Brentwood TN Real Estate Scoop!: October 2007

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Brentwood TN Real Estate/Homes - Vanessa Stalets REALTOR®

RE/MAX Elite

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109 Westpark Dr, Suite 100, Brentwood, TN, 37027

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(615) 661-4400

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10 Factors That Drive Interest Rates

There are well over 450 different mortgage products on the market today. There are hundreds of different mortgage companies who offer slightly different versions of each of those products. And each of those products has a range of interest rates that could be offered on any given day.

#1 factor is your credit scores. Your credit history is collected by 3 different credit bureaus. When you make application for a home loan, the lender will get a credit score from each of the three credit bureaus. Most lenders use the median (numeric middle of the 3) as the score with which they will underwrite your loan. The higher your credit score, the better your credit grade. Most of the mortgage products on the market usually have a higher rate for lower scores and a lower rate for higher scores.

#2 factor is your loan-to-value (LTV) or "are you putting any money into the transaction for down payment?" Most traditional loan products that offer the most aggressive rates require at least put 5% down. When you get a mortgage that requires no down payment, your rate will be about a .25% to .375% higher.

#3 factor is your debt-to-income (DTI) ratio. Traditional underwriting guidelines require very specific documentation to prove your income. And that income must be enough so that your DTI is somewhere between 40% and 50% or of your gross monthly income, no more than 40% to 50% can go to your new housing payment and all your other monthly debts. However, many borrowers today don't meet this guideline for various reasons. They may choose a mortgage that requires little to no income and/or asset documentation which can add .25% to .50% more to the interest rate you get.

#4 factor is the escrow account. Traditional mortgages require that the lender set-up and maintain an escrow account to save and pay for your home owner's insurance and property taxes. However, many borrowers would rather manage those funds themselves. This might add slightly to the rate.

#5 factor is discount points. All rates can be adjusted depending on the desire to pay points and/or origination fees. I usually quote you rates with no points or an origination fee (0 + 0, also called a par quote). Most consumers have a negative opinion about points because of misunderstanding what points are. Points are the only tax deductible closing cost and if you are going to be in the home for 3 to 5 years or longer it might make sense to pay at least one point - I recommend never more than 2 points and "never" pay a lender origination fee because you get no tax benefit. We have a great sheet that I will send you when you get ready to lock your loan and it will have 3 rates and you can pick your own rate according to what is best for your personal situation and the time frame that you will recoup your money.

#6 factor is how soon you will be closing on your house. Interest rates are usually locked for 15, 30, or 60 days. The longer you lock-in period, the higher the interest rate will be. However, if you are building 60+ days out we have an incredible extended lock program that allows you to lock in with a protective capped rate - so if rates go up - you are protected. BUT if rate go down 30 days prior to your scheduled closing then you can lock in at the lower rate.....so it is a win-win.....we do not charge any extra closing cost like other lenders do for this opportunity only a "good faith" deposit of $500 - that is like earnest money when you write a contract - it will be credited a 100% on your settlement statement at closing.

#7 factor is who is paying your closing costs. Many borrowers have a limited amount of funds available to use in the purchase of their new home. What many do not consider is that the closing costs have to be paid in addition to the down payment. There are three options available to pay closing costs.

1. You can pay them yourself out of your pocket. This is the lowest rate option.

2. You can negotiate the seller to pay part or all of them for you. You will still get the lowest rate but the cost of the house will likely go up.

3. Your lender can pay them for you and build these cost into a higher interest rate.

#8 factor is the type of program you choose. The longer the term, the higher the rate (15 year, 30 year, 40 year, etc.). Fixed rates are higher rates than Adjustable Rate Mortgages (ARMs). The longer the ARM fixed period, the higher the rate (3/1 ARM, 5/1 ARM, 7/1 ARM, etc.) If you add an interest only options, your rate will be higher. And there are a number of other options that could add to the interest rate.

#9 factor is the amount of your new loan: If you get a loan between $50,000 and $417,000 then your loan is within the conforming loan limits. However, many times there are additional add-ons to the interest rate when your loan is outside these parameters. For example, if you have a loan between $417,000 and $650,000 your rate is probably going to increase by about .125%. If you loan amount is between $650,000 and $1,000,000 you can usually expect another .125% increase in your interest rate. And if you loan amount is over $1,000,000 then the rate may increase by .125% for every additional $1,000,000. At the same time, a loan amount under $50,000 can similarly increase your rate for each $10,000 decrease in loan amount.

