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Snoqualmie Pass is a major recreational area in the midst of beautiful mountains and pristine national forests, located just 50 minutes east of downtown Seattle, and 40 minutes from downtown Bellevue.

Snoqualmie Pass Real Estate
Snoqualmie Pass is a major winter and summer recreational area bordered in part by the Mount Baker-Snoqualmie National Forest and the Wenatchee National Forest, home to the Community of Snoqualmie Pass and the largest ski resort area in the state. Snoqualmie Pass has four ski resorts, which are called Alpental, Summit West, Summit Central, and Summit East.

The Summit at Snoqualmie ski resort says it has won Forest Service approval for an expansion. The resort plans to build six new chairlifts and three surface lifts. It also plans night lighting on snow trails.
As part of the agreement, the resort is donating nearly 500 acres to the Forest Service for conservation.

Snoqualmie Pass Real Estate
The elevation at Snoqualmie Pass is 3022 feet, and hosts a bi-county community of 250 full time residents.

The dividing line of King and Kittitas Counties passes through the community at The Summit. Snoqualmie Pass draws hundreds of thousands of visitors annually, many to sample the wilderness beauty, travel the national forest trails, and a growing number who participate in the ever expanding recreational activities

Another feature of the Snoqualmie Pass area is the Pacific Crest Trail. One of the more popular hikes along a segment of the Pacific Crest Trail, is the section from Snoqualmie Pass to Stevens Pass, which passes directly through the heart of the Alpine Lakes Wilderness. This 68-mile hike takes between four and seven days for most hikers. A majority of hikers do this hike from north to south, starting at Stevens Pass and hiking to Snoqualmie Pass, to avoid an extra 1,000 feet of elevation gained when hiking south to north.Some follow the PCT faithfully, never straying far from this �superhighway� of Washington trails. However, there are many side trails and route variations leading to lakes, scenic meadows, and other points of interest all along the way.

Snoqualmie Pass Real Estate
Very few hikers cover the entire 2,000-mile length of the Pacific Crest Trail (PCT) from Mexico to Canada. For those who do, most complete the trail in sections, hiking a few hundred miles one summer and so on, until they have completed all or most of the trail. Likewise, few hikers cover the entire Washington section of the PCT in one adventure; more often they hike it in sections, from major highway to major highway, 60 miles here, 100 miles there.

Snoqualmie Pass Real Estate
Just to the east of Snoqualmie Pass are the beautiful mountain lakes of Lake Keechelus and Lake Kachees.Lake Keechelus is the western lake of the three large lakes near Interstate 90 and north of the Yakima River in the Cascade Range. Lake Keechelus is part of the Columbia River basin, being the source of the Yakima River, which is tributary to the Columbia River.

The lake is used as a storage reservoir for the Yakima Project, an irrigation project run by the United States Bureau of Reclamation. Although a natural lake, Lake Keechelu's capacity and discharge is controlled by Keechelus Dam, a 128 foot high earthfill structure built in 1917. As a storage reservoir, Keechelus Lake's active capacity is 157,900 acre feet. The name Keechelus comes from an Indian term meaning "few fish".

Snoqualmie Pass Real EstateLake Kachees is a lake along the course of the Kachess River in Washington State.The upper part of the lake, north of a narrows, is called Little Kachess Lake. The Kachess River flows into the lake from the north, and out from the south. Kachess Lake is part of the Columbia River basin, the Kachess River being a tributary of the Yakima River, which is tributary to the Columbia River. The lake is used as a storage reservoir for the Yakima Project, an irrigation project run by the United States Bureau of Reclamation. The name Kachess comes from an Indian term meaning "more fish".

Snoqualmie Pass Real EstateA little further to the east of Lake Keechelus and Lake Kachees, you will find the beautiful resort of Suncadia. Suncadia is a planned unincorporated community and resort in Kittitas County, Washington, covering an area of 6,300-acres. It is located approximately 30 miles east of Snoqualmie Pass in the Cascade Mountains between Roslyn, Cle Elum, and the Mountains to Sound Greenway section of Interstate 90.

The resort is a joint undertaking between Jeld-Wen, and managing partner Lowe Enterprises. The $1 billion project features a mountain lodge with convention center facilities, village center with restaurants and shops, a mountain springs themed spa, a sports center with indoor and outdoor swimming pools, an outdoor venue amphitheater/lake with winter ice skating, trails and recreational areas, 2,000 residential units, and three golf courses.

Over 500 single-family homesites were sold in 2004, generating more than $125 million in gross revenue.

The community's open space includes a 1200-acre corridor along the Cle Elum River, which remains open to the public under a partnership (called the Suncadia Conservancy) that also includes Washington's Department of Fish and Wildlife and the Yakama Nation.

Eventually, most visitors, especially kids, will seek out the dogsled rides.

Earlier this season, dogsled racer Porter, 56, of East Wenatchee,Snoqualmie Pass Real Estatestruck a deal with resort officials for access to Suncadia to train his dogs. In exchange, he gives visitors free dogsled rides.

"It's a chance for us to get some muscles on the dogs," said Porter, who has competed in more than 20 races the last eight years.

Porter brings 14 of his 25 dogs to the track every weekend. The dogs get so excited that their first lap feels like a mad dash to the finish line. After they settle down, the ride gets slower and is gentle enough for children � making for a good photo opportunity.

When snow falls, his thick brown beard turns white, and Porter looks like Santa Claus out there.
A handyman by trade but a racer at heart, Porter dreams of running the Iditarod before he dies. He has bred or raised several dogs with Iditarod pedigrees, including Mary and Suzy, a pair of Siberian huskies who under other mushers have twice finished that treacherous 1,150-mile dog race in Alaska.

Suncadia, originally called "MountainStar," is being built on former forest lands purchased in 1996 from Plum Creek Timber Company by Jeld-Wen's Trendwest Investments.

Just to the west of Snoqualmie Pass you will find the brand new Snoqualmie Casino. The Snoqualmie Casino isn't visible from Interstate 90, and there is no sign on the freeway marking its location, but just off Exit 27 near the town of Snoqualmie, the new 170,000-square-foot Snoqualmie Pass Real Estate mecca of gambling, dining and live music hovers over the valley like the mother ship of Northwest casinos. the new 170,000-square-foot mecca of gambling, dining and live music hovers over the valley like the mother ship of Northwest casinos.

Its imposing "great lodge" design, with two prow-like structures atop its massive roof, belies a glitzy interior that features an enormous gaming area filled with gleaming, state-of-the-art slot machines and eye-popping dining areas and lounges.

Surrounding the casino area are a cigar bar, a martini and wine bar, a high-end restaurant, an eclectic buffet, an East-Coast-style deli, a sushi and noodle bar, an "ultra lounge" nightclub and an 11,000-square-foot ballroom.

"What we've tried to create there is a little touch of Las Vegas," said Leonard Bergman of Las Vegas design firm Bergman, Walls & Associates, which designed The Mirage, Treasure Island and other gaming resorts. The general contractor is Skansa USA Building, which built Benaroya Hall and McCaw Hall. The interior designer is Yates-Silverman Inc., with 40 years of experience in designing hotel and casino interiors.

Snoqualmie Pass Real EstateSnoqualmie Casino makes up for its lack of hotel rooms with a host of sumptuous amenities right in Seattle's backyard -- among them a plush cigar bar with walk-in humidor, called LIT, and a luxurious, 88-seat, high-end restaurant, called Terra Vista. And there's a six-level parking garage for rainy Northwest days.

"What we've angled for is the attention to detail," said Gallagher, the vice-president of marketing. "It's not about quantity, it's about quality."

The 51,000-square-foot gaming floor features 50 table games, eight poker tables and 1,700 slot machines mounted on distinctive platforms, or "slot bases," with the casino's crescent moon logo (tribal members call themselves "people of the moon"). Plasma screens provide indoor signage throughout the building.

