JUNE SALES UP IN KERR COUNTY
July 9th, 2009 categories: About the Local Market, Assessing the Local Market
Finally, some good news for the Kerrville real estate market! Kerr County Sales were up in June just over $1.5 million from last year.
There were 57 Sales last month (June 2009) with an average List/Sold % of 91.23% as compared with 54 Sales during the same period in 2008 (June 2008) with an average List/Sold % of 92.99%. A few more sales and at a slightly deeper discount. Hopefully, this signals a good finish for the year!
As always, we are here to help you with your real estate needs. 830-995-2511
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REAL ESTATE SALES IN KERR COUNTY: $5.7 MILLION FOR MONTH OF MAY, $33 MILLION FOR YEAR SO FAR
June 2nd, 2009 categories: About the Local Market, Assessing the Local Market
Given the recessionary climate that we have been in this last year, every one is watching and waiting for the real estate market to turn around. Will it happen this month? Will it be next?
There have been some statistics showing encouragement of late … particularly, the stock market that has been leveling out, consumer confidence is rising, and interest rates are continuing to be very low.
Most people in real estate will tell you that there has been a significant increase in traffic this last month. Real Estate sales normally begin to increase in the month of May as Summer is traditionally the high season for moving.
In Kerr County, there were 35 sales totaling $5,676,350 during the month of May as compared with 59 sales totaling $11,879,775 during the same period last year. Still significantly down; however, encouraging from the previous months.
For the year so far, here’s the data for Kerr County:
170 units sold totaling just over $33 million as compared with $273 units totaling $53.8 million. That’s 103 Units down for a total of just over $20 million! WOW! That’s quite an impact on the overall economy and particularly those in real estate.
We remain encouraged though. Things are looking up! As of June 2, There are currently 70 Listings totaling $15.7 Million in Kerr County listed as pending or active with a contingency.
People are learning to accept our new market conditions. Prices are being lowered! People are getting creative! We’re all working harder! Real Estate always comes back around!!!
With every obstacle is an opportunity for a change for the better! We’re doing our best to work smarter for our clients! And, as you can see, we are actively watching the real estate market so that we can provide YOU with the best information. Give us a call 830-995-2511 for more information and to find out how we can help you with your purchase or sale in the Hill Country. We are members of the San Antonio, Kerrville & Gillespie MLS services and so can help you anywhere in that market area!
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The Kerrville Real Estate Market Faring Much Like Wall Street
March 4th, 2009 categories: About the Local Market, Assessing the Local Market
On Monday, the Dow Jones industrial average fell to 6,763 — the lowest close for the Dow since April, 1997. The 300-point drop Monday leaves the index more than 52 percent below its record high of 14,164.53 set in October 2007.
The Texas Hill Country real estate market, while still doing better than the national market, is experiencing a similar decline as that of Wall Street. Kerrville, Texas Real Estate Sales in January & February 2009 totaled just $7.67 million, equivalent to just 46.7% of last year’s sales.
It is commonly understood that in an unstable environment, “Big Ticket Items” get hit the worste. People delay purchases … especially big ones until they feel more certain about the future. Real Estate certainly is one of the “Big Ticket Items” that is suffering in the current economic environment.
What will it take to create a more certain future? I imagine just time. In our opinion, the real estate market, like the stock market, was due a “correction.” People get caught up in the frenzy and make unwise decisions … not based on fundamentals. The good side to a correction is people start making sensible decisions about how they spend their money. And, the ones that don’t OVERREACT can seize opportunities. When the market is down, deals can be found more easily!
The good news is that, historically, real estate has been one of the best places to invest money in uncertain times. Real estate is a “real” asset … meaning it is a tangible, real asset … It can’t be taken away … It’s not just on paper!
We believe that it is time for many who have lost money in the stock market to consider investing in real estate.
The Texas Hill Country is still one of the best places in the country to invest. Tourism and retail sales are still strong.
Our encouragement to you is: Live fully and yet wisely! And keep the long term perspective!
We’d love to help you find your Hill Country dream home! Give us a call at 830-995-2511.