#10 factor that drives interest rates is the type of property that you are purchasing. For example, most rates are based on what we call in the industry "stick-built, single family, detached, primary residence." This basically means that the home you are purchasing is a regularly built home (not manufactured or made out of unusual materials such as logs), is a stand-alone house (rather than a condominium) and is intended to be lived in by one family (rather than a home that is split into multiple living sections) and is going to be lived in by you (rather than rented out or used as a vacation home). If the property you are buying is outside of this norm, your interest rate may be affected.

*info courtesy CTX Mortgage, Franklin Tn

Vanessa Stalets
RE/MAX Elite
615-957-6333
615-661-4400
http://www.VanessaStalets.com

1 comment • Brentwood TN Real Estate/Homes - Vanessa Stalets REALTOR® • October 30 2007 04:07PM

Another Fed Rate Cut? Think so!

Review of Last Week

FINANCIALS COME CLEAN, MARKETS SHINE... The week on Wall Street began with financial powerhouse Merrill Lynch 'fessing up to a $7.9 billion third quarter write down for their collateralized debt obligations (CDOs) and U.S. subprime mortgages. This was a substantial revision upward from the $4.5 billion they told us to expect. The net result? Merrill's stock finishe d up for the week. On Friday, mortgage lender Countrywide posted a wider than forecast loss of $1.2 billion, but projected a return to profitability by the end of the year. This outlook soothed investors who sent Countrywide shares up 32%!

Honesty can be powerful, but what really turbo-charged the markets were great earnings from the techies. Leading the charge were Microsoft's strong quarterly profits, boosted by its new Vista operating system and super-hot Halo 3 video game.

The Dow rose 134.78 Friday-its best day in three weeks-ending at 13,806.70. The S&P 500 closed at 1,535.28, up 2.3% for the week, but the biggest gain came from the tech-laden NASDAQ that rose 2.9% for the week, closing at 2,804.19!

Meanwhile, oil continued its relentless climb, closing the week at $91.86 a barrel. Housing numbers continued on a downslide for Existing Homes, but offered welcome hope with rising New Home sales. (See Home Base, below.) In manufacturing, Durable Goods Orders were down 1.7% for September, an improvement over August's 5.3% drop, but below the small gain expected. Initial Jobless Claims came in above estimates, at 331,000, and the previous week's number was revised upward by 2,000, to 339,000.

The bond market is expecting at least a .25% cut from the Fed on October 31. Thanks to weekend flight to quality seekers and investors positioning for volatility next week, the benchmark 10-year Treasury ended with its yield at 4.387%. Lower yields and higher bond prices, of course, bode well for low mortgage rates and are positive indicators for the housing market.

This Week's Forecast

I SEE ANOTHER FED RATE CUT, DON'T YOU?... Wake me up Wednesday at 2:15 in the afternoon, OK? That's when we'll have the Fed's announcement on rates. No question it's a biggee. But, seriously, we'll be up early that day for Q3 GDP, Employment Cost Index and Chicago PMI, which are also key. No doubt the Fed themselves may have taken a peak at the very significant October employment reports (especially Non-farm Payrolls), but we'll have to wait 'til Friday to see how it all fits together.

Next week, we'll also be getting a range of new earnings reports that should serve as worthy bellwethers for the economy... Kellogg, Verizon, Colgate-Palmolive, Proctor & Gamble, MasterCard, Exxon Mobil and Sprint Nextel.

The Week's Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Oct 29 - Nov 2

Date	Time (ET)	Release	For	Consensus	Prior	Impact
Tu Oct 30	10:00	Consumer Confidence	Oct	100.0	99.8	Moderate
W Oct 31	08:30	Gross Domestic Product (GDP)-Adv	Q3	3.1%	3.8%	Moderate
W Oct 31	08:30	GDP Chain Deflator-Adv	Q3	2.1%	2.6%	Moderate
W Oct 31	08:30	Employment Cost Index (ECI)	Q3	0.9%	0.9%	HIGH
W Oct 31	09:45	Chicago PMI	Oct	53.0	54.2	HIGH
W Oct 31	14:15	FOMC policy statement	HIGH
Th Nov 1	08:30	Personal Income	Sep	0.4%	0.3%	Moderate
Th Nov 1	08:30	Personal Spending	Sep	0.4%	0.6%	Moderate
Th Nov 1	08:30	Core PCE Inflation- ex food & energy	Sep	0.2%	0.1%	HIGH
Th Nov 1	08:30	Initial Jobless Claims	10/27	NA	331K	Moderate
Th Nov 1	10:00	ISM Index	Oct	52.0	52.0	HIGH
F Nov 2	08:30	Non-farm Payrolls	Oct	90K	110K	HIGH
F Nov 2	08:30	Unemployment Rate	Oct	4.7%	4.7%	HIGH
F Nov 2	08:30	Hourly Earnings	Oct	0.3%	0.4%	HIGH
F Nov 2	08:30	Average Workweek	Oct	33.8	33.8	HIGH

