Where’s the Beef?

A View from the Beach

ECONOMIC COMMENTARY
October 17, 2017 – 

 

During the past month or so, interest rates, oil prices and even gold prices have been rising. The stock market has been moving upward steadily as well, though stocks have been moving up for many years now and accelerating for the past year. With the Federal Reserve Board raising short-term rates and starting to sell assets, along with the many hurricanes we have witnessed, these higher prices are not unexpected.

In reality, it is amazing that interest rates and oil prices have stayed so low with all of these factors involved. We all would like to know where things are headed in the future–will they continue up or settle back down? The bottom line is, we can’t predict where prices and rates will go without knowing where the economy is headed. We do know the economy has been heading in the right direction since a pause which took place in the first quarter of the year.

However, we won’t have a great idea of where the economy is heading now because of the interruptions of major storms. We could have a very poor quarter or two and then have a major growth spurt because of the tremendous rebuilding that we will be undertaking. Markets always move on psychology because we can’t predict the future, but the markets are always looking for indicators of the future. Right now our indicators are likely to be even worse predictors of the future than normal. Thus, in answer to the question — where is the beef? It may be more hidden than usual.

WEEKLY INTEREST RATE OVERVIEW

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Why You Should Let the Neighbors Know When You List a Home for Sale

So, you’ve listed a home.

The neighbors are curious.

But do you realize that the surrounding neighbors could not only be your “eyes and ears,” but also help you sell the home?

A top real estate agent suggests that you meet the neighbors.

Here’s what she does—

  • Introduces herself and provides them with several flyers. Interior pictures of the home. The sales price.
  • She gives them her business card and contact information.
  • She asks them if they have any friends or relatives who might like to move into the neighborhood.
  • If the house is vacant, she asks them to report any problems—like maybe the lights get left on or a window is broken.

Here’s the thing.

Usually, when a home is listed and sold, and based on the selling price, there tend to be other homes in the neighborhood that go up for sale. Why not be the real estate agent they know (because you have introduced yourself) to list their home?

Additionally, potential buyers sometimes talk to the neighbors to ask about the area, the activities, the schools.

Being pro-active and sharing this information will help you sell the home quicker.

Question: Do you meet the neighbors when you list a home?

How to Coach Home Buyers about the Mortgage Process

I know that one of the first things you ask, when working with a new client, is if they need a mortgage to buy a home—and if they have been pre-approved for a mortgage.

If they have not been pre-approved, I’m sure you recommend that they talk to a lender (hopefully me) to make sure they qualify and at what loan amount.

However, not everyone will take your advice.

So, I wanted to share some client “scripts” that you can use that outline some of the things that lenders require.

And if you feel uncomfortable providing this information, think of this this way—it’s your commission on the line if you sell them a home and, in the end, they don’t qualify for the mortgage loan.

  • Have you checked your credit score? – One of the reasons to check your credit and your score BEFORE talking to a lender is to make sure all the information is correct. It also gives you a chance to increase your credit score because the lower your credit score, the higher your interest rate will be.
  • Do you know where your down payment and closing costs will be coming from? Lenders need to verify that you not only have the money to close your loan, but that you have money left over (called cash reserves) after you have signed the paperwork. So, you need to keep bank statements for at least 2 to 3 months. If you are getting a gift from a relative, certain rules apply and you will definitely NEED to talk with a lender. 
  • Do you have a steady job or income? The loan officer will want to make sure that you have income coming in monthly to make the mortgage payments. You will usually need to provide them with paycheck stubs or investment statements showing a history of income being received. If you are self-employed, tax returns and income statements will be required. 
  • Why get pre-approved for a mortgage? There is a difference betweenpreapproved and being prequalified. A pre-approved means that your credit has been checked and that you have the income to buy the home. The preapproval letter is one of the advantages that you have over other buyers—especially if you get into a bidding war with other home buyers. 
  • Don’t stretch your budget – A mortgage payment that takes most of your paycheck can leave you strapped for cash. You may not have enough money to make repairs, have fun or for future savings.

The scripts are an easy way to advise your homebuyers without being intrusive. Please call so I can help pre-approve your homebuyers.

Nine Extraordinary Uses for Ordinary Household Items

In a recent issue of Real Simple Magazine, they published a list of ordinary items that you probably have in your home right now—and shared how they can serve double-duty. Here is a list of the items and alternative ways to use them.

Ice-cube tray – Organize desk supplies like paperclips and rubber bands. Use them to store buttons and beads. Use them as an organizer for jewelry.

Uncooked spaghetti – When you don’t have a match long enough to light a candle sitting in a deep candle holder, use a piece of uncooked spaghetti. They easily catch on fire and stay lit for a long time.

Colander – Keep flies away from food by inverting the colander over the plate during your outside cookout.