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REAL ESTATE SALES – ARE WE PAYING TOO CLOSE ATTENTION TO THE WAY SALES “BOB UP AND DOWN”? FREDERICKSBURG TEXAS JANUARY & FEBRUARY 2009 RESULTS
March 4th, 2009 categories: About the Local Market, Assessing the Local Market
President Barack Obama said on Tuesday that paying too close attention to how Wall Street “bobs up and down” could lead to bad long-term policy. “What I’m looking at is not the day-to-day gyrations of the stock market, but the long-term ability of the United States … to regain its footing.”
The same may be true when looking at real estate sales in Fredericksburg, Texas which were WAY down in January and February … just 33% of the previous year’s figures*. Sounds horrible? Should you run from this market?
It would seem to be a paradox … but Fredericksburg actually is thriving this year!
Pass through the town any day of the week, especially on weekends and you’ll see a city that is booming. Tourists galore!
Doesn’t quite fit with the real estate numbers? Well, go figure!
What we are hearing from the retailers in Fredericksburg is that sales are up! More people! And they’re still spending!
What’s happening is that, instead of taking trips to Europe, the Carribean, and other exotic places, people in Texas are taking small trips within the state … and Fredericksburg, still characterized by its German heritage, is a huge draw to the local tourists. Close to Austin, within driving distance of Dallas and Houston, and “smack dab in the middle of the Texas Hill Country,” people are taking weekend and extended visits to the Fredericksburg area.
Our feeling is that many of those tourists will take note of this quaint Texas town and, once optimism returns, will resume real estate purchases there.
Given that outlook, right now would be a prime opportunity to get into this market. Buyers are getting better deals than they have been in a long time! Give us a call if this interests you. We’d love to help you find your Hill Country dream home or ranch.
Our encouragement to you: Live life fully and yet wisely! And keep a long term perspective!
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*Also, keep in mind that a large portion of Fredericksburg real estate sales are large acreages and ranches. Just a few ranch sales can make up a large portion of the overall sales figures and a decrease in the number of ranch sales can make the picture look worse than it actually is.
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Fighting Inflation – USA Today article – John Waggoner – 4/10/2008
May 12th, 2008 categories: About the Local Market, Assessing the Local Market
Here is an interesting article on inflation.
Investing in real estate is listed as one way to hedge against inflation. Hill Country real estate is still one of the best markets to invest in. Call me for more information. 210-535-9463 Julie Kathryn Quest-Brooks, Broker
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Fighting Inflation – USA Today – 4/10/2008
You can’t whip inflation, but you can reduce its risk.
History is filled with thoughts that were better left unspoken. Somewhere, someone thought the Edsel, aerosol cheese and baseball’s designated-hitter rule were all good ideas.
And, back in 1974, President Ford decided it would be a good idea to fight inflation with the slogan, “Whip Inflation Now.” It didn’t work. Inflation hit 7.4% over the next 12 months.
Positive thinking is a good thing, but it probably won’t beat inflation, which is again one of the economy’s biggest worries. However we can suggest four exchange-traded funds that may not whip inflation, but at least might cut it down to size.
Forget about beating the Standard & Poor’s 500-stock index or the average stock mutual fund, or any other index. When you invest, your main enemy is inflation. You want your money to have more purchasing power in the future than it does now.
Inflation is even more important if you’re retired. If you have a fixed pension of $1,000 a month, inflation will slowly erode its buying power. The effects of inflation are cumulative. If the inflation rate is just 3% a year for a decade, your $1,000 will have the buying power of $760 — a 24% pay cut.
FIND MORE STORIES IN: Atlanta | Federal Reserve | Poor | Standard | Indian | Wachovia | Bangalore | Bureau of Labor Statistics | President Ford | Action Economics | Mark Vitner | Wipro | Edsel | Vanguard REIT ETF
Inflation hit a 4% pace for the 12 months that ended in February, according to the Bureau of Labor Statistics. The core rate, which strips out food and energy, was just 2.3%. But that’s a worthless number. We all, after all, need to eat as well as heat our homes.
Here’s what’s pushing up prices:
•Energy. A barrel of light, sweet crude oil cost $62.01 on April 11, 2007; it cost $110.11Thursday. The average price of a gallon of gasoline is $3.33 this week, up 53 cents from a year ago. Those increases carry through the entire economy. One reason food prices have soared is that a lot of fuel is used to plant, harvest, process and transport food.