Home Base

INFO THAT HITS US WHERE WE LIVE This week's housing story was a bad news/good news thing. Existing Home Sales for September came in at a low 5.04 million annual rate-260,000 below estimates and 460,000 below August's number. But the following day, New Home Sales came in at 770,000-just 5,000 shy of expectations and a nice gain over August's 735,000 figure.

The poor housing news further strengthens expectations for the Fed's easing rates on Wednesday. This should help keep mortgage interest rates attractive for the near term.

Additional good news included a recent study that shows more people are keeping up with their payments on mortgages made in recent months. This trend reflects the conservative lending policies adopted across the mortgage industry this year.

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months. A majority of experts and almost all active traders expect a rate cut this Wednesday. Aggressive bulls see a cut of another 50 basis points (.50%), but calmer types think it will be .25%. But the calmer types were wrong last time, when Fed Chairman Big Ben Bernanke blind-sided us all!

Current Fed Fund Rate: 4.75%

After FOMC meeting on:	Consensus
Oct 31	4.50%
Dec 11	4.50%
March 18	4.50%

Odds of change from current policy:

After FOMC meeting on:	Consensus
Oct 31	64%
Dec 11	74%
March 18	85%

*Courtesy CTX Mortgage, Franklin TN

Vanessa Stalets
RE/MAX Elite
615-947-6333
615-661-4400
www.VanessaStalets.com

2 comments • Brentwood TN Real Estate/Homes - Vanessa Stalets REALTOR® • October 30 2007 07:55AM

Market Condition Week of October 22,2007

Review of Last Week

20 YEARS AFTER BLACK MONDAY, WALL STREET SKIES TURN GREY... If you're financially minded AND have a taste for morbid celebrations, the 20th anniversary of Black Monday is hard to beat. On October 19, 1987, the Dow fell 508 points-a record 22.6% drop for the day. At today's level for the index, that would be one-day drop of over 3,000 points! Well, this week Wall Street saw nothing that bad, but five straight losing days for the Dow proved an overall downer for stocks.

Friday was the Black Monday anniversary, and the Dow sympathetically fell 366.94 on the day, ending the week down 4.1%, at 13,522.02. Let it be noted, however, the Dow is still up 8.5% for the year. The S&P 500 closed at 1,500.63, down 3.9% for the week, but up 5.8% for the year, and the NASDAQ sank to 2,725.16, down 5.0% for the five days, but up 12.8% since January. But it was the worst week for the markets since July.

On the way to Friday's "sell-a-bration" were a slew of missed earnings from the financial sector: Citigroup, Wells Fargo and KeyCorp early in the week, Bank of America and Washington Mutual on Thursday and Wachovia Friday. JPMorgan Chase beat expectations and lessened worries somewhat, while a steady read on the September Core CPI showed inflation is staying in check.

But Commerce Dept. housing numbers were the lowest in 14 years, yech! (See Home Base, below.) In addition, the Fed's Beige Book noted slowing economic growth since August, although expansion continues. So the question becomes, can the Goldilocks economy fight back, or will she be held hostage by the bears?

For the tech sector, the porridge is definitely "just right". Google hit a record high close of $644.71 for one precious share and Intel, reporting profits up 43%, saw their stock rise 4% in 5 days. Healthcare is another strong sector, with profits up 13% year-on-year. Personal income is still on the rise and unemployment is down around 4%, so this economy definitely has its strong points. Many traders, however, are talking a near-certain Fed rate cut at the end of the month. As if they knew.

Meanwhile, thanks to all this turmoil in stocks, things were doing very well, thank you, in the bond market. Driven by the flight to quality, the benchmark 10-year Treasury headed out strong, with the yield below 4.4%. These higher bond prices drive mortgage rates down, which, of course, helps all of us with a stake in the housing market.

