to keep pace with 2013 — the second-best year ever for Texas real estate — showing that housing demand continues to be very strong throughout the state.”
↑ Morning Agenda: Hackers Hit U.S. Banks – NYTimes.com
A number of United States banks, including JPMorgan Chase and at least four others, were struck by hackers in a series of coordinated attacks this month, according to four people briefed on a continuing investigation into the crimes, Nicole Perlroth writes in The New York Times. The hackers infiltrated the banks’ networks, siphoning off gigabytes of data, including checking and savings account information, in what security experts described as a sophisticated cyberattack. The motivation and origin of the attacks are not yet clear, according to investigators.
The F.B.I. is involved in the investigation, and a number of security firms have been brought in to conduct forensic studies of the penetrated computer networks, Ms. Perlroth writes. It was not clear whether the attacks were financially motivated, or if they were collecting intelligence as part of an espionage effort. Security experts say the stealthy nature of the recent attacks suggests that the motivation was not political.
↑ Medicare: Not Such a Budget-Buster Anymore – NYTimes.com
How long this all will last is a source of great debate in the world of health economics. There have been a series of analyses on the spending slowdown, some of which peg the Great Recession as a major cause. If those studies are right, the trend may reverse itself as the economy improves.
But the analysts at the Congressional Budget Office say the economy is playing a negligible role in what’s happening in Medicare, meaning that they’re more confident that the practice of medicine really is changing. And those changes, if they persist, will do more to reduce the federal deficit than nearly any policy option budget cutters talk about.
↑ China regulator drafts rules aimed at tightening grip on shadow banking
The government has been trying to control off-balance sheet lending, which has jumped since 2010. It is worried that funds are being used to roll over bad loans as well as to worsen asset-price bubbles in real estate and create industrial overcapacity.
↑ [Highly recommended] Washington Recaptured by Simon Johnson – Project Syndicate
WASHINGTON, DC — Two hundred years ago, Washington DC was captured by the British — who then proceeded to set fire to official buildings, including the White House, Treasury Department, and Congress. Today, it is a domestic interest group — very large banks — that has captured Washington. The costs are likely to be far higher than they were in 1814.
America’s largest bank holding companies receive an implicit government subsidy, because they are perceived to be “too big to fail.” The authorities will not allow the biggest banks to default on their debts, through bankruptcy or in any other fashion, owing to the need to prevent the financial system from collapsing. This doctrine became starkly apparent in late 2008 and early 2009; it remains in force today.
↑ Economy Grows More Than First Estimated on U.S. Investment Gains – Bloomberg
The biggest gain in U.S. business investment in over two years helped the world’s largest economy expand more than previously forecast in the second quarter, raising expectations for the rest of 2014.
Gross domestic product, the value of all goods and services produced, rose at a 4.2 percent annualized rate, up from an initial estimate of 4 percent and following a first-quarter contraction, Commerce Department reported today in Washington. Other reports showed the outlook for home sales improved in July, fewer people filed claims (INJCJC) for jobless benefits last week and consumer confidence climbed.
It’s not bad, but we can do much better with the right monetary and fiscal policies.