Snoqualmie Casino has made all restaurants on the north side of the casino smoke-free. And the casino has installed a ventilation system that can exchange all of the air in the building every 15 minutes, providing a less smoky environment than many casinos.
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Snoqualmie Pass Real Estate – Tiny Home Ideas

Snoqualmie Pass Real Estate, Mortgage, and Economy
There are a few truisms about tiny homes: They are ecologically friendly. They are generally inexpensive. They can help avoid house debt. They have a reduced carbon footprint. They offer the possibility for a freer, simpler life.
Tiny homes may have another selling point: the coolness factor.
Architectural innovation has become part of the tiny home movement, with some of today's top designers testing the boundaries of imagination and possibility, transforming ultrasmall spaces into marvels of eco-sustainable, microminimalist design.
Just look at what a tiny home can be: A "free-spirit" tree sphere, hanging above the forest floor. A steel hut constructed of salvaged car parts. Aplastic "loft cube" that can be airlifted by helicopter. A Space Age microhouse with round, rotating rooms. A diamond-shaped glass house suspended on a pole.
"There are a lot of architects today who are pushing the envelope," said California architect Cate Leger.
"It's hard to tell people you have to live small. But building ecologically responsible housing is essential to our survival as a species."
Leger and husband Karl Wanaselja, founders of Leger Wanaselja Architecture, are "green builders" who recently designed a residence in Berkeley, Calif., the McGee House, that utilized car windows and 100 salvaged car roofs. Needing a storage shed during construction, the team quickly slapped together a metal hut-like structure using some of the leftover car parts, and the result was unexpectedly appealing.
"In the next five years or so, you'll see us turn that idea into tiny house architecture," Leger said. "I believe tiny homes are the future. Or they should be. It's hard to tell people you have to live small. But building ecologically responsible housing is essential to our survival as a species."
Many architects agree. Tiny homes are being retrofitted with ecologically conscious features like solar panels, rainwater collection systems and compost waste management systems. Some even have state-of-the-art internal heating and cooling systems that can be digitally controlled by smartphone.
Some of the most cutting-edge design is happening outside the U.S., such as in Tokyo, the world's most populated city and one of the most expensive. There, living tiny can be a necessity. Radical tiny homes abound there, such as the microcompact Paco House cube or the bullet-shaped Lucky Drop House, which is 30 inches wide at its narrowest point.
Most extreme of all may be Japan's so-called coffin apartments—mausoleum-like lockers that rent for $600-$1,000 a month and are barely big enough for a narrow mattress and a few belongings.
Denmark is also at the forefront of the tiny home movement. A futuristic structure called Primeval Symbiosis, designed by Konrad Wojcik , is an ultra-high-tech glass dwelling suspended on a pole above the forest floor..
"Wojcik's tree house is a good example of architecture students who have cast off the rule book," said Michael Janzen, 46, a corporate Web designer in Fair Oaks, Calif., and the founder of tinyhousedesign.com. "It's extremely expensive to put in photovoltaics and all those high-demand appliances. I don't think going the high-tech route is sustainable.”
Architect Jordan Parnass agrees that the super-wired mini-house might not make sense. He said that there are simpler means to an eco-friendly lifestyle.
"It's extremely expensive to put in photovoltaics and all those high-demand appliances. I don't think going the high-tech route is sustainable.”
"You see a lot of tiny homes that consciously avoid making a great impact on the environment, that aim to be off the grid," said Parnass, principal atJordan Parnass Digital Architecture in Brooklyn, N.Y.
Because a tiny home can be constructed from practically anything—a refurbished shipping container, a yurt, an "earthbag dome"—its cost is hard to quantify. Some businesses, like the Tumbleweed Tiny House Co., offer basic, ready-made starter homes starting at $57,000 ($433 a month) as well as do-it-yourself workshops.
Cheaper options are available, however. The "OTIS" house (optimal traveling independent space) for example, designed by students at Green Mountain College in Vermont, has features like a rainwater catchment system, composting toilet and a solar-powered electrical system, and still only costs $8,000-$10,000.
For aficionados of tiny homes, a houseboat or a treehouse may be the ultimate fantasy. Both minimize the home's environmental impact (because the earth is undisturbed by the home's construction) and allow the inhabitants to live harmoniously with nature.
Among the world's most ingeniously designed, unique tree homes are the Chudleigh family's Free Spirit Spheres on Vancouver Island, British Columbia. Inspired by Jacques Cousteau's round, steel deep-sea diving submarine, "Bathysphere," Tom Chudleigh, 62, custom builds uni-room, round dwellings that hang from trees.
An artist with a background in biology, boat making and engineering, Chudleigh handcrafts the beds, chairs, tables and circular windows so they fit precisely into the curved space.
All the spheres are unique, measuring between 8 feet and 10 feet in diameter, and have names like Eryn, Eve, Melody and Gwynn. They are currently being rented out as vacation homes, though Chudleigh and wifeenvision a future "populated with spheres, connected by rope suspension bridges."
It may be hard to imagine a future where "free spirit spheres" are a standard housing option, but Chudleigh said he's open to the possibility.
After all, the sky's the limit in the future of tiny home design.
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Snoqualmie Pass Real Estate, Mortgage, and Economy Blog 4/13/14

Snoqualmie Pass Real Estate, Mortgage, and Economy Blog 4/13/14

Interest Rates Make A Big Move Better: Interest rates have been trending higher over the last 2 months after hitting 2014 lows back on February 10th. This week there were large loses in the stock markets accompanied by the typical improvement in interest rates. It is not clear to many analysts what caused this change in direction. There were some, less than encouraging, comments from the head of the IMF regarding slow growth in Europe along with returned concerns over deflation. Initial jobless claims fell this week which is usually a positive indicator for the economy but slowing growth in China and growing sentiment that the stock markets are due for a correction overshadowed jobs numbers. We are close to the low interest rates for the year which will be a strong impediment for further improvements. To hit new lows will require more news that economies are not recovering and inflation remains low.

Industry News
"The one function that TV news performs very well is that when there is no news, we give it to you with the same emphasis as if there were." David Brinkley. While last week's economic calendar may have started off on the quiet side, the news picked up steam in the second half of the week. Read on for the highlights.
There was good news in the labor markets, as weekly Initial Jobless Claims fell by 32,000 in the latest week to 300,000. This was near a seven-year low and a signal that the labor markets may be coming out of hibernation as spring starts to bloom. In addition the 4-week moving average of claims, which irons out seasonal abnormalities, also fell. Meanwhile, the Consumer Sentiment Index for April came in above expectations, showing that consumers are feeling positive about the economy as we head into warmer months.  The housing sector also had good news to report, as foreclosure activity across the nation continues to decline. RealtyTrac reported that foreclosure filings fell to the lowest level since the second quarter of 2007. In addition, March was the forty-second consecutive month where foreclosure activity decreased from the previous year, with foreclosure filings declining by 23 percent from March 2013 to March 2014.

What does this mean for home loan rates? Typically good news helps Stocks improve at the expense of Bonds, including Mortgage Bonds (the type of Bonds on which home loan rates are based). However, Bonds and home loan rates were able to improve last week as the Stock market seemed to begin a correction from recent gains.

In addition, the minutes from the Fed's March meeting of the Federal Open Market Committee imply that the Fed will continue tapering its Bond and Treasury purchases this year. Remember that the Fed is now purchasing $30 billion in Treasuries and $25 billion in Mortgage Bonds to help stimulate the economy and housing market. This is down from the original $85 billion per month that the Fed had been purchasing. Additional tapering of these purchases will continue to impact our economy and home loan rates as we move ahead this year, and this is an important story to monitor.

The bottom line is that home loan rates remain attractive compared to historical levels, and now remains a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.
Federal Reserve Update: Fed Chairman Yellen corrects misunderstanding.   Janet Yellen has continued the policy of her predecessor to have an open and transparent Fed. Some suggest this is dangerous territory and creates more volatility in markets. This may be true as we have seen relatively high volatility in markets during a relatively tame economic period. Others point to the remaining QE activity as the source of uncertainty and volatility. This week Chairman Yellen corrected an interpretation that a hike in Federal Funds rates were set in stone for 2015. She corrected that notion with comments that any Fed activity will be data dependent. The Fed still seems interested in supporting a healthy stock market while also stimulating real estate markets and an increase in inflation. This has caused a tempering of expectations of rate hikes.