This Week's Forecast

EARNINGS, EARNINGS, EARNINGS. AND THEN, MORE EARNINGS. By the time next week is over, two-thirds of the companies that make up the Dow and half the companies in the S&P 500 will have told us their numbers. This will give us a good idea of how the year should wind up and where the economy may be heading. Notables include Apple, Amazon.com, Boeing, Merck, Merrill Lynch, Microsoft, Motorola, Schering-Plough and Waste Management.

Wednesday we'll also be looking at September's Existing Home Sales and Thursday, New Home Sales. It'll be interesting to see how these numbers are trending, as we head into the Fall selling season. September's Durable Goods report will give us another look at the health of the manufacturing sector.

The Week's Economic Indicator Calendar

Date	Time (ET)	Release	For	Consensus	Prior	Impact
W Oct 24	10:00	Existing Home Sales	Sep	5.3M	5.5M	Moderate
Th Oct 25	08:30	Durable Goods Orders	Sep	1.5%	-4.9%	Moderate
Th Oct 25	08:30	Initial Jobless Claims	10/20	NA	337K	Moderate
TH Oct 25	10:00	New Home Sales	Sep	785K	795K	Moderate
F Oct 26	10:00	U of Michigan Consumer Sentiment - Rev.	Oct	82.5	82.0	Moderate

Home Base

INFO THAT HITS US WHERE WE LIVE This week's info didn't just hit us-it was more like a body slam. We had two disappointing numbers relating to the housing market. For September, Housing Starts came in at 1.19 million, 90,000 below estimates, and Building Permits were down 7.3%. We haven't seen numbers this bad since 1993.

But it's important to remember, these numbers describe the OVERALL market. We all know that the only area of the real estate market that matters is the local area we operate in. One local market can be very different from another. As we've reported here before, this housing downturn has curious regional anomalies. The West continues to be in a tough slump, yet in the Northeast, housing starts were up 43%. Go figure.

On a positive note, it was encouraging to see OFHEO (Office of Federal Housing Enterprise Oversight) keep the conforming loan limit at $417,000 for 2008. This will help more borrowers stay out of jumbo territory, where it has been difficult for lenders to operate during the credit crunch.
Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months. Evidence of slower economic growth amid concerns about the housing slump and credit market fallout have some experts forecasting a greater chance of a Fed rate cut at the end of the month. But others think the Fed will hold, to make sure inflation remains in check.

Current Fed Fund Rate: 4.75%

After FOMC meeting on:	Consensus
Oct 31	4.75%
Dec 11	4.50%
March 18	4.50%

Odds of change from current policy:

After FOMC meeting on:	Consensus
Oct 31	39%
Dec 11	59%
March 18	77%

*Courtesy CTX Mortgage, Franklin, TN

Vanessa Stalets
RE/MAX Elite
615-957-6333 Cell
615-661-4400 Office
www.VanessaStalets.com

1 comment • Brentwood TN Real Estate/Homes - Vanessa Stalets REALTOR® • October 22 2007 11:50AM

How often should I replace my smoke detector?

That's a great question to ask during National Fire Safety Month!

Some manufacturers recommend replacement after 5 years. If you don't have the manufacturer's information and your smoke alarms are 10 years old or older, it's time to replace them with new ones. Since smoke alarms can become desensitized over time, replacement is strongly advised.

If possible, replace old smoke alarms with interconnected alarms. These alarms are linked together so if one alarm is activated, all alarms will sound. In the event of a fire, this gives you extra time to help get family members to safety. You may also want to consider a monitored smoke/heat detector installed by a home security company.

Test smoke alarms once a month and change the batteries in your smoke alarm at least twice per year. Also, be sure there is at least one working smoke alarm on every level of your home and inside or near sleeping areas. In addition, only purchase alarms certified by Underwriters Laboratories (U.L.), an independent testing organization that sets quality and use standards for electronic and consumer products.

I personaly have the smoke alarms that are hardwired into my electrical system as well as a couple battery operated in case of power outage. Also place one in the garage, and as always it is wise to have carbon monoxide dtectors if gas is used in the home. They are relatively inexpensive and can be purchased at and Lowes, Home Depot, WalMart etc.. The bottom line is to be safe and protect your family and home.