•Raw materials. The price of commodities such as steel have risen sharply in the past few years, thanks to demand from the booming world economy. Those increases, too, are eventually passed on to consumers.
•The dollar. For many years, the nation was able to keep inflation low by importing low-cost goods. But when the dollar falls in value, the cost of imports rises. The euro has gained about 15% against the dollar over the past 12 months and about the same amount against the Japanese yen.
Future inflationary pressures are worrisome, too. Normally, inflation doesn’t spin out of control until wages rise along with prices, causing a wage-price spiral. So far, companies haven’t doled out big raises. And if unemployment rises as the economy slows, wage pressure won’t be a serious concern.
But the days when U.S. companies could outsource production to other countries with cheap labor could be coming to an end. For example, Wipro, an Indian software company, is opening a software design company in Atlanta. Software engineers in Bangalore, where Wipro is located, are becoming too expensive. And the Indian rupee has risen sharply against the dollar. “It’s cheaper to outsource to Atlanta than to India,” says Mark Vitner, senior economist at Wachovia.
Others fear that U.S. fiscal policy, which relies on continued deficit spending, will ultimately lead to inflation. Though the Federal Reserve is committed to fighting inflation, its current struggle to keep the credit markets afloat detracts from its aim to keep inflation in the 2% to 2.5% range. “The Fed is going to have a very tough time achieving its inflation target,” Vitner says.
We’re not talking 1970s-style mega-inflation here. Mike Englund, chief economist for Action Economics, thinks inflation will average about 3.8% this year. Still, a 3.8% inflation rate is a big break from the recent past, when prices have risen just 1% to 2% a year.
How do investors fight inflation? Several ways. Here are some suggested investments:
•IShares Comex Gold ETF (IAU). Gold is the traditional inflation hedge, because gold tends to rise in value when paper money loses its worth. IAU invests directly in gold; each share is worth one-tenth of an ounce of gold. Owning the shares is more convenient, of course, than storing gold yourself.
•PowerShares DB Commodity Index Tracking Fund(DBC). The fund tracks a diversified basket of commodities, such as wheat (11.25%), crude oil (35%) and aluminum (12.5%).
•REITs. Real estate investment trusts, which invest in commercial real estate, have held up well this year. While REITs could be vulnerable if the economy slows, they offer solid yields — now about 5% — and real estate is generally a good hedge against inflation.
One REIT to consider: Realty Income (O), which yields 6.4% and has expanded its dividend at a 5.6% annual rate over the past five years. If you want a more diversified REIT portfolio, consider the Vanguard REIT ETF (VNQ), which has rock-bottom expenses.
Natural-resources funds are another traditional inflation hedge, and you can find some suggestions in the chart. Don’t put more than 5% to 10% of your portfolio into a combination of these funds for inflation insurance. Doing so would be too risky.
John Waggoner is a personal finance columnist for USA TODAY. His Investing column appears Fridays. Click here for an index of Investing columns. His e-mail is [email protected].
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Inflation, Interest Rates & the Fed
April 30th, 2008 categories: About the Local Market, Assessing the Local Market
Here’s an interesting article on the influence of the Fed’s move on Mortgage Rates.
U.S.News & World Report
What Fed Moves Mean for Mortgage Rates
Wednesday April 30, 3:02 pm ET
By Luke Mullins
Faced with a weak dollar and rising inflation, the Federal Reserve seems done with its aggressive rate-cutting campaign. Here’s how this shift in monetary policy may affect mortgage rates this year:
How have fixed mortgage rates been moving recently? They’ve climbed. The average 30-year, fixed-rate conforming mortgage increased from 5.91 percent for the week ending March 21 to 6.11 percent for the week ending April 25, according to HSH Associates, but it’s still on the low side by historic standards.
How will the rates change over the next several months? With several factors pushing interest rates higher–and not much pulling them lower–fixed mortgage rates are likely to increase modestly in the coming months. “They are right around 6 percent now, [and] they are probably going to stay there the first half of this year,” says Gus Faucher, the director of macroeconomics at Moody’s Economy.com. “Then they are going to gradually move higher in the second half of this year.”
