From the White House to Your House

More votes were cast during the past season of American Idol than in the last presidential election.  Yet the decision about who occupies the White House for the next four years will affect your financial picture more significantly than the determination of which new celebrity possesses superior stage presence and iron-clad lungs, although those are probably qualities useful to the Presidency as well. The dust has yet to settle following the election, but industry experts are busily speculating how Obama’s reelection will affect the real estate market. Economic policies were the crux of many of the candidates’ debates, and Obama faces some significant challenges in bolstering the housing market. Although the President has not yet proposed a comprehensive plan for housing recovery and private mortgage lending, there are hints about the direction the White House may take, and whether you already own property or are in the market for a home, many of these policies may affect you directly.

As Obama takes the stage for act two, how does he intend to help the housing market? The current administration has emphasized the importance of expanding financing options for responsible homeowners and for helping families stay in their homes by preventing foreclosure. Obama intends to continue to develop opportunities in this area, supporting proposed legislation to ease the refinancing process and providing more options for loan modifications. The President has acknowledged the modest resurgence of the housing market, but grants that there is a long road ahead: “We’ve got historically low interest rates now, and the housing market is beginning to tick back up but it’s still not at all where it needs to be…We’re going to be pushing Congress to see if they can pass a refinancing bill.”

Another impending program is to commence government sales of some of the more than two hundred thousand foreclosed-upon homes owned by Freddie Mac, Fannie Mae and the FHA to convert these properties into rental housing. This proposal, one that was vocally supported by both presidential candidates, aims to raise home prices through converting vacant properties into healthy rentals, thus diminishing the number of foreclosures by raising home values. Restructuring of the giant government housing agencies, deemed unilaterally necessary by both candidates, will greatly influence the market and the price of real estate, both for lower priced housing that competes with affordable rental housing and the higher priced property sales that have lagged, partly because of lower limits for the size of mortgages that can be purchased and resold by such agencies. Movement in both of these categories is likely as the government takes steps to reorganize and regulate the mortgage industry.

Whether you responded to your favorite Presidential contestant’s election results with champagne or tears, indicators are positive that simply due to the increased stability provided by having elected our next leader, there will be an increase in market activity, at least in the short term. Many companies and investors, both domestic and international, typically delay decisions and postpone their economic involvement until after Presidential elections. Now that our leadership is settled for the next few years, companies can move forward with investments and curtail the wait-and-see attitude that tends to prevail pre-election.

Unlike reality shows, where audience applause is generally a reliable indicator of results, in this case, it is exceedingly difficult to predict what might happen to the housing market or to the nation’s economy as a whole over the next few years. However, at present, trends in housing appear positive, with low mortgage rates and the added stimulus of a newly settled (if not unified) nation. So if the news on the market has you in the market, contact me today at (925) 846-3755 and I will give you my insights about how to put this knowledge to work for you.

QE3: Alphabet Soup or Powerful Economic Stimulus?

QE3 is a term that has figured prominently in financial news recently. This acronym doesn’t refer to an enormous ultra-luxury cruise ship, or to a new miraculous anti-aging enzyme, but instead to the latest round of an economic stimulus measure known as ‘quantitative easing’ which was put into action by the Federal Reserve on September 13, 2012.

What is QE3 and How Does it Work?          

Under QE3, the Feds purchase $40 billion worth of mortgage-backed securities monthly, causing demand for them to rise. Using your Economics 101 knowledge, you will correctly deduce that this causes their prices to rise and their yield to drop, driving down mortgage rates. This has the anticipated effect of inducing more spending, stimulating the housing market, and subsequently creating more jobs. Fed Chairman Ben Bernanke has indicated that this current bond purchasing program is open-ended and will continue until it results in a significant improvement in the labor market, which we assume means more than a few new counter jobs at McDonalds’.

Translation, Please?

So, what does this mean to the average American making informed decisions about home finances? The effects of quantitative easing are intended specifically to create momentum in the housing market. Mortgage rates, already temptingly low, sank to new record lows after the announcement of this new round of quantitative easing. If you currently own a home, now is a stellar time to evaluate refinancing options, especially if you are experiencing any challenges making your payments. If you’re considering buying a home or ‘trading up’, realize that even a small downward adjustment in interest rates can save you around $10,000 on the full term of a home loan, even if the difference in monthly payments appears insignificant at first glance. A loan that closely tracks the rate of inflation may even be a possibility if you have good credit and can make a sizable down payment.