*some info courtesy John Watkins NHI*

Vanessa Stalets
RE/MAX Elite
615-957-6333 Cell
615-661-4400 Office
www.VanessaStalets.com

2 comments • Brentwood TN Real Estate/Homes - Vanessa Stalets REALTOR® • October 22 2007 08:37AM

Heavy Hitters Step Up To The Plate, Market Review Oct 15, 2007

For the week of October 15, 2007 - Vol. 5, Issue 42

>> Review of Last Week

ARE WE DANCING WITH GOLDILOCKS...OR SCARLETT O'HARA? OK, folks, the majority of economists, media pundits and Wall Street savants are now dubbing this another Goldilocks economy (like the mid-to-late 1990's)...not too hot, not too cold, but just right. The big question: Will Goldilocks turn into Scarlett O'Hara, acting volatile, spoiled and vain, driving the bears home for their porridge?

There was enough going on to please both those who want to believe in Goldilocks AND those who insist she's just Scarlett in disguise. On Tuesday, the Fed released its Minutes from the September 18 meeting that voted in the surprise .50% rate cuts. This document revealed the Fed's stronger concern about supporting continued economic growth and lower obsession with the threat of inflation.

The week's final economic reports presented mixed messages that the markets quickly netted out as positive. The Producer Price Index (PPI) came in for September at 1.1%, above the expected 0.5%, but the Core PPI, excluding volatile Food and Energy prices, was below expectations at a modest 0.1%. However, year-over-year PPI was 4.4%, with Core PPI at 2.0%. These numbers might make an inflation-watching Fed hold off on another rate cut at the end of the month.

On the other hand, Retail Sales came in up 0.6% for the month, up 0.4% excluding autos, and still up 0.2% even when you exclude autos, gas, and building materials. This indicates a resilient U.S. consumer who is not being held back by the slowdown in the housing market as it undergoes its price corrections. Since the current Fed seems to be about supporting growth, Wall Street felt good. How good?

The Dow ended the week at 14,093.08, up 13.1% for the year. The S&P 500 set another record, closing at 1561.80, up 10.1% since January. The NASDAQ gained almost 1% for the week, closing at 2,805.68, continuing its solid 16.2% run-up for the year.

Bonds continued to slip or tread water at best, seeing neither huge economic red flags nor major inflation concerns to spark them. The benchmark 10-year U.S. Treasury note was down 12/32, with the yield at 4.6892%.

>> This Week's Forecast

THE HEAVY HITTERS STEP UP TO THE PLATE... Economy, shmeconomy-let's take a look at how much money some of these corporate giants are actually making. Next week we'll get hit with a barrage of earnings reports from a bunch of heavy hitters. Thirteen of the companies that make up the Dow are due to report results-plus more from the financial and technology sectors that are currently commanding everyone's attention.

In addition to seeing how well the big guns are firing, the week will give us a good look at our industrial health, with the Empire State Index on Monday and Industrial Production and Capacity Utilization numbers come Tuesday.

>> The Week's Economic Indicator Calendar

Date	Time (ET)	Release	For	Consensus	Prior	Impact
Mon Oct 15	08:30	NY Empire State Index	Oct	14.0	14.7	Moderate
Tu Oct 16	09:15	Industrial Production	Sep	0.1%	0.2%	Moderate
Tu Oct 16	09:15	Capacity Utilization	Sep	82.2%	82.2%	Moderate
W Oct 17	08:30	Consumer Price Index (CPI)	Sep	0.2%	-0.1%	HIGH
W Oct 17	08:30	Core CPI	Sep	0.2%	0.2%	HIGH
W Oct 17	08:30	Housing Starts	Sep	1285K	1331K	Moderate
W Oct 17	08:30	Building Permits	Sep	1300K	1332K	Moderate
W Oct 17	14:00	Fed's Beige Book				Moderate
Th Oct 18	08:30	Initial Jobless Claims	10/13	NA	308K	Moderate
Th Oct 18	10:00	Leading Economic Indicators (LEI)	Sep	0.4%	-0.6%	Low
Th Oct 18	12:00	Philadelphia Fed Index	Oct	8.0	10.9	HIGH

>> Home Base

INFO THAT HITS US WHERE WE LIVE More and more, it seems that success in today's real estate market depends on buyers and sellers being knowledgeable about what's going on. Today that can require giving them a detailed analysis of the marketplace coupled with an astute business sense.

Sellers need to feel totally confident in setting their price for the current market. Buyers need to recognize that the greater affordability that's now out there is actually reducing the risk of further price declines in many markets.

This affordability is what can turn a down cycle around, quickly depleting inventories, with, of course, the best buys going first. A recent study showed that declining home prices during the second quarter boosted affordability in exactly this way, reducing the risk of price declines in 28 of the 50 largest metropolitan areas.