 Real Estate Miscellaneous Stats

Foreclosure Rates In US Markets Down 34% From One Year Ago:  Foreclosure rates are at the lowest levels since July 2007. This represents 42 months of consecutive drops in foreclosure numbers. The first quarter of 2014 had just under 372000 foreclosure notices. This is still a large number. March foreclosures were actually up 6% from February. Even though overall numbers are down foreclosures are actually up in 29 states. Utah was up 226% and Oregon up 176%. Some of the foreclosure hotbeds are still up with Nevada and Florida up 21% from the prior year. California foreclosure notices were actually up 10%. This is the first increase since early 2012. According to Realty Trac executives, banks are now turning their attention to properties that were eligible for foreclosure but action has not been taken. This is especially true in judicial foreclosure states where impediments to foreclosing are higher. Even non-judicial have seen jumps such as in California. They also estimate there are 500000 properties that are still occupied by former owners and renters that have not been up for sale. These are expected to hit the market soon. They also have data that indicates over half of all foreclosed properties are still occupied by former owners or tenants. Distressed properties are still taking significant amounts of time to foreclose and then sell in many markets but much less so in others such as California. Realtors there say banks are moving through their inventory much more quickly. Other areas of the country still have a persistent lack of recovery such as Florida. Florida’s foreclosure rate has decreased over the last 3 quarters but is still 1 in 129 housholds for the first quarter 2014. Florida still has 8 of the top 10 markets for foreclosure rates. 

January  Case/Shiller Housing Market Index was released last week. National median values were up 13.2% year over year. The trend seems to be continuing up with month to month gains at 0.7%. This is not current data so it can only give an ideas of trends and momentum.  Price appreciation on a year-over-year basis in most markets,  has eased in recent months. This is a typical time of year for a slow down with unusually severe winter weather slowed demand for properties in some markets.  Most analysts still expect a robust spring. King County experienced the same slow down as many parts of the country but most are pointing to the Seahawks Super Bowl run as the reason. Median values in King County actually dropped in February by $5000.00 to $405,000.00. Pending sales were also down 13% from one year ago at the same time. Some of this is due to a persistent shortage of available homes for sale. People are reacting differently to current conditions. Some are motivated by higher rates and higher prices to buy or sell sooner than later. Others are holding on to homes with the idea that appreciation will work in their favor. Many buyers are reluctant to enter a competitive market and overpay for a home; especially if it is not something that is ideal. Zillow reports that 40% of Seattle area homeowners are still underwater on their homes. Most seem to be holding out instead of trying for a short sale. The hottest markets still seem to be causing a desperate frenzy which is causing some to overpay. This is causing problems with appraisals which look backward at values. If sales are scarce in the subject area the data can be months old. This is something to be aware of for buyers who are on the edge for down payments. With appreciation rates as high as they are it will be hard to convince sellers that they should lower their prices based on an appraisal. Snohomish County values were actually up from $295k to $315k from just the previous month.

February Pending Home Sales was reported by National Association of Realtors to be down 0.8% from January. These sales numbers were the lowest level since Octber 2011. Year over year numbers were down 10.5% which is  the 8th straight decline in pending home sales in a row.


 Loan Program Of The Month. New Private Financing Program: Absolute Mortgage has entered in to an exclusive relationship with private lender to offer creative solutions to many common problems for home buyers. This program provides financing for situations such as bridge loans, construction loans for partially completed homes, rehab loans, cash acquisitions and super-fast closings. The fees for these loans are lower than typical hard money loans. I will be sending a flyer with details so watch your in-box

Snoqualmie Pass Real Estate, Mortgage, and Economy Blog 4/13/14
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10 Pitfalls/Strategies for Selling Your Home!

Snoqualmie Pass Real Estate, Mortgage, and Economy

Steps

  1. STEP 1

    Declutter your home

    Get rid of as much clutter as possible. Stuffed closets, extraneous furniture, exercise equipment in living quarters, crowded countertops, overflowing cabinets, and endless knickknacks make homes seem smaller than they are. Consider putting some things in storage.
  2. STEP 2

    Hide your pets

    Hide all evidence that you own animals. Just because your potential buyer loves his own pets doesn't mean he wants a house that reeks of yours. Get rid of pet stains and odors (pay a professional if you have to) and send the four-legged family members to a neighbor's house when you show your home.
  3. STEP 3

    Be scarce yourself

    And, while you're at it, make yourself scarce during home showings. You know how you feel about those annoying salespeople who follow you around the store, making you uncomfortable? That's how potential home buyers will feel about you.
  4. STEP 4

    Don't discount the first offer

    Think carefully before you reject the first offer on your home; studies show it is usually the highest bid you get. And the longer you hold out for a better offer, the lower your chances are of getting it, because people start to think that something must be wrong with a house that's been on the market for so long.
  5. STEP 5

    Always negotiate

    Don't take lowball offers personally, or you'll lose a lot of potential buyers. Instead of viewing them as insults, look at them as starting points for negotiation.
  6. To attract the most buyers, list your home a few thousand dollars below a major round number. If you're hoping to get about $200,000, for example, list it as $199,000, not $205,000. You don't want to miss out on buyers who have set $200,000 as their cutoff point.
  7. STEP 6

    Out with the old

    Toss or change anything that makes your home look tired -- worn carpeting, old throw rugs, dirty light switch covers. Give every room a fresh coat of paint in a neutral color. Don't let cost deter you; this is truly a case where you've got to spend money to make money.
  8. STEP 7

    Remember curb appeal

    Don't discount the importance of a good first impression from the street. Trim hedges, reseed the lawn, plant some flowers, wash the windows, scrape and repaint the front door and windowsills, and put some oversized potted plants at the entrance.
  9. STEP 8

    Depersonalize your home

    Rid your home of all your treasured personal touches -- family photos, the kids' artwork on the fridge, religious artifacts, bowling trophies, your ceramic pig collection, the shrine to Elvis. They will only make it more difficult for potential buyers to imagine themselves in your home.
  10. STEP 9

    Aim for light and bright

    Because home buyers are nearly unanimously looking for a light, bright house as opposed to a dark, dreary one, do what you can to make that happen. Ditch the heavy drapes, take down dark wallpaper, put in high-wattage light bulbs, and get rid of wood paneling.
  11. STEP 10

    Fix anything that's broken

    Fix whatever is broken before you list your home. It's almost always cheaper to do it yourself than to let the buyer use it to bring down the price.
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Snoqualmie Pass Real Estate, Mortgage, and Economy – 3/16/14

Snoqualmie Pass Real Estate, Mortgage, and Economy - 3/16/14

Interest Rates Move Lower As Overseas Fears Spook Markets: Interest rates move back to levels of over a week ago as growth in China slows and Russia stages more troops around Crimea as it’s parliament votes to succeed from Ukraine. The stock market lost over 200 points on Thursday and this influenced rates to move lower. Rates typically move lower when there are concerns in the stock markets. Tame inflation reports from last week also encouraged rates to move lower. All of these economic readings are translated in to speculation by the markets of what it means regarding the Federal Reserve taper initiatives. Consensus seems to be that the taper will be slow with these current economic conditions.

Industry News
"No matter how long the winter, spring is sure to follow." Proverb. This winter certainly has been a long one for much of the nation, with many hoping spring makes a quick arrival. As temperatures slowly begin to thaw, recent economic reports reflect an economy in bloom.

http://www.mmgweekly.com/templates/mmgweekly/reg_chart/466/images/top-image_2014-03-14.jpgAfter falling for two months, Retail Sales rose by 0.3 percent in February, above expectations, as consumers purchased a variety of goods despite the harsh winter weather. This is important because Retail Sales make up about one-third of consumer spending, which is the main driver behind economic growth. If consumer spending can continue to expand, economic growth could go beyond the recent 2 percent levels we have seen the past few years. This will be good news for our economy.

The labor market also showed signs of life last week, as Initial Jobless Claims fell to 315,000, the lowest level since the end of November. And there was good news on the housing front, as RealtyTrac reported that foreclosure filings in February declined by 10 percent from January, and are down a whopping 27 percent from the same period last year.

What does this mean for home loan rates? Typically, good economic news benefits Stocks at the expense of Bonds, as investors try to take advantage of gains. However, fears of an economic slowdown in China and tensions in the Ukraine helped Mortgage Bonds improve due to safe haven trading. And as home loan rates are tied to Mortgage Bonds, this was good news for rates as well.

