The Feds easing up on rates…

New Fed Chair Showing More Flexibility on Interest Rates

Martin Crutsinger |  The Associated Press | Posted Apr 28th 2014 | link
APFederal Reserve Chair Janet Yellen

WASHINGTON — In her first weeks as Federal Reserve chair, Janet Yellen has made one thing clear: The Fed will keep all options open in deciding when to raise interest rates from record lows. Gone are the benchmarks that her predecessor, Ben Bernanke, used to try to guide investors: That by a certain point in the future or when unemployment reached a specific rate, the Fed would consider slowing its stimulus for the economy.

In a speech this month, Yellen said the Fed “must respond to significant unexpected twists and turns the economy may take.” On Wednesday, when it ends a policy meeting, the Fed will likely repeat that theme and echo a point it made after Yellen’s first meeting as chair last month: That even after the job market strengthens and the Fed starts raising rates, it will

The big question is when the Fed might start raising its key short-term rate from zero, where it’s stood since late 2008. That rate has remained a source of economic support because it keeps many borrowing rates low.

likely keep rates unusually low to support a still-subpar economy.

Yellen’s message of flexibility may help convey the Fed’s willingness to respond to abrupt shifts in the economy. Yet it can also be tricky. It can leave investors uncertain and fearful of a sudden shift in the Fed’s approach to interest rates. Financial markets hate uncertainty.

The Fed will be meeting in a week when the government will issue a flurry of reports on the economy — from manufacturing growth and consumer spending to home prices, consumer confidence, economic expansion and job gains. Collectively, they will help sketch a more detailed portrait of the economy.
And they are among the many indicators Yellen has stressed the Fed must monitor to fully assess the economy’s health and decide when to start raising rates.

That message marks a shift from the approach Bernanke took over the past five years as the Fed struggled to strengthen the economy after the Great Recession. Under his leadership, the Fed sought to be as publicly specific as possible about its intentions. And it did so by focusing primarily on the unemployment rate. In December 2012, for example, the Fed said it intended to keep its benchmark short-term rate near zero at least as long as unemployment remained above 6.5 percent. The idea was to signal roughly how long the Fed was committed to keeping borrowing rates at record lows to spur spending and economic growth.

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U.S. home values up 5.7% year-over year in the first quarter!

Putting the Recession in the Rearview: Home Values at or Near Peak Levels in 1,000+ US Cities

Homes in more than 1,000 cities and towns nationwide either already are, or soon will be, more expensive than ever, erasing any losses in value experienced during the recession, according to Zillow.

U.S. home values climbed 5.7 percent year-over year in the first quarter, to a Zillow Home Value Index of $169,800. National home values have climbed year-over-year for 21 consecutive months, a steady march upward that has helped put the housing recession almost entirely in the rearview mirror in 1,080 of the more than 8,700 cities and towns covered by Zillow.

In these areas, home values are already at or expected to reach pre-recession levels in the next year, including in many hard-hit areas. Among the 6,781 cities and towns covered by Zillow that experienced home value declines of 10 percent or more during the recession, values in 527 have either fully recovered or are expected to recover fully by the first quarter of 2015.

In a majority of metros, housing affordability is and will remain strong even as prices continue to rise. But homes in a handful of metros — including San Francisco, Los Angeles, San Jose and San Diego — are already unaffordable, with the share of residents’ incomes currently devoted to monthly mortgage payments exceeding historic norms.

“The lows of the housing recession are becoming an increasingly distant memory as home values reach new highs and homes become more expensive than ever in many areas. This is a remarkable milestone coming only two and a half years after the end of the worst housing recession since the Great Depression, and is a testament to just how robust this housing recovery has been,” said Zillow Chief Economist Dr. Stan Humphries. “So far, this steady appreciation has not created affordability issues in the majority of places. But there are a handful of markets where affordability is again a challenge, even with mortgage interest rates incredibly low. Mortgage interest rates won’t stay low forever. And rents have also been marching steadily higher for several years. As a result, the housing affordability issues we’re already seeing in select markets could become a much more widespread concern a few years from now. As affordability worsens, more residents will be forced to search for affordable housing farther from urban job centers, and home values in some areas may have to come down.”

Nationally, rents rose 2.7 percent year-over-year in the first quarter and 0.9 percent compared to the fourth quarter of 2013, to a Zillow Rent Index of $1,315. U.S. rents have risen year-over-year for more than two years straight.

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Is making dinner a dream in your kitchen? They are in these!