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months. Continuing evidence of fundamental strength in the economy but isolated signals that could justify mild concerns about inflation now have more experts expecting the Fed to stand pat on rates at the end of the month.

Current Fed Fund Rate: 4.75%

After FOMC meeting on:	Consensus
Oct 31	4.63%
Dec 11	4.50%
March 18	4.50%

Odds of change from current policy:

After FOMC meeting on:	Consensus
Oct 31	44%
Dec 11	66%
March 18	78%

Vanessa Stalets

RE/MAX Elite

615-957-6333 Cell

615-661-4400 Office

www.VanessaStalets.com

0 comments • Brentwood TN Real Estate/Homes - Vanessa Stalets REALTOR® • October 17 2007 01:18PM

GNAR Announces Sept Sales Numbers 25% Decline

SEPTEMBER

Closings	Median Price	Inventory
Total	2,587	22,821
Residential	2,014	$182,291	15,438
Condominium	415	$162,500	2,434
Multi-Family	32	390
Farms/Land/Lots	126	4,559

Pendings: 2,214
Days on Market/Residential: 67

Compared to August

AUGUST

Closings	Median Price	Inventory
Total	3,359	22,396
Residential	2,643	$189,719	15,172
Condominium	524	$162,346	2,450
Multi-Family	41	360
Farms/Land/Lots	151	4,414

Pendings: 2,896
Days on Market/Residential: 64

For more information go to http://www.gnar.org/GNARHomeSalesInfo

But, the question is, will October bring up the rear with better numbers?

As I have indicated before, October is historically a better month for home sales.

From what I am experiencing that answer just may be..YES!

Just before the Hollidays and after summer is over is a great time to find that dream house!

Vanessa Stalets
RE/MAX Elite
615-957-6333
615-661-4400
www.vanessastalets.com

0 comments • Brentwood TN Real Estate/Homes - Vanessa Stalets REALTOR® • October 09 2007 01:47PM

Has October and Fed Rate Cut Brought The Buyers Back?

Historically October sees an increase in sales in the Middle Tennessee area. This year we sure need it.

Has it happened?

Well yes, in a manner of speaking. Not like previous years, but in the last 2 weeks there has been a definite surge in activity. yay, right? Maybe. While there have been a couple of good clients pop up I have seen a lot of sub prime, hard to get approved or can't approve must wait loans come in as well. The return of contingent upon sale of home has also been marked here. I have several "clients" who have been trying to get approved and it is just not working. I know they are frustrated, possibly with me as well, I will not show property until a lender tells me they are good to go. Why set themselves up to get their hearts set on something only to be shot down when they don't qualify, as well as the time and expense I incur. I have had several become very offended when I told them to speak with a lender prior to viewing homes. In the middle to higher end the return has been more marked. Sellers seem to be "getting it" and negotiating more. Some buyers seem to think that a "buyers market" simply means that asking for the moon will result in aquiring it. Not so in my experience. Although sellers are more liable to negotiate in the current market temprature, it is not a fire sale. Reasonable offers and requests should still be the path to choose, you may someday be wearing the shoe on the other foot!

Vanessa Stalets
RE/MAX Elite
615-957-6333
615-661-4400
http://www.vanessastalets.com

1 comment • Brentwood TN Real Estate/Homes - Vanessa Stalets REALTOR® • October 09 2007 06:15AM

Market Condition Week of October 8,2007

>> Review of Last Week

This week on Wall Street, the truth came out on several fronts, with net positive results in all cases. True confessions began Monday with Citigroup putting a $3.4B loss from fixed income investments into Q3 and UBS taking a pretax loss of $690 million. Investors rewarded this financial candor by bidding Citi shares up $1.05 to $47.72 and UBS $1.69 to $59.94 in a big rally that pushed the Dow back above 14,000. What gives? Citi's CEO said he expected to "return to a more normal earnings environment" in Q4. What this really means is, in Wall Street's colorful parlance, Citi "kitchen-sinked" the quarter, throwing all the bad stuff on the table now so they can put it behind them and move on. The market looked at the numbers and said, ok, this isn't Armageddon-if this is the extent of the damage, we can live with it- which shows you how insignificant $3B is in the 21st century.