In addition, it's important to remember that the Fed is now purchasing $35 billion in Treasuries and $30 billion in Mortgage Bonds (the type of Bonds on which home loan rates are based) to help stimulate the economy and housing market. This is down from the original $85 billion per month that the Fed had been purchasing. The Fed is meeting again this week, and additional tapering could be announced on Wednesday. This decision is sure to impact the markets and home loan rates, and it's an important story to monitor.
The bottom line is that home loan rates remain attractive compared to historical levels, and now remains a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.
 Real Estate Miscellaneous Stats
 
US Congress Proposes Dramatic Changes with Fannie Mae and Freddy Mac. The US Senate is pending consideration of the Johnson-Crapo bill which removes US Government guarantees of Fannie and Freddy securities. Up until the Great Recession, Fannie and Freddy have operated as private corporations with private shareholders to whom they answer for profits and operation. They were to answer to government oversight, because of the government’s guarantees, which could cause unwarranted risk taking by the agencies. In spite of repeated warnings by the Bush Administration in the early 2000’s, of Fannie’s risk taking, irresponsible risk taking is what required the government to take over the Agencies and fund their deficits. A refusal by Congress to exercise serious oversight ( thank you Barney Frank…my favorite object of derision ) and a failure of regulatory agencies to reign in crazy Wall Street mortgage products caused a wholesale meltdown that engulfed Fannie and Freddy. What seems to be missing in the knee jerk reaction from Congress is an appreciation that Fannie and Freddy had an amazing track record of success over a 80 year history. The housing sector has been a huge part of the US economy that does not exist in countries that do not have analogous entities. Why would we end an arrangement that has had such a large factor in creating household wealth? The name of this bill seems to be appropriate to me. In spite of my conservative leanings, the agencies seem to me to have been a great success story with their only failure coming when Congress did not do their job. Also lost in the discussion is that Fannie and Freddy have paid back the funds required by the tax payer to pay back their bailout. Here is a piece from a service I subscribe to that seems well balanced to me. The recent bill coming out of the Senate on a plan to terminate Fannie and Freddie, while still a lot of the details are unknown. This morning Cantor Fitzgerald put out a comment that is worth considering. “The primary role of Fannie Mae and Freddie Mac is to issue mortgage bonds. We seem to have forgotten that. Yes, the government-sponsored enterprises became used as tools of housing policy, but let's not confuse that with mortgage finance. But confused I think we are. The reason I bring this up is that after reviewing what little information is available on the Johnson-Crapo bill coming soon in the Senate, the most glaring omission is information of how the mortgage bond markets will operate after winding down the government-sponsored enterprises. Oh, there is down payment guidance. And there are private insurance investment standards there, as well. It earned the support of trade groups, but has investors worried. Why? What hardly gets a mention, and to me is the most glaring, is how the To-Be-Announced market will function in the absence of the two bond dealers that fill this highly liquid $10 trillion space. What's happening here is a reinforcement of the need to stop using secondary mortgage market issuers as tools for housing policy. This is likely why the Johnson-Crapo bill calls for an elimination of affordable housing goals. If this works, the multifamily asset class introduction into risk-sharing deals would increase financing for renters.
Compass Point earlier gave the Johnson-Crapo bill a less than 5% shot of becoming law. Rep. Maxine Waters applauded the bipartisan support, but also give it an even lower chance. "Without a reasonable proposal that can be supported by a broader coalition of the House, housing finance reform is going nowhere this year," Waters said in an email. It's just as well; TBA investors still need better answers.” (March 12, 2014 By. Jacob Gaffney)

Applications for home mortgages, including both new purchases and refinancing’s, are at the lowest levels in more than a decade. The common understanding is to blame rising interest rates for the decline of new loan applications but, there is more involved. Factors such as a weak job market, stagnant consumer income and excessive regulation are more important. Industry experts report that banks are exiting mortgage lending and loan servicing businesses. This is in large part because of punitive regulations and new Basel III capital requirements which demonize private mortgage lending. "Rules enacted last year appear to be steadily forcing banks to exit the mortgage servicing business, transferring such rights to nonbanks," Victoria Finkle writes in American Banker. "The situation is stoking fears on Capitol Hill and elsewhere that regulators went too far." Those fears are well founded. The latest data from the Federal Deposit Insurance Corp. confirms that the loan portfolios of commercial banks devoted to housing are running off. This dramatic drop in mortgage applications is causing huge layoffs and realignments among mortgage companies. There have been many purchases of private mortgage businesses already this year. Many of these companies do not have the financial resources to operate in the environment of lower originations. You will continue to see more sales or alignments of mortgage banking firms. For those companies with financial challenges you will see rate pricing increases. This is causing a lot of movement of originators as their environments have changed. Expect a lot more of this activity in the coming months.
December Case/Shiller home index increased 13.4%% year over year, in line with estimates;  On a month to month basis sales were down 0.1% contradicting forecasts of +0.6%.  This is the second month in a row that sales were down. These numbers were not affected by the tough winter weather as December numbers didn't have much impact but was the holiday season when sales usually slow. The report also included quarterly figures for the market nationally. Prices for all of the U.S. climbed 11.3% in the fourth quarter from the same period in 2012; almost identical to an 11.2 percent gain in the 4th quarter which ended in September. Home prices adjusted for seasonal variations increased 0.8% in December from the prior month after climbing 0.9% in November. Overall the data isn't encouraging when seen through the eye of Jan existing home sales that declined 5.1%.  The new homes sales were an encouraging surprise. 

Seattle Area Home Prices Slip in December but Total 2013 Numbers Are Strong:   Average home prices in King, Snohomish and Pierce counties moved lower by .5% in December after going down .1% in November. Total price increases for 2013 came in at 12.4% which is the largest increase since 2005. Officials for the index suggest that increased values and rates are slowing sales as homes are less affordable now than one year ago. Even though appreciation rates will be slower they are expected to be stong with the 10 year outlook showing an average of 3%. Good news for regular buyers from the experts is investors will be less active.

  Snoqualmie Pass Real Estate, Mortgage, and Economy - 3/16/14
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Snoqualmie Pass Real Estate, Mortgage, and Economy 5/13/12

Here is the Snoqualmie Pass Real Estate Report for May 13, 2012:

Mortgage Rates Test Historic Lows : The continuing concerns coming from Europe are causing shock waves through the world economy. People in Europe are insisting on hanging on to a fiscal illusion with expectations set by living for years under Social Democratic governments. Being unwilling to accept that they cannot borrower their way to prosperity and over spend in the process, they are rejecting plans to secure their countries solvency. This is taking the world financial system in to uncharted territory. In the entire history of the 10 yr treasury note there have been three days when the yield was below where it is this week; on Sept 22nd and 23rd and Oct 4th 2011. How much lower US interest rates will decline is hard to handicap; we are like fish out of water when it comes to forecasting markets in the face of the uncertainty and unprecedented crisis in Europe and the implications for the EU and Europe’s banks as well as economic concerns. See European commentary below.

Survey says? Last week’s economic report calendar may have been light, but some important surveys revealed key data to note. Read on for the details…and how home loan rates fared.
As you can see in the chart, the National Association of Realtors (NAR) said that of the 146 Metro cities surveyed, home prices rose in 74 of them in Q1 2012. This is up from 29 cities that saw an increase in home prices in Q4 2011. In addition, the NAR also said that inventories for existing homes fell 22% since this time last year and are down 41% since the peak in mid-2007. While the housing market has a long way to go, this report was a nice step in the right direction.
There was also news from the National Federation of Independent Business, which said that its small business optimism index gained 2% in April as the survey revealed that companies have increased plans for hiring and investing in the future. While companies added new employees at a slower pace in April than in March, the index rose to 94.5 — the highest level since February of 2011. Overall, though, the report showed that our economy is improving but is still fragile. The state of our economy is part of the reason for the improvement in Bonds (and home loan rates, which are tied to Mortgage Bonds) of late.
Another big reason that Bonds and home loan rates have been improving is the fresh round of uncertainty out of Europe. France elected a new president, and this change of the guard represents the ninth EuroZone leader swap since the financial crisis began. Greece is also back in the news and their citizens are not taking to the austerity measures either. The New Democracy government, a pro-bailout party, is having trouble gathering the support to rule the government. This has sparked some safe haven trading into our Bonds, as investors see our Bonds as a safe place for their money.
The events in Europe and potential softening of our economy have resulted in home loan rates remaining near historic lows. That means now continues to be a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.