These 14 Incredible Kitchens Are What Dreams Are Made Of

Great meals can be made in a kitchen of any size — it’s really all in how you organize your space. While our microscopic apartment kitchens won’t be undergoing any renovations anytime soon, we’re dreaming about these fantastic “gourmet” kitchens from our friends at Maybe one day…

  • Now THIS is what a classic white kitchen should look like.
    W. Lake Sammamish Parkway by Lavallee Construction
  • Silver and gold are nice — but copper is so now.
    Lake House Renovation by Walker Woodworking
  • Stone isn’t just for islands and countertops.
    Refined Lonestar by Sojo Design

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Nursery revelations – paint the little one’s room in unexpected colors…

9 Rooms That Prove Nurseries Can Be The Most Stylish Spot In The House

Of all the decisions new parents have to make, color is rarely ever one of them. There’s pink for girls and blue for boys, and yellow if you’re interested in something a little less stereotypical. At least that’s what society tells us. It might be hard to imagine as you’re looking through a catalog for your own children (or nieces, nephews and the like), but there was a time when the girls’ department wasn’t filled with pink merchandise … but the boys’ department was. And this wasn’t so long ago: Think sixty-something years or so.

Before World War II ended in 1945, color rules operated in reverse, with boys donning pink gowns and blue being considered a “much more delicate and dainty tone,” for girls, a departure from the gender norms we’ve come to know that’s currently on display in an exhibit called “Think Pink” at Boston’s Museum of Fine Arts.

Pink was recommended for boys as far back as the 1700s, “because it’s a stronger and more passionate color, and because it’s actually derived from red,” curator Michelle Finamore told NPR.

Granted, a pink suit is one thing, but outfitting your baby boy’s room in the rosy hue? We understand that might take a little more time (and a lot more shifting of our cultural norms). In the meantime, we’re venturing over to other parts of the color wheel with these 9 rooms that do just that, along with decorating tricks that easily bridge the gender divide.

  • Blue For Girls
    Chip Lay
    Blogger Joni Lay found her “baby blue” room paint on the more aqua end of the spectrum, a shade that could easily suit either a boy or a girl, especially since it’s anchored by black and white. An arrangement of family photos above the changing table stand in for overly babyish art and double as a “family tree” of sorts.
  • Dark Walls
    Nadia Drapos Photography
    Chocolate brown stands in perfectly for the more predictable pink in this twin girls’ room by designer Natalie D’Urso of Milka Interiors. D’Urso brought in feminine flourishes by way of polka dot wall decals, pastel bedding and a set of pink suitcases instead, which means there’s no repainting required if the room ever assumes another use.

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Looking for your home soul mate?

Perfect House, Perfect Spouse? How Finding Your Dream Home Is Like Dating

Michelle Sero | Huffington Post | April 2, 2014 | link


Do you prefer them long and narrow? Clean and well-maintained? With heavenly hardscapes and a nice backyard? Most women don’t know what they want in a home until they have explored their options. Sound familiar? Shopping for a home isn’t so different from dating, as I learned firsthand while trolling New York City for the perfect match. I ogled and objectified my way through Wall Street’s condominiums for one year, lacking a real sense for what I wanted, or rather, what I needed. Increasingly, the two concepts became distinct, pulled apart like taffy until they’d hardened into resolute towers of adjectives and declarative statements. I’m not even picking up the phone if it doesn’t have two bedrooms. No view? Don’t waste my time. These kinds of deal-breaker absolutisms eventually gave way to softer, more seasoned requirements, like, give me good fixtures and I can forego the tub, and if the association fees are fixed for five years, I can go higher on my monthly mortgage.

With the forming of this second list (my needs list), I was becoming savvier and more sophisticated — a woman of the real estate world. But damn! Early on in the process, I wish I’d had a fairy godmother, or better yet, an app to guide me. The entire home-buying journey was a soul-baring process that required unprecedented confidence and perseverance to prevail against scrutiny, disappointment, deception and, of course, rejection.

If dating and finding an apartment in New York City has taught me anything, it’s this: It doesn’t just happen. It takes knowing yourself and knowing what makes you happy, and knowing that no house will satisfy all of your hopes and dreams. And that’s OK. Like a great partner, the right home will likely fulfill needs you didn’t even know you had. The biggest challenge is being able to identify this match. Sometimes it is right under your nose, buried between the old haunts, the turnoffs and the plain lanes. Somewhere out there sits your house, and finding it will make all of those past heartaches worthwhile.

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Step up to stunning staircases

9 Staircases Worth Every Step

Huffington Post |  March 31, 2014 | link

Often times staircases can be found tucked away in back hallways, but for these designers the staircases are well designed and celebrated. These staircases are brought to the forefront, transcending their otherwise purely functional use to become true works of art.

Studio William Hefner

Left:Seth Howe Right:BWArchitects

Peter Pennoyer Architect

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For 20 years, $1M+ homes have made up 1% of sales. What do these 1%ers mean?