More economic truth came out Friday with the Labor Department's September Employment Report. There were 110,000 new jobs for the month, 10,000 more than expected. July and August figures were also revised to their true levels-93,000 new jobs in July, 25,000 more than the initial report. And the true August figure was an 89,000 gain in jobs, not the loss of 4,000 jobs originally reported. Average hourly earnings were up 4.1% and unemployment was just a tick above August at 4.7%.

Now truth be told (to continue our theme), 37,000 of those new September jobs were in government, mostly local teachers. So private sector job growth was only 73,000. Nonetheless, this report makes it hard to sell a recession. Fact is, when the credit issues get behind us, the economy is basically OK, fairly solid in fact, and we have great global growth. This good news pushed bond prices lower and home loan rates up a bit. It's now harder to see a rate cut for Halloween (when the Fed's next meets), although super bullish types argue things aren't so good that we shouldn't get one.

The week's final bit of truth-telling came with Merrill Lynch fessing up to a multi-billion dollar write-down for Q3 due to credit market turmoil and Washington Mutual charging off loan losses that cut their net 75% from a year ago. This honesty was rewarded with a $1.89 per share hike for Merrill and 79 cents a share for WaMu. The Dow ended the week at 14,066.01, up 12.9% for the year and the NASDAQ at 2780.31, up 15.1% for the year.

A bellweather for mutual funds and the Street's most important index, the S&P 500 ended at a record 1,557.59. If that weren't enough good news for us, oil ended the week down 22 cents at $81.22 a barrel-it's TRUE!

>> This Week's Forecast

ARE YOU GOOD AT READING TEA LEAVES? OK, then how about deciphering the minutes from the last FOMC meeting that delivered the big rate cuts? On Tuesday the Fed will release those minutes, so pundits can pore over the language and debate what it all means-especially for inflation, credit availability and economic growth.

For those of you who prefer clarity to conjecture, the week will also give us some cold hard numbers to ponder. Retail Sales figures for September will be out Friday before the bell rings on Wall Street and these could have high impact on the outlook for interest rates and the economy. Of only slightly lesser importance are the Producer Price Index reports coming out at the same time.

Investors will also be looking at Q3 reports from some big corporate players. They'll chew on numbers from YUM! Brands, as well as Alcoa, Monsanto, Costco and General Electric. By the way, the bond market is closed today for Columbus Day, but the others are going full steam.

>> The Week's Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Oct 8 - Oct 12

Date	Time (ET)	Release	For	Consensus	Prior	Impact
Tu Oct 9	14:00	FOMC Minutes	Sep 18			HIGH
W Oct 10	10:00	Wholesale Inventories	Aug	0.3%	0.2%	Low
Th Oct 11	08:30	Export Prices ex-agriculture	Sep	NA	0.1%	Low
Th Oct 11	08:30	Import Prices ex-oil	Sep	NA	-0.1%	Low
Th Oct 11	08:30	Initial Jobless Claims	10/06	NA	317K	Moderate
Th Oct 11	08:30	Trade Balance	Aug	-$59.0B	-$59.2	Low
Th Oct 11	14:00	Treasury Budget - may be delayed	Sep	$100.0B	$56.2B	Moderate
Fri Oct 12	08:30	Retail Sales	Sep	0.2%	0.3%	HIGH
Fri Oct 12	08:30	Retail Sales ex-auto	Sep	0.3%	-0.4%	HIGH
Fri Oct 12	08:30	Producer Price Index (PPI)	Sep	0.4%	-1.4%	Moderate
Fri Oct 12	08:30	Core PPI (ex-food and energy)	Sep	0.2%	0.2%	Moderate
Fri Oct 12	10:00	Business Inventories	Aug	0.3%	0.5%	Moderate
Fri Oct 12	10:00	U. of Michigan Consumer Sentiment	Oct	84.0	83.4	Moderate

>> Home Base

INFO THAT HITS US WHERE WE LIVE Well, Tuesday saw some less-than-great news for the housing market, as the National Association of Realtors reported Pending Home Sales fell in August 6.5% from July. This was larger than expected and a 21.5% drop from a year earlier, the lowest reading since they began tracking these figures back in January 2001. But let's step back and look at the bigger picture.

Housing is still a phenomenal investment. It took 17 years, from 1980 to 1997, for the average American home to double in value, but only 10 years, from 1997 to 2007, for it to double in value again. And, of course, while their investment grows in value, homeowners get an income tax break from their real estate taxes and mortgage interest-PLUS a great place to live!