Baby oil – Easily remove latex paint from your skin by squirting baby oil on a cotton ball or rag and wipe away.

Dental floss – Use unwaxed, unflavored dental floss to easily cut a cheese cake or layer cake. You won’t have the crumbs and mess of using a knife.

Antacid tablets – Drop a tablet in a little water to remove stains from the bottom of vases. Just let sit for several minutes and wipe clean.

Cotton swabs – Touch up paint chips on walls, cabinets or furniture by using a cotton swab instead of breaking out the paint brush.

Pillow case – Make lettuce last longer by placing it in a pillow case. Then put the lettuce and pillow case in a plastic bag in the fridge. The cotton will absorb the moisture and it will last longer than in just plastic.

Laundry basket – Line a laundry basket with a trash bag and fill with ice if you need an extra cooler for your party.

So, how do you use some of your ordinary household items in a unique and different way?

The Story Continues

A View from the Beach

ECONOMIC COMMENTARY
October 10, 2017 –

 

With the release of last month’s job numbers, we were able to get a glimpse of the major effects of three major hurricanes hitting within a few weeks. We have seen many pictures of devastation from Texas to Puerto Rico. The jobs report was one more picture which has made the national numbers look bad, even considering the drop in the national unemployment rate, but the national numbers still dwarf the drastic effects upon the local economies and millions of lives.

This story will not be a short story. It will be a novel with many chapters. It starts with mass devastation and the delivery of food and water, as well as other supplies of survival. It will end differently for many. Some will relocate and many others will be part of the rebuilding process. That rebuilding process will create thousands upon thousands of jobs. This is likely to result in construction job shortages in other parts of the country.

How long will it take to recover? No one knows the answer to that question. Many economic reports will be skewed as these regions go through the process. Even the federal budget deficits will be affected by a slowing economy and increased funds spent on recovery efforts. Along with the budget deficits, there will be a spike in mortgage defaults. But again, the housing stock will be rebuilt. For market analysts, this will be a very interesting story, but not nearly as meaningful as those affected locally.

WEEKLY INTEREST RATE OVERVIEW

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Clouded Jobs Report

A View from the Beach

ECONOMIC COMMENTARY
October 3, 2017 –  

The jobs report is a very significant economic indicator. Yet, it seems that every monthly jobs report takes on some extra form of significance. This one is certainly no exception, with the report coming in the midst of the recovery from two natural disasters hitting major population centers within the United States. Hurricanes Irma and Harvey caused major damage to some of the largest states in America — Florida and Texas — as well as affecting several other population areas.

Along with major damage, lives were changed radically. It is anticipated that we will certainly see the effects of these disasters in our economic numbers, and the jobs report should be the first major indicator. It was no surprise that initial claims for unemployment were up in the weeks after the hurricanes hit and that these additional claims were concentrated in the affected areas. The numbers may not be affected radically on a national level, but there are likely to be major changes regionally and these will affect the national numbers. How much? We will know by Friday.

The good news is that these numbers should be temporary, as many jobs will be created in the rebuilding of affected areas. So, the markets will be prepared for one or two down months, but should be anticipating a rebound pretty quickly. The Federal Reserve Board meets two more times this year and most are expecting one more rate increase in December. The size and extent of the damage and rebound may very well be one of the determining factors in this decision.

WEEKLY INTEREST RATE OVERVIEW

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Amazing Resiliency

A View from the Beach

ECONOMIC COMMENTARY
September 26, 2017 – 

Earlier this month, the bull market in stocks became the second strongest in history with a gain of over 260% from the bottom reached in 2009. It was already the second longest bull market in history. This is still way short of the strongest bull market in history, which achieved gains of almost 600% for the period of 1987 to 2000, but still very, very impressive. The secret to this market’s success? Steady growth with low inflation. Of course, you can also add that this bull market followed precipitous drops during the financial crisis and thus much of it was clawing its way back up.

Regardless of where it has come from, stocks have moved a long way through significant challenges and the question on everyone’s mind is — how long can this rally go on? As you would guess, there are opinions on both sides, with many analysts saying there is room to run, and others saying that stocks are being inflated by artificially low rates courtesy of the Federal Reserve Board.

The Fed met last week amid this rally, but at the same time also had to consider additional challenges, such as national disasters and a ramp-up of international tensions. The Fed’s decision to keep short-term interest rates unchanged and begin the paring of assets in October was right in line with pre-meeting expectations, though some had hoped for a delay based upon the recent challenges. Is the Fed justified in keeping rates so low, or should they hold off on the next hike expected in December — until they see how well our economy recovers longer-term from the hurricanes which have hit so hard? Only time will tell, as we cannot predict the future any better now than we could in 2009.

WEEKLY INTEREST RATE OVERVIEW

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