A Look at Housing’s One-Percenters

Jann Swanson | Mortgage News Daily | April 25, 2014 | link

CoreLogic Chief Economist Mark Fleming suggests that an examination of housing’s one-percenters might be as valuable an analysis as a glance at that segment’s income and/or wealth distribution.  Historically, at least for the last two decades, homes that have sold for over $1 million have made up 1 percent of sales, a useful proxy.

The share remained below 1 percent through most of 2003 than began to move, reaching as high as 1.8 percent when prices peaked in mid-2006.  But even as prices began to deflate, the share of upper-priced homes continued to rise, reaching 2.2 percent at the peak in June 2007 – more than twice the share 5 years earlier.  And even as prices suffered in general, the market share of million dollar homes held at an average of 2 percent through August 2008; twice the traditional share.

The collapse in high-end real estate market share coincided with the collapse of the financial markets themselves starting in September 2008.  By February 2009 high end sales had retreated back to 1 percent, the same as in December 2003.  Then financial markets stabilized and sales came back, accounting for 1.5 percent in the last part of 2009.   Fleming says that “over the next three years as the S&P 500 steadily rose and eventually hit all-time highs, the million dollar sales share also rose, reaching 2 percent by mid-2913 and remaining at that level since then”.

This tie between housing prices and the stock market was clearly no coincidence.  Fleming says several studies document the wealth effects of financial and real estate markets on consumption and they typically conclude that housing-wealth affects are much larger than financial wealth-effects, primarily because more people own houses than own stocks.  “But for real estate’s 1 percent,” he says, “the stock market is the barometer of the wealthy’s consumer confidence.” This is clear in that sales share and the S&P are so tightly correlated and the S&P 500 index serves as an excellent two-month leading indicator of sales.

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East v West: 2 very different markets in 2014

Spring Housing Market Shaping Up as Tale of Two Coasts

 Zillow blog | March 18, 2014 | link

As the spring home shopping season heats up, buyers and sellers nationwide can expect very different experiences when it comes to negotiating power. Zillow took a look at recent data to determine markets where sellers have the power and those where buyers are in control. Our analysis shows many home sellers are thriving in the Bay Area, San Antonio and Los Angeles metro areas, where price cuts are sparse and homes often sell at or near their asking price.

On the other end of the spectrum, the Cleveland, Philadelphia and Tampa metros are buyers’ markets, with homes taking longer to sell, less competition in the marketplace and more room for bargaining on prices.

In this analysis, a sellers’ market is not necessarily one where home values are rising, but rather one in which homes are on the market for a shorter time, price cuts occur less frequently and homes are sold at prices very close to (or greater than) their last listing price. In buyers’ markets, homes for sale stay on the market longer, price cuts occur more frequently and homes are sold for less relative to their listing price.

“The real estate data in markets on both coasts are telling markedly different stories. Relatively strong job markets in the West are helping spur robust demand, which is being met with limited supply, causing rapid home value appreciation and giving sellers an edge. In the East, housing markets are appreciating a bit more slowly, and homes are staying on the market longer, which helps give buyers the upper hand,” said Zillow Chief Economist Dr. Stan Humphries.

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Luxury rates now on par with conventional ones…

Jumbo Loans Loom Large in Luxury Housing Market


small house and piggy bank with ...

The view of the Pacific Ocean from the San Joaquin Hills in the California community of Newport Coast is extraordinary. So, when Mohammad Taghavian started looking for a new home four years ago, he knew exactly where he wanted to be. The housing market, however, wasn’t so cooperative.

Taghavian, a 47-year-old engineer, jumped at any property that came on the market, only to find that whatever he bid, he was “edged out by a cash offer,” he says. He did what a keen home buyer would do. Taghavian kept raising his offer, from $600,000 to over a million. That placed him in jumbo mortgage territory — above $625,500 in his part of the country, and above $417,000 in lower-priced areas.

His real estate agent, Michael Salas of Coldwell Banker, honed in on one development and went on a letter-writing spree to about 60 homeowners with ocean views. When a $1.4 million townhouse finally came on the market last year, Taghavian snagged it. He moved into his dream home just before the new year.

For buyers like Taghavian who are looking at luxury properties that require jumbo mortgages, 2014 is already a banner year, industry experts say. Interest rates on jumbo mortgages used to tower over conventional mortgages because they are considered riskier. But the rates for jumbos have dropped because of economic conditions, and are now almost on par with conventional mortgages — or sometimes even lower. In addition, new federal regulations that went into effect in January don’t apply to jumbos, making them more flexible for buyers who want things like interest-only loans or who have a high net worth but complicated finances.

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