Europe Has Failed to Produce a Successful Plan: Over this last week elections in Europe show the populations of many countries besides Greece are bucking against austerity plans proposed to bring debt loads in to line. Greek voters roundly rejected the austerity plan placed on them by the ECB while in France voters rejected the idea of severe spending cuts at the expense of jobs and being aligned with Germany’s insistence for increased austerity. In short, no matter that spending cuts are vital to preserve sovereign solvency, people are rejecting the painful reality and choosing the illusion. Europe is now in complete disarray with no plan in the face of the rejections by voters over the weekend. Many experts say Greece is cooked and will default soon. Europe’s economies will continue to decline and there will be defaults of sovereign debts in a number of other countries. It will be years before Europe can right itself, in the meantime the global economic outlook must be lowered in the minds of investors. Money from around the world continues to flood US treasury markets as fears of defaults and uncertainties drive US rates to new historical lows.

Everything looks positive for the US interest rate markets at the moment but most economists surveyed are forecasting the 10 yr note yield will be at 2.25% by the end of June; if they are correct, which can be debated, the mortgage market is at or close to its best levels for months to follow. Regardless of the forecasts, the present level of interest rates remains the best in 60 years. We hear a lot of talk that potential buyers of homes or those wanting to re-finance are waiting for rates to fall more. While anything in this climate is possible, the likelihood of substantially lower mortgage rates is remote. Mainly because at some point at these levels investors will realize that investing in very low interest rates is difficult to justify. The support in bonds now is two-fold; safety as Europe could blow up at any time and what looks like a decline in stocks is increasingly likely. UK GDP declined in the last two quarters. The increasingly serious question for Europe is whether the massive austerity cuts demanded have failed to gain support and are for a number of countries unachievable, leading to further deterioration of economies and dragging other global economies down with it. In the US economists predict Labor Department data this week will indicate U.S. hiring increased in April, though not enough to reduce the jobless rate. Consumer spending climbed in March, but a little weaker than estimates. The concern we have for the 10 yr is that it still has not shown the ability to hold under 1.90% on rallies going back to October.

Real Estate Miscellaneous Stats:

King County Home Prices On The Rise: Lack of supply is making it slim pickings for home buyers in many areas of King County. Median value for April was up 3% from one year ago at $360,000.00. Historic low interest rates and improving employment in our area are causing the researchers at the UW Runstad Center for Real Estate Research says we could see a strong prime real estate season coming this year. Listings are down 38% from last year. Distressed property experts continue to predict a large increase in foreclosed properties coming on the market over the next year but some suggest banks are being more sensitive to keeping a slower supply coming to market in the interest in keeping up values. A tight rental market is causing more people to consider buying. A 3 year low in vacancy rates at 4.6% is causing renters to have less choice and higher prices. Prices remain location dependent as Southwest King county continue to see price declines while Seattle city prices are up 10.4% from one year ago with a median value of $425,000.00. Snohomish County prices are also up about 10% from last year.
Interest Rates Set New Historic Lows: The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.04% from 4.05%, with points decreasing to 0.40 from 0.45 (including the origination fee) for 80% loans. This is the lowest 30-year fixed interest rate recorded in the history of the survey. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.27% from 4.36%, with points increasing to 0.44 from 0.36 (including the origination fee) for 80% loans. This is the lowest 30-year jumbo interest rate recorded since MBA started tracking the series in January 2011. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81% from 3.83%, with points decreasing to 0.52 from 0.61 (including the origination fee) for 80% loans. This is the lowest FHA interest rate recorded in the history of the survey. The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.32% from 3.33%, while points remained unchanged at 0.41 (including the origination fee) for 80% loans. This is the lowest 15-year fixed interest rate recorded in the history of the survey.

February New Home Sales Revised Higher in February; A revision of new home sales for the month showed a sharp increase in the number of new homes sole in February. Many analysts are suggesting the numbers indicate the market is turning as 328K new homes were sold in March and February was revised to 358K.

March housing starts and building permits; starts were expected to be up 0.3%, they fell 5.8% the lowest level since Oct 2011, permits were thought to be -0.9%, they increased 4.5% to 747K the highest level of permits since Sept 2008. The starts headline didn’t impress; however multi-family starts were down 16.9% while single family starts were down just 0.2%. This is a positive sign for residential housing.

March existing home sales expected up 0.7% were down 2.6% to 4.48 million annualized; year over year sales of existing home sales are up 5.2%. Inventory levels declined 1.3% to 2.37 mil homes for sale, a 6.3 month supply. Listed inventory is 21.8% lower than in march 2011. The median price of sales $163,800.00 up 2.5% from March 2011. The tighter inventory is making some predict further price increases in many markets.

March National Association of Realtors pending home sales were expected up +0.5% but jumped 4.1%, abd year over year up +12.8%. This is a very good report. Pending sales are contracts signed but not closed. Contract cancellations have been running high as credit issues continue to drag on mortgage markets.

Not Like The Good Old Days: In 2006 45% or all first time homebuyers used $00.00 down loan options to purchase their homes.

Loan Program Of The Month. Guild Direct To Fannie Program: Guild Mortgage is unusual in that they originate loans and sell the directly to Fannie Mae. Most mortgage banking companies have to sell their loans to another larger banking institution which add their own rules and overlays to the underwriting parameters. This option gives Guild much more underwriting flexibility than almost all other lenders in our area. A recent example of this was a story relayed to me by a realtor who’s client was being denied a loan because he could not find a 2011 W-2 for $48.00. This would not cause a problem for loan approval at Guild. Another example is allowance of gift funds. Standard guidelines have required a borrower to have at least 5% of their own funds for down payment when using gift funds and putting less than 20% down. A Fannie program called My Community allowed for all gift funds with only 3% down. A recent change allows all gift funds with Fannie’s standard 5% down program. Guild can allow this because we sell directly to Fannie. The standard Fannie Mae program has a .5% lower interest rate than My Community which is a large benefit to the borrower.

Snoqualmie Pass Real Estate Report

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Housing Affordability at Record High for Real Estate Home Ownership!

The Bellevue Real Estate Report

Housing affordability is still at a record high, according to the National Association of Realtors (NAR). It is at the highest level since record keeping began in 1970. This is based on the relationship between median home price, median family income and average mortgage interest rate.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said this latest data underscores buyer opportunities in today’s market. “This is the first time the housing affordability index has broken the two hundred mark, meaning the typical family has roughly double the income needed to purchase a median-priced home,” he said. “For buyers who can qualify for a mortgage, now is a very good time to become a homeowner.”

Projections for the remainder of 2012 indicate that this affordability high will continue and rates will remain low. “Housing inventory levels have declined to a point where conditions are becoming much more balanced in much of the country,” Veissi said. “If access to credit improves, we could see a much more meaningful increase in home sales and broader stabilization in home prices with modest gains in areas with stronger job growth.”

Despite these incredible buyer opportunities, builder confidence is down. The National Association of Home Builders (NAHB) reports that builder confidence for newly built, single-family homes declined for the first time in seven months.

“What we’re seeing is essentially a pause in what had been a fairly rapid build-up in builder confidence that started last September,” said NAHB Chief Economist David Crowe. “This is partly because interest expressed by buyers in the past few months has yet to translate into expected sales activity, but is also reflective of the ongoing challenges that are slowing the housing recovery – particularly tight credit conditions for builders and buyers, competition from foreclosures and problems with obtaining accurate appraisals.”

This has been an ongoing concern for many market activists. While housing affordability is at an all-time high, gaining access to credit is a tough road for many would-be buyers. Additionally, some would-be buyers are still wary of the market and are waiting on the sidelines for the economy to improve or market conditions to stabilize.

Regionally, results varied. The Northeast was the only region to see a gain in builder confidence, posting a 4 point gain on the HMI scale. The West remained unchanged, but both the West and South posted declines. Single-family home production held steady for the month. The multi-family sector saw a double digit decline, according to the U.S. Commerce Department.

Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, FL, reported, “While more consumers appear to be seriously considering a new-home purchase, builders remain very cautious about starting new projects until they see more actual sales materializing.

The Bellevue Real Estate Report

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Snoqualmie Pass Real Estate, Mortgage, and Economy 5/5/12

Here is the Snoqualmie Pass Real Estate Report for May 5, 2012:

Mortgage Rates Bounce Around Historic Lows : Mortgage Bond pricing, which determines interest rates, have moved solidly back in to historic territory and appear to be staying there for some time. US Treasury Rates are also back to historic low levels we have seen before. Treasuries are going for their biggest monthly gain since September as slowing U.S. economic growth and concern Europe’s debt crisis is worsening, increased demand for the relative safety of US treasuries. Mortgage bond pricing has benefited by the same factors. Spain going into its second recession since 2009 and economists said U.S. reports this week will show growth in manufacturing and services slowed. Not only Spain, the UK is in a double-dip recession since the 1970s as its longest peacetime slump for a century persists. While the grim prospects of investors finding returns in world stock markets is keeping rates low, there is concern that current low returns in bond markets will drive investors to move out of these assets and take risks elsewhere. This would cause rates to rise. I survey of economists shows most believe interest rates will rise soon due to this factor. With rates at 60 year lows the odds are against them staying here or moving lower. A systemic meltdown in Europe would trump all normal motivations.

