August Surprise Impacts September Mortgage Rates!

Just when mortgage rates had ticked down a bit and it appeared they would remain in the low 6% range the Labor Department played a trick on the mortgage market. Last week the Labor Department released the September jobs report showing an increase of about 110,000 jobs for the month. No surprise there. The surprise came in the next paragraph when the LD announced a revision of the August jobless numbers. A huge revision.

In August the LD reported a loss of about 4,000 jobs (the first negative trending in years) and a trend that caught the attention of the mortgage market and led to lowering of 15 and 30 years mortgage rates. The revised August numbers reflected a 93,000 job swing since the real number was 89,000 new jobs created in August. This large number took the financial markets by surprise and immediately long term interest rates jumped.

30 year fixed rate mortgages rose to a national average of 6.5% versus 6.2% four weeks ago. National averages for this week's rates are as follows:

30-year fixed - 6.5%

15-year fixed - 6.18%

5 year ARM - 6.37%

If you need information about current rates in the local market feel free to give me a call.

ARE THEY CRAZY OR JUST UNEDUACTED?

Several days ago I was driving through Georgia when I stopped to run in Savannah. I found a nice subdivision on the run and as I ran around the lake I had a chance to read many of the real estate for sale signs. Most of them had a sign rider stating: PRICE REDUCTION. No great surprise in the current real estate market. You could say it is a sign of the times in real estate.

The sign that grabbed my curiousity and would not let go for the balance of the sultry run (humidity had to be 100%) was the FOR SALE BY OWNER. Not the FSBO sign itself; that would be unremarkable. The note scribbled on the bottom of the sign pleading for a buyer and prohibiting realtors-that grabbed my imagination and held on tight. The hand-written note on the bright red FSBO sign stated, "MUST SELL IMMEDIATELY, ABSOLUTELY NO REALTORS!"

My first thought:

OXYMORON

defined by Wikipedia as - An oxymoron (plural oxymorons or more rarely oxymora) is a figure of speech that combines two normally contradictory terms.

That sounded about right to me but (in full disclosure) I'm a licensed Realtor in Pennsylvania. So as I continued to pound the pavement and have the blanket of humidity squeeze my lungs, I wondered what may cause a rational person (probably a professional) to be desperate to sell a house but prohibit Realtors from assisting him? That would be akin to needing a root canal but refusing the services of all dentists. Heart surgery but declining the help of all physicians, etc., etc, you get the point.

The story gets better. It bothered me so much I drove back to the house after my run and caught the owner at home. He saw my PA plates and Penn State Nittany Lion Club sticker and thought it was safe to talk to me. Long story short. He is facing foreclosure but had a bad experience with a Realtor once so he thinks we are all evil. He is going to show us (Realtors). He would rather lose his house to foreclosure than seek out the assistance of a professional Realtor that may just bring him the buyer he so desperately needs.

So, I continue to ponder the original question, "ARE THEY CRAZY OR JUST UNEDUCATED?" I have my own biased opinion of course but I've never filled one of my own cavities.

What do you think?

FSBO OR NOT?

So I spent the Thanksgiving holiday in Bergen County, New Jersey and since I'm an addicted runner I logged about six hours running the neighborhoods of Leonia and Glen Ridge, New Jersey. In all of those miles I didn't see a single For Sale By Owner sign in either town. I did see many houses for sale all represented by licensed real estate brokers. So, the more I ran the more time I had to consider the FSBO paradox.

In the State College/Centre County market one couldn't run down two streets in one neighborhood without seeing a handful of FSBO signs in front yards. As I put one foot in front of the other my mind drifted off into that place where runners minds go when the breathing gets hard and the miles pile up and I pondered the possible differences that lead one market to have many FSBO's and another market to have almost none. What are the differences? Are they cultural? Maybe. The neighborhoods reflect a much greater diversity in New Jersey than in Central PA. Are they financial? Maybe. The average list price for the NJ homes is over $600,000 and the average list price in Centre County is a bit over $200,000. Is it a safety issue? Certainly I would think that the safety issue would play a larger role in New Jersey than in Central PA. Is it convenience? Perhaps sellers in New Jersey value their time more than those in PA. and don't want to be bothered with all of the inconveniences associated with selling their own property.

So the question is; what do the affluent people of New Jersey know about professional real estate representation that the people of Centre County don't know, or do the people of Centre County reflect the pioneer spirit of forge ahead, self-reliance and oh, by the way, look at all of the money we put in our pocket by doing it ourselves? Or do they save huge money? That is a topic for another day.

So, as my mind wanders back to the task at hand I'm running up a tough hill of a historic tree-lined street in Leonia but I really haven't solved the FSBO paradox. Maybe you can help solve it or perhaps it is unsolvable.