Finally, let's remember, key to the health of the real estate market is the health of the job market. In the last five years, over 7 million workers have been added, pushing our workforce to 138 million people. As this week's employment report shows, job growth continues, as it has for 49 consecutive quarters, the longest run in our history. So even though we're in a down cycle in housing, we can assure ourselves that we have the underlying strength in jobs needed to work our way out!

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months. This week's better than expected employment report has most experts expecting the Fed to stand pat on rates this month. But this has caused more Fed watchers to forecast a cut in December.

Current Fed Fund Rate: 4.75%

After FOMC meeting on:	Consensus
Oct 31	4.50%
Dec 11	4.50%
March 18	4.50%

Odds of change from current policy:

After FOMC meeting on:	Consensus
Oct 31	46%
Dec 11	71%
March 18	85%

*Information courtesy of Tonya Esquibel. CTX Mortgage, Franklin TN*

Vanessa Stalets
RE/MAX Elite
615-957-6333
615-661-4400
www.vanessastalets.com

1 comment • Brentwood TN Real Estate/Homes - Vanessa Stalets REALTOR® • October 09 2007 05:42AM

Kitchen Remodel? Check this Out!

You're not the only one thinking about a way to update your kitchen. Home buyers and sellers are watching HGTV (Home and Garden Television) and thinking about remodeling their kitchens.

Six hundred respondents to The Digital Kitchen Study recently gave a lot of thought to the same subject. According to the study, commissioned by the Internet Home Alliance Research Council (an industry network of companies engaged in research to advance the connected home space), kitchens today are used for much more than cooking. As a result, today's families continue to look for ways to squeeze the most out of each valuable square foot.

The Digital Kitchen Study questioned male and female homeowners ages 25 to 64, with household incomes greater than $35,000. According to the findings, at least 15 percent of respondents plan to remodel their kitchens in 2007. Here are some other kitchen trends:

Twenty percent of homes have a desk/workstation somewhere in the house; 47 percent of remodeled kitchens have one. Less than 15 percent of households are able to use email or do web surfing or other computer activities in the kitchen. That's probably why TV and internet access in the kitchen are at the top of the kitchen wish list.

Respondents were also told to visualize a remodeled kitchen and choose from 22 concepts presented by the Research Council. The top concepts that captured homeowners' attention included: a digital calendar that could be accessed and updated by all members of the family; a recipe projection system with links to internet recipe websites and the ability to project recipes onto a flat surface; a universal charging center, since approximately 33 percent of households store cell phones on the kitchen counter and 50 percent keep a phone charger on the counter. Families also are looking for wireless internet connections, making the internet accessible in every room, including the kitchen.

A study sponsored by the National Kitchen & Bath Association and Virginia Tech queried participants by phone in May, 2007. Based on responses, 67 percent of households have one person doing the cooking. Responding households have an average of 12 small kitchen appliances, with about four stored on countertops. This study reported the following activities were most likely to be performed in the kitchen:

Activity / Percent
Plan meals 71
Eat in the kitchen 67

Read a newspaper 40
Watch television 39
Do crafts/play games 4

Talk on the telephone 81
Converse with family/friends 76
Entertain 41

Take vitamins/medicines 78
Do paperwork/pay bills 50
Do laundry 19
Use a computer 8
Do homework 4
Feed/care for pets 3

Here are what families said they are looking for in their next kitchen: 28 percent want a more spacious kitchen; 20 percent want new and better cabinetry with well-organized storage options; 10 percent want to increase and improve their kitchen counter surfaces. Twenty-four percent of respondents were satisfied with their current kitchens.

If you're planning to remodel your kitchen and thinking about squeezing in an office space, get creative. If you can bear to give up the space, retrofit a desk in a space that occupies a little-used cabinet. You can install a new center drawer and side panels to provide support for a computer and give your space a finished look. Designers generally recommend a desk height of 28 to 30 inches and a knee-hole depth of 25 inches.

To hide clutter, consider frosted glass instead of clear glass fronts on cabinets, and keep supplies stashed in boxes and baskets. Also plan for several electrical outlets, a telephone jack, and a cable port for internet access, preferably located above the counter. To keep those cords from tangling, secure them with twist-ties or snake them behind a false wall. If there's no room for a desk, you can consider a stand-up message center complete with message boards, key-holder, electrical outlets, three-ring binders, pens, pencils, papers and other office/workstation necessities.

To learn more about the wired kitchen, check out remodeling.hw.net or go to caba.org to read The Digital Kitchen Study.