Take this job and love it. And the Labor Department’s Jobs Report for April showed that fewer than expected people are able to do this, as fewer than expected jobs were created. Read on for details and what they mean for home loan rates.
The Jobs Report showed that 115,000 jobs were created in April, with 130,000 private sector jobs offsetting government job losses. This number was a disappointment and below expectations. The only silver lining in the report were upward revisions to the previous month’s readings which added 53,000 more jobs than what was previously reported.
The unemployment rate dropped a tick to 8.1% — the lowest since January 2009. However, the decline was mainly due to the labor force shrinking by 300,000, rather than by robust job growth. And as expected, we are starting to hear more and more about the Labor Force Participation Rate (LFPR). The LFPR dropped to 63.6, the lowest ratio since December 1981. Why is this important? The LFPR gives us a clear read of who is working and who is not. And if someone is not participating, then they are probably receiving some sort of social security or unemployment insurance. The bottom line is that it is tough to pay down debt when there are not enough people participating in the labor force.
Overall the Jobs Report was underwhelming and, unfortunately, further accommodative monetary policy or even more Bond buying (known as Quantitative Easing or QE3) will have a very limited effect on job growth. What’s more, the debt drama in Europe continues to escalate, as both Italy and Germany reported higher than expected unemployment rates, while Spain has slipped into its second recession since the financial crisis.
The events in Europe and potential softening of our economy have resulted in home loan rates remaining near historic lows. That means now continues to be a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.
Europe Seems Headed For Protracted Tough Times ; the slow downs in Europe are causing concerns for a slowing world economy. The austerity plans, though necessary, have been forced on these countries with sovereign debt problems to help their economies prevent the suffering of high costs of borrowering but is back-firing in terms of economic health. Before it is over we are likely to see huge push-backs from citizens as wages and jobs are fall. Germany continues to control the situation as they have to sign off on any bail out plans. They are protecting their wealth and not willing to allow itself to be dragged into the problem to deeply. Germany is the key to re-structuring European debt and cold nix a plan that has been set in place for months. If the plan does not work, as currently indicated, the EU, ECB and IMF will have to re-think the debt issues. If they do not, Europe could be headed headed to depression and likely riots in the streets across the region.

Everything looks positive for the US interest rate markets at the moment but most economists surveyed are forecasting the 10 yr note yield will be at 2.25% by the end of June; if they are correct, which can be debated, the mortgage market is at or close to its best levels for months to follow. Regardless of the forecasts, the present level of interest rates remains the best in 60 years. We hear a lot of talk that potential buyers of homes or those wanting to re-finance are waiting for rates to fall more. While anything in this climate is possible, the likelihood of substantially lower mortgage rates is remote. Mainly because at some point at these levels investors will realize that investing in very low interest rates is difficult to justify. The support in bonds now is two-fold; safety as Europe could blow up at any time and what looks like a decline in stocks is increasingly likely. UK GDP declined in the last two quarters. The increasingly serious question for Europe is whether the massive austerity cuts demanded have failed to gain support and are for a number of countries unachievable, leading to further deterioration of economies and dragging other global economies down with it. In the US economists predict Labor Department data this week will indicate U.S. hiring increased in April, though not enough to reduce the jobless rate. Consumer spending climbed in March, but a little weaker than estimates. The concern we have for the 10 yr is that it still has not shown the ability to hold under 1.90% on rallies going back to October.

Real Estate Miscellaneous Stats:

King County Home Prices On The Rise: Lack of supply is making it slim pickings for home buyers in many areas of King County. Median value for April was up 3% from one year ago at $360,000.00. Historic low interest rates and improving employment in our area are causing the researchers at the UW Runstad Center for Real Estate Research says we could see a strong prime real estate season coming this year. Listings are down 38% from last year. Distressed property experts continue to predict a large increase in foreclosed properties coming on the market over the next year but some suggest banks are being more sensitive to keeping a slower supply coming to market in the interest in keeping up values. A tight rental market is causing more people to consider buying. A 3 year low in vacancy rates at 4.6% is causing renters to have less choice and higher prices. Prices remain location dependent as Southwest King county continue to see price declines while Seattle city prices are up 10.4% from one year ago with a median value of $425,000.00. Snohomish County prices are also up about 10% from last year.
Interest Rates Set New Historic Lows: The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.04% from 4.05%, with points decreasing to 0.40 from 0.45 (including the origination fee) for 80% loans. This is the lowest 30-year fixed interest rate recorded in the history of the survey. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.27% from 4.36%, with points increasing to 0.44 from 0.36 (including the origination fee) for 80% loans. This is the lowest 30-year jumbo interest rate recorded since MBA started tracking the series in January 2011. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81% from 3.83%, with points decreasing to 0.52 from 0.61 (including the origination fee) for 80% loans. This is the lowest FHA interest rate recorded in the history of the survey. The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.32% from 3.33%, while points remained unchanged at 0.41 (including the origination fee) for 80% loans. This is the lowest 15-year fixed interest rate recorded in the history of the survey.

February New Home Sales Revised Higher in February; A revision of new home sales for the month showed a sharp increase in the number of new homes sole in February. Many analysts are suggesting the numbers indicate the market is turning as 328K new homes were sold in March and February was revised to 358K.

March housing starts and building permits; starts were expected to be up 0.3%, they fell 5.8% the lowest level since Oct 2011, permits were thought to be -0.9%, they increased 4.5% to 747K the highest level of permits since Sept 2008. The starts headline didn’t impress; however multi-family starts were down 16.9% while single family starts were down just 0.2%. This is a positive sign for residential housing.

March existing home sales expected up 0.7% were down 2.6% to 4.48 million annualized; year over year sales of existing home sales are up 5.2%. Inventory levels declined 1.3% to 2.37 mil homes for sale, a 6.3 month supply. Listed inventory is 21.8% lower than in march 2011. The median price of sales $163,800.00 up 2.5% from March 2011. The tighter inventory is making some predict further price increases in many markets.

March National Association of Realtors pending home sales were expected up +0.5% but jumped 4.1%, abd year over year up +12.8%. This is a very good report. Pending sales are contracts signed but not closed. Contract cancellations have been running high as credit issues continue to drag on mortgage markets.

Not Like The Good Old Days: In 2006 45% or all first time homebuyers used $00.00 down loan options to purchase their homes.

Loan Program Of The Month. Guild Direct To Fannie Program: Guild Mortgage is unusual in that they originate loans and sell the directly to Fannie Mae. Most mortgage banking companies have to sell their loans to another larger banking institution which add their own rules and overlays to the underwriting parameters. This option gives Guild much more underwriting flexibility than almost all other lenders in our area. A recent example of this was a story relayed to me by a realtor who’s client was being denied a loan because he could not find a 2011 W-2 for $48.00. This would not cause a problem for loan approval at Guild. Another example is allowance of gift funds. Standard guidelines have required a borrower to have at least 5% of their own funds for down payment when using gift funds and putting less than 20% down. A Fannie program called My Community allowed for all gift funds with only 3% down. A recent change allows all gift funds with Fannie’s standard 5% down program. Guild can allow this because we sell directly to Fannie. The standard Fannie Mae program has a .5% lower interest rate than My Community which is a large benefit to the borrower.

Snoqualmie Pass Real Estate Report

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Snoqualmie Pass Real Estate, Mortgage, and Economy 4/28/12

Here is the Snoqualmie Pass Real Estate Report for April 28, 2012:

Mortgage Rates Continue In Historic Territory and Set New Historic Lows: The news out of Europe continues to be a concern for the world economy. See details below. More bad news from Spain, Ireland, Greece and now worries about France are doing what most thought and keeping rates low. The austerity measures to reign in debt are slowing those nations economies which contributes to bad employment numbers and questions as to where growth will come from to pay off the bail out measures. This is causing slowing in China and other exporting Asian counties. The US economy continues to be the bright spot but is anything but robust. These circumstances are creating a consensus that the world economy will be sluggish at best over the foreseeable future. This sentiment is causing investors to seek returns in the US Bond markets which is keeping rates low. The US stock market has been giving reasonable return so rates have not changed significantly. The bond market pricing has not returned to historic low levels but survey interest rates set new records. Lenders may be giving up some profitability to attract business as it has speculated for some time that rates should be lower in the past based on bond pricing. See details below.