Today’s Blue Plate Special: The Housing Market?

Experts disagree about the ultimate effects of quantitative easing on housing prices. Many qualified homeowners have already taken advantage of low rates, and the housing market experienced modest gains even before the confirmation of QE3. But keeping rates low can’t hurt, and makes this an especially attractive market for real estate investors and other qualified buyers. While mortgage rates are expected to remain relatively low in the wake of Bernanke’s assertion that he will continuously purchase bonds for as long as necessary to generate economic improvement, housing prices may be less predictable. If you’re interested in exploring the possibilities of the current market, please give me a call so that I can help guide you in appropriate decisions regarding the timing and pricing of your home purchase or sale. I will be happy to explain further these and other factors which are currently impacting the Pleasanton real estate market.

Five Little-Known Benefits to Being a Pleasanton Resident

Pleasanton, California is a fairytale community, with the rooftops of generous and private East Bay homes substituting for the turrets of Snow White's castle. Within the radius of major San Francisco Bay Area cities, near public transit and freeways, Pleasanton offers quiet charm and beauty that will conjure the privacy of a living on a country estate. This community can satisfy a craving for the rich cultural resources of the city as well as an appreciation of bucolic scenery with rolling hills and open sky. Beyond Pleasanton's obvious appeal, however, lie some lesser-known reasons to make Pleasanton your hometown. Read on to discover some of them.

You Won't Need a Time Machine
Pleasanton is the rare richly historical California community which has flourished over the course of time, maintaining its historic appeal while integrating modern conveniences galore. Stroll along its quaint downtown streets, marveling at the architectural variety and sipping coffee in a European-style sidewalk cafe, or instead visit the gleaming storefronts of Stoneridge Mall, one of the Bay Area's beacons of upscale shopping. Whether your passion is revisiting a gentler bygone age or propelling yourself into the future, surrounded by the technology that fuels this area's healthy job market, you'll find your way there in Pleasanton.

You Won't Miss Napa
Although Pleasanton is only an hour's drive from California's most famed wine country, you may never make the trip. The Livermore AVA produces over thirty varieties of tasty grapes, and they're not growing them to turn into PB&J. The very first California wine to bring a crusty French wine to its knees in competition hailed from this region. Yes, this was in the late 1800's, but talent is talent, and viticulture remains a strong part of this community. From wine festivals celebrating the harvest to a plethora of beautiful wineries with inexpensive daily tasting hours, enjoying wine is part of celebrating life in Pleasanton.

You Won't Go Hungry
Got an appetite? Good. Pleasanton's diverse restaurants and cafes will leave you with no shortage of tempting options. From specialty gourmet shops (not every town has its own gluten free bakery) to upscale dining to family friendly chains like the Cheesecake Factory, this town has it all. If eating in is on today's menu, Trader Joes, 99 Ranch, and other specialty markets abound. The only challenge will be deciding what's for dinner.

Your Kids May Invent the Next Google
It is certainly no accident that Pleasanton hosts a growing number of successful and innovative tech companies. Children who grow up in Pleasanton benefit from excellent schools, with the two comprehensive high schools, Foothill and Amador, ranked among the top in the nation. The elementary and middle schools are no slouches either; the district has consistently high parent satisfaction ratings and routinely receives both local and national recognition. Give your children the strong foundation they need, and perhaps stock options in their growing startup will sustain you through a swanky retirement.

You Won't Have to Take up Thumb Wrestling as a Hobby
While a Pleasanton backyard is a tempting place to put up your feet, pour yourself a drink, and unwind, you may find that Pleasanton's many events and activities keep you on the move even through your leisure time. With so many recreational opportunities around every corner, it's easy to keep active and involved. The public parks are known for their natural beauty and the local recreational soccer leagues are legendary. Summers are chock full of festivals, from the street fairs featured on First Wednesdays to the blanket-filled lawns of free Friday Concerts in the Park. And don't forget the midways, horse racing, and musical headliners which make Pleasanton's Alameda County Fair a favorite attraction.

Jim Lavey Realtor Pleasanton

There are many qualities and skills that go into being an excellent real estate professional - integrity, in-depth community and market knowledge, marketing savvy, effective negotiation skills and a high-quality professional network, all of which are hallmarks of how I work.

So when you decide that you'd like to buy or sell a home in the Pleasanton areas, please contact me.

 

Jim Lavey

jimlavey@aol.com

925.846.3755

www.JimLaveyMarketUpdate.com