Skip to main content

Optimism is Contagious (Posted February 8, 2016)

In a recent interview for “Housing News Report”, Jonathan Smoke – Chief Economist at Realtor.com – says that, “2016 will be our best year since 2006, but also our most normal year since 2000. We’ve lived through 15 years of abnormal trends, and after working off the negative effects of the housing bust, we’re finally seeing signs of more normal conditions.”  What?  Is this man psychic?  How does he know this?  While I’m confident Old Smokey (I’m pretty sure that was his nickname back in college) is a pretty smart guy and he didn’t get his job as Chief Economist on his looks alone, let’s look at some of the factors he most likely reviewed to make his feel-good statement.

According to Freddie Mac, fixed-rate 30-year prime mortgages were priced at 3.87% at the end of 2014 and 3.96% for the week of Dec. 24, 2015.  At the end of 2014, there were MANY people predicting that rates would be at 5% or higher by the end of 2015.  If only there were some way to bet on things like this.  Hmmm. 

What were some of the things that kept the interest rates in check and should continue to keep them in check, you might ask.  Here are just a few:

•  Uncle Sam’s Drunken Cousins: Last year, there was a lot of negative interest in the European and Asian markets – this meant there were boatloads of capital available to underwrite U.S. mortgages. 
•  Suntans & Treehugging:  With warmer weather and more people driving more fuel-efficient cars, oil demand has been significantly reduced – and with more sustainable, renewable energy options becoming available, demand for oil should continue to stay below levels we’re used to seeing.  While this is a huge problem for energy producers, it’s a major boon for U.S. consumers.  This means more disposable income for you and me. 

And for the BIGGEST reason Mr. Smoke and others are optimistic:

•  The White House Lease is Up:  Yes, it’s an election year.  While we all have to put up with listening to people who have never held a regular job tell us how they’re going to improve our lives better than the two cats standing on either side of them in a debate, there’s a silver lining to all of that – everyone and their dog who has ANYTHING to do with the economy moves heaven and earth to NOT rock the boat while the country chooses who’s going to be the Next American Idle. 


This should be a VERY GOOD year to sell real estate: stable interest rates (fingers crossed), more disposable income, and rent prices rising faster than house prices – too bad yesterday’s Super Bowl 50 loser didn’t have a scouting report this good!

Comments

Post a Comment

Popular posts from this blog

The Naked Truth About Home Buying

It’s highly likely I’ve already written about this, but I’ll try to make it entertaining at least.   There’s a guy who works in ou r office who suffers from kidney stones – and from what he’s described, “suffers” might even be a little too tame a word for it.   As an aside, though, when you ask him how painful the experience is, he gets an odd smile and says, “It’s the most intense pain I’ve ever experienced, but it’s hard to describe.   I’ve heard a lot of people compare it to the pain a woman experiences while giving birth.   To that, I must say, those people are big, fat liars!   I’ve been in the presence of a woman giving birth, twice, and her pain has to be 100 times worse.   They’re passing the equivalent of a Buick.   I’m passing a pumpkin seed.”   He’s always been a colorful fellow. He’s had this wonderful condition for over a decade now, and the stones make their appearance about every 18 months or so.   Up until recently, ...
Post a Comment
Read more

Saving Money is Music to Your Ears (Posted January 9, 2017)

For all the “old” people out there, you’ll instantly know the name Daryl Hall.   For those of you who are still on your original set of adult teeth (perhaps because you got your braces off fairly recently), Daryl Hall is a musician (the blonde half of the duo Hall & Oates – the one who DIDN’T have a mustache that looked like it was straight out of an ’ 80s adult film) with a number of albums (albums a re these big, black 12-inch vinyl “platters” that look like a pregnant CD) that have been certified as gold/platinum and hit songs to his credit, some of which he recorded himself and some he wrote for others.   Going back to 2007, he started a show on the internet called Live from Daryl’s House ; in 2011, he took it to cable where it currently airs.   The concept is relatively simple: he has musicians from all genres and eras come to his house to jam with him and his band.   In between songs, they talk about music and memories, and they usually end up eatin...
Post a Comment
Read more

Showcase Showdown (Posted October 17, 2016)

The game show “The Price is Right” – the show where 95% of what they give away is total garbage (fireproof bathmats in the shape of Ecuador, really?) – is probably each child’s first exercise in trying to guess how much something costs.   Admit it, you sat glued to the TV set either screaming at the screen so the contestant could hear you or you were sending out vibes telepathically – either way, you KNEW you were the BEST price guesser in the world . . .   until the very moment the model would reveal the real price of $732 for a set of salad tongs made of Lucite and cubic zirconia (your bid was $17, and you thought THAT was probably a little high).   But that didn’t stop you because here comes that toaster oven that doubles as a brief case – how could anyone put a price on THAT? A recent study published in the Journal of Housing Research (just let the sheer coolness of that name wash over you for a few moments) concerning pricing was interesting.   The r...
Post a Comment
Read more