“I’m still standing – yeah, yeah, yeah.” Elton John. And after last week’s Fed meeting, Bonds and home loan rates are still standing near record best levels. Read on for details.
After last week’s regularly scheduled meeting of the Federal Open Market Committee (FOMC), Fed Chairman Ben Bernanke acknowledged that conditions in our economy are improving modestly, but he noted that the housing market remains depressed. One example of this is New Home Sales, which fell 7.1% in March to 328K units on an annual rate.
Bernanke also noted that inflation is higher in the short-run due to higher energy costs, but that the Fed expects prices to moderate and remain in check longer-term. Remember, inflation hurts the value of fixed investments like Bonds (including Mortgage Bonds, to which home loan rates are tied)…so inflation staying in check is crucial when it comes to home loan rates remaining near record best levels.
One important subject the Fed didn’t mention in their Policy Statement was another round of Bond buying to stimulate our economy (known as Quantitative Easing or QE3). This wasn’t much of a surprise because — after several moves to prop up the economy — the Fed must see where upcoming economic reports go before venturing to underwrite the economy further. If the housing market remains depressed and the economy doesn’t pick up steam, QE3 could be a very real possibility.
And there was a bit of a sluggish read on our economy last Friday, after the Fed’s mid-week meeting. The advanced (first of three readings) of Gross Domestic Product (GDP) for the 1st Quarter of 2012 came in at 2.2%, well below expectations. This was also well below the 3% final 4th Quarter 2011 GDP reading. Within the report it showed that the personal consumption expenditure inflation reading rose at the fastest pace since the 2nd Quarter of 2011. This is definitely something the Fed is watching closely.
As 2012 continues to unfold, inflation, the housing market, our sluggish economy, and our ever-growing debt are important issues that the Fed and our government need to address. Seeing the debt crisis in Europe escalate must put a sense of urgency on our government to reign in our annual budget deficit and overall debt. This mix of factors will continue to impact the direction in which Bonds and home loan rates move in the weeks ahead.
The good news is that now continues to be a great time to purchase or refinance a home, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.
Europe is in economic chaos as the debts of many countries are dragging its economy down; The Euro nations owe 386 billion euros ($508 billion) in bailouts for Greece, Ireland and Portugal after those nations were forced to seek rescues when their borrowing costs became unsustainable. Concern that Spain and Italy may follow has led their bonds to decline for six weeks, pushing their cost to borrow toward the 7% level. This is considered unsustainable and is the factor that triggered the aid programs to other nations. The EU’s plan for countries in the region to drastically cut spending in massive austerity moves may be back-firing. The demanded cuts put on Greece, now Spain and Italy; not to forget Ireland and Portugal, have caused the economic outlook to worsen sending Europe back into recession and adding concern that the cuts in spending may not be achieved increasing the possibility of sovereign defaults. The deterioration in Europe is further stressed with the French elections where Sarkozy was unable to get enough votes the first time around against his opponent that is against many of the plans agreed on between France and Germany.

Real Estate Miscellaneous Stats:

Case Schiller Index Shows February Home prices down 0.8% on the month: The 20 city composite index continues to show weakness in the national housing sector of the economy. Of these cities 16 had price declines while only 3 had price increases compared with January numbers. The annual decline now measures 3.5% and overall prices have hit a 10 year low point. Some are taking solace in the fact that the seasonally adjusted numbers show the first price increase since April 2011 but S&P says the unadjusted number is more reliable. These macro numbers do not give a complete picture of what is happening in local markets where many areas of these cities are seeing price increases and tight inventory while the outlying area price declines skew the values down for the whole area. Home values in Atlanta, Charlotte, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa all were the worst since the housing bubble burst. Phoenix by contrast has seen prices rise 3.3% on an annual basis, which is the second month of positive 12-month returns and the fifth straight monthly gain. San Francisco: Prices down 0.7% monthly and 4.1% annually. Seattle: Prices down 0.8% monthly and 2.9% annually. Distressed inventory continues to drag the markets down even though there have been limited numbers of homes available in many cities. Banks are said to be stepping up placing foreclosed homes on the market for sale as recent settlements of law suits with many states have removed some restraint that has been in place for many months. Some market analysts predict that foreclosures will be up to 1 million for 2012 from 800000 in 2011.
Interest Rates Set New Historic Lows: The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.04% from 4.05%, with points decreasing to 0.40 from 0.45 (including the origination fee) for 80% loans. This is the lowest 30-year fixed interest rate recorded in the history of the survey. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.27% from 4.36%, with points increasing to 0.44 from 0.36 (including the origination fee) for 80% loans. This is the lowest 30-year jumbo interest rate recorded since MBA started tracking the series in January 2011. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81% from 3.83%, with points decreasing to 0.52 from 0.61 (including the origination fee) for 80% loans. This is the lowest FHA interest rate recorded in the history of the survey. The effective rate decreased from last week. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.32% from 3.33%, while points remained unchanged at 0.41 (including the origination fee) for 80% loans. This is the lowest 15-year fixed interest rate recorded in the history of the survey.

February New Home Sales Revised Higher in February; A revision of new home sales for the month showed a sharp increase in the number of new homes sole in February. Many analysts are suggesting the numbers indicate the market is turning as 328K new homes were sold in March and February was revised to 358K.

March housing starts and building permits; starts were expected to be up 0.3%, they fell 5.8% the lowest level since Oct 2011, permits were thought to be -0.9%, they increased 4.5% to 747K the highest level of permits since Sept 2008. The starts headline didn’t impress; however multi-family starts were down 16.9% while single family starts were down just 0.2%. This is a positive sign for residential housing.

March existing home sales expected up 0.7% were down 2.6% to 4.48 million annualized; year over year sales of existing home sales are up 5.2%. Inventory levels declined 1.3% to 2.37 mil homes for sale, a 6.3 month supply. Listed inventory is 21.8% lower than in march 2011. The median price of sales $163,800.00 up 2.5% from March 2011. The tighter inventory is making some predict further price increases in many markets.

March National Association of Realtors pending home sales were expected up +0.5% but jumped 4.1%, abd year over year up +12.8%. This is a very good report. Pending sales are contracts signed but not closed. Contract cancellations have been running high as credit issues continue to drag on mortgage markets.

Not Like The Good Old Days: In 2006 45% or all first time homebuyers used $00.00 down loan options to purchase their homes.

Loan Program Of The Month. Guild Direct To Fannie Program: Guild Mortgage is unusual in that they originate loans and sell the directly to Fannie Mae. Most mortgage banking companies have to sell their loans to another larger banking institution which add their own rules and overlays to the underwriting parameters. This option gives Guild much more underwriting flexibility than almost all other lenders in our area. A recent example of this was a story relayed to me by a realtor who’s client was being denied a loan because he could not find a 2011 W-2 for $48.00. This would not cause a problem for loan approval at Guild. Another example is allowance of gift funds. Standard guidelines have required a borrower to have at least 5% of their own funds for down payment when using gift funds and putting less than 20% down. A Fannie program called My Community allowed for all gift funds with only 3% down. A recent change allows all gift funds with Fannie’s standard 5% down program. Guild can allow this because we sell directly to Fannie. The standard Fannie Mae program has a .5% lower interest rate than My Community which is a large benefit to the borrower.

Snoqualmie Pass Real Estate

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Snoqualmie Pass Real Estate, Mortgage, and Economy for 4/22/12

Here is the Snoqualmie Pass Real Estate Report for April 22, 2012:

Mortgage Rates Hover : Mortgage rates moved in a tight range this last week the continuing theme of Euro drama versus decent US economic news continues. The sentiment remains that the US economy is improving albeit slower than needed for a recovery in employment. There were some disappointing data points this week in this regard. The main US manufacturing index came in at a very disappointing level yet at the same time retail sales were respectable. Another business indicator was soft and employment numbers were disappointing yet some economic leading indicators show improvement in the near future. Some of what is driving this mixed bag are the slowing economies in Europe driven by government austerity programs. This is seen as slowing growth in China which impacts the world economy. The European problems will not go away as Spain’s bond rates continue to move higher and further threats of a downgrade in France’s credit rating keeps concerns high. One key reason for the decline in rates has been predicated on the Fed possibly doing another QE, as well as the renewed fears over Europe’s debt mess. The US economic outlook, although better, has been dampened a little with employment figures suggesting new hiring is slowing; another easing move from the Fed will not have any direct impact on employment or continued declines in US interest rates. All of these factors are likely to keep interest rates down for some time yet not likely to move them much lower. We are currently 10 basis points from all time lows. If we are to see lower rates it will have to be on increasing fears on Europe’s ability to stem defaults

Last Week in Review:

“Bad news goes about in clogs, good news in stockinged feet.” Welsh Proverb. And we certainly saw both good and bad news in the economic reports released last week. Here are the details…and what they mean for home loan rates.
On the good side, Retail Sales in March rose by a nice 0.8%, as consumers bought all kinds of products across the board. And when stripping out autos, sales still grew. This adds to the increasing trend seen in January and February and is a good sign for our economy, as consumers don’t spend when they aren’t feeling optimistic about their financial situation.
But over in the manufacturing sector it was not as pretty a picture, as both the Empire State Manufacturing Index and the Philly Fed Index came in below expectations. This is largely being attributed to a global slowdown, and experts say that the outlook for our manufacturing remains positive…but just not accelerating at the present time. Things weren’t as pretty in the housing sector either, as both Existing Home Sales and Housing Starts fell in March.
And things in the labor market were verging on ugly, as Initial Jobless Claims spiked sharply higher. The Labor Department reported 386,000 fresh Claims in the latest week, above the 375,000 that was expected…and well above the 350,000 range seen in recent weeks.
Also verging on ugly was news out of Europe. There is growing and very justified concern about Spain’s ability to pay down debt, meet new budget deficit targets, and avoid a bailout or debt restructuring. The Spanish situation has prompted the G-20 (Finance Ministers and Central Bankers of the 20 largest economies) to urge the European Central Bank to do more to contain their debt crisis as it threatens global growth. And let’s not forget that besides Spain, we still have France, Portugal, Ireland and Greece to deal with in future months and years.
So what does all of this mean for Bonds and home loan rates? There will likely be more safe haven trading into the relative safety of the US Dollar and US Bonds (which will benefit Mortgage Bonds, to which home loan rates are tied) as the uncertainty out of Europe escalates. And more bad economic reports here in the United States could add to this safe haven trading into our Bonds, just as more good economic news here would likely benefit Stocks at the expense of our Bonds and home loan rates.
This mix of factors will continue to impact the direction in which Bonds and home loan rates move in the weeks ahead. The takeaway is that home loan rates remain near historic lows and now continues to be a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.

Europe’s debt issues remain, and there is a little relaxation about the possibility of default as EU ministers are calling for the ECB to step up and buy Spain’s bonds to keep their interest rates from increasing more. So far nothing from the ECB but words implying it is “prepared” to act if necessary. The US bond market remains the safe port for investors and has been one of the reasons we have seen US rates fall over the last two weeks. US stock market is rallying this morning on the March retail sales increase, US interest rates are not seeing any selling on the better stock indexes; as long as the debt problems in Europe continue it should keep a bid in US treasuries, thus supporting the mortgage markets.

The world economy will expand 3.5% this year and 4.1% in 2013, the IMF said today in its World Economic Outlook, raising forecasts made in January from 3.3% for 2012 and 4.0% for next year. The U.S. will grow 2.1% this year and 2.4% in 2013, up from 1.8% and 2.2% in the lender’s January projections. The euro area economy is projected to decline by 0.3% in 2012, an improvement from the 0.5% in the IMF’s previous forecast. China is projected to grow 8.2% and Japan 2.0% this year. “The most immediate concern is still that further escalation of the euro-area crisis will trigger a much more generalized flight from risk,” the IMF said. “Geopolitical uncertainty could trigger a sharp increase in oil prices.” A 50% increase in the cost of oil would reduce global output by 1.25%, according to the report.
Real Estate Miscellaneous Stats:

Many Real Estate Markets Are Heating Up: In many local markets across the country, homes are being snatched up as soon as they hit the MLS. These markets tend to be close in to major employment centers where economies are in decent shape or they are very attractive to investors. Some cities are experiencing bidding wars on homes in affordable prices ranges just like the good old days pre-boom. While prices remain flat nationally, these high demand areas are seeing prices start to rise as inventory is down. In Seattle inventory has recently dropped 36%. This is due to a slow down in foreclosures and the inability for many who have lost equity to sell their homes. Competition is raging between first time buyers, investors and foreign buyers; especially in the lower price ranges. These cities are considered the 10 tightest based on change in inventory from Feb 2011 to Feb 2012

1. Denver CO. Inventory down 42%.
2. Portland OR: Inventory down 38%
3. Seattle WA: Inventory down 36%
4. San Jose CA: Inventory down 34%
5. Salt Lake City UT: Inventory down 31%
6. Sacramento CA: Inventory down 30%
7. San Francisco CA: Inventory down 29%
8. Birmingham AL: Inventory down 29%
9. Memphis TN: Inventory down 29%
10. Richmond VA: Inventory down 29%

These numbers are based on a study done by Move Inc for Realtor.com. It is a comparison of the 50 most populated markets in the US.
In the Bay Area a recovery in housing is more advanced than most others.

March housing starts and building permits; starts were expected to be up 0.3%, they fell 5.8% the lowest level since Oct 2011, permits were thought to be -0.9%, they increased 4.5% to 747K the highest level of permits since Sept 2008. The starts headline didn’t impress; however multi-family starts were down 16.9% while single family starts were down just 0.2%.

March existing home sales expected up 0.7% were down 2.6% to 4.48 million annualized; year over year sales of existing home sales are up 5.2%. Inventory levels declined 1.3% to 2.37 mil homes for sale, a 6.3 month supply. Listed inventory is 21.8% lower than in march 2011. The median price of sales $163,800.00 up 2.5% from March 2011.

Not Like The Good Old Days: In 2006 45% or all first time homebuyers used $00.00 down loan options to purchase their homes.

Recent Changes in FHA Guidelines Making Things More Difficult for Homebuyers: FHA has been the loan option so choice for many first time homebuyers ever since the mortgage market melt down. Low down payment, good rates and accommodating credit requirements make it very attractive. Officials at FHA have been attempting to manage the increasing strain on the FHA reserve fund and have had to increase the MI premiums again to accommodate losses experienced by the program. As of April 9th, any FHA case numbers will have an initial up front premium of 1.75% compared with 1% prior to the change. The annual component that gives the monthly payment has increased as well. For loan amounts above 95% LTV the premium goes from 115 basis points to 125. For those loans below 95% LTV it goes to 120 basis points. FHA loans with terms of 15 years or less remain exempt from the annual premium. In another announcement FHA informs of a change in policy regarding collection accounts, FHA previously did not require the payoff of collection accounts up to $1000.00. That has not been changed. Now borrowers will have to make arrangements to pay them off over several months or before closing. Exclusions include victims of identity theft, unauthorized use of accounts or when the accounts are over 2 years old.

Loan Program Of The Month. Guild Direct To Fannie Program: Guild Mortgage is unusual in that they originate loans and sell the directly to Fannie Mae. Most mortgage banking companies have to sell their loans to another larger banking institution which add their own rules and overlays to the underwriting parameters. This option gives Guild much more underwriting flexibility than almost all other lenders in our area. A recent example of this was a story relayed to me by a realtor who’s client was being denied a loan because he could not find a 2011 W-2 for $48.00. This would not cause a problem for loan approval at Guild. Another example is allowance of gift funds. Standard guidelines have required a borrower to have at least 5% of their own funds for down payment when using gift funds and putting less than 20% down. A Fannie program called My Community allowed for all gift funds with only 3% down. A recent change allows all gift funds with Fannie’s standard 5% down program. Guild can allow this because we sell directly to Fannie. The standard Fannie Mae program has a .5% lower interest rate than My Community which is a large benefit to the borrower.

Snoqualmie Pass Real Estate Report

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Snoqualmie Pass Real Estate

Snoqualmie Pass Real Estate