Is that because of what the Fed is doing? No. This upward trend has little to do with monetary policy. The federal funds target rate–the Fed-controlled interest rate that banks charge one another for overnight loans–plays only an indirect role in setting mortgage rates. Instead, the rates are being driven higher by recent developments affecting the yield on 10-year treasury notes, which influences mortgage rates more directly.
What’s happening with the 10-year treasury yield? It has been on an upswing. With fear reaching teeth-chattering levels in the days after the Bear Stearns investment bank came close to collapse in mid-March, the yield on the 10-year treasury–where investors head for safety during times of turmoil–fell to near-historic lows. But after the Fed cut interest rates and created innovative new ways to get cash to banks, the market staged a turnaround. Yields climbed nearly 17 percent, to 3.87 percent, from March 17 to April 25.
So, what’s driving the yield higher? There are two key reasons behind this about-face:
–Risk looks better. Some market participants think they see an end to the credit crisis. “The worst is behind us,” Lehman Brothers CEO Richard Fuld recently told shareholders, according to Bloomberg. With credit markets on the mend, those safe but low-yielding treasuries suddenly don’t look so appealing. Investors are “pulling money out of the safest places in order to put them back to work in perhaps somewhat more risky assets,” says Keith Gumbinger, vice president of HSH Associates. Less demand for treasuries means lower prices and higher yields.
–Angst about inflation. Rising concerns over inflation are also pushing 10-year treasury yields higher. For example, in early April, the government reported that the cost of imported goods jumped nearly 15 percent in March from the same month last year. “The data only goes back to 1983, [but] we’ve never see inflation this high,” says T. J. Marta, a fixed-income strategist at RBC Capital Markets. With inflation worries increasing, bond investors are demanding a higher return on their money at risk. “You see the yields start to rise fairly sharply because now people are focused on inflation,” Marta says.
Is there anything that might help moderate this increase? There is. Not all of this increase will be passed on to consumers in the form of higher mortgage rates. Typically, rates on a 30-year fixed mortgage are about 1½ percentage points higher than the yield on the 10-year treasury. But after the housing crisis hammered their portfolios, lenders and investors have grown wary of mortgages and are demanding higher returns. As a result, the difference between the 30-year fixed-rate mortgage and the 10-year treasury yield–known as the risk premium–has ballooned about 50 percent, to 2.32 percentage points, over the past year, according to HSH Associates.
But with lenders having tightened underwriting standards–making mortgages safer investments?–these risk premiums could narrow, Gumbinger says. “If underlying interest rates do rise, my suspicion is that there won’t necessarily be a corresponding increase in mortgage rates,” he says. “They will probably be influenced to some degree, but there is an awful lot of spread which could be compressed.” So while higher 10-year treasury yields will put upward pressure on fixed mortgage rates, some of that increase will be absorbed by narrowing risk premiums–helping moderate the rise.
What’s the outlook for adjustable-rate mortgages? Adjustable mortgage rates will face similar upward pressure from rising treasury yields. The conforming 5/1 adjustable-rate mortgage–which offers a fixed interest rate for the first five years and then adjusts annually for the remaining 25–stood at an average of 5.89 percent for the week ending April 25, down from 6.08 percent a year earlier, according to HSH Associates. “By the end of the year, we might be working toward around 6.25 percent,” says Mike Larson, a real estate analyst at Weiss Research.
Has the Fed’s rate-cutting campaign helped struggling adjustable-rate-mortgage holders who may be facing foreclosure? Yes, but you might not see it. Although adjustable-rate mortgages are more closely linked to the federal funds rate than fixed-rate home loans are, they have fallen only about half a percentage point since September, despite the Fed’s aggressive series of rate cuts. That’s because exotic mortgage products have played a key role in the foreclosure crisis, making them radioactive to investors. When investors aren’t eager to buy these loans, rates must increase to attract buyers. As a result, adjustable-rate mortgage holders have not seen their monthly payments decrease a great deal.
But that doesn’t mean the Fed’s actions have not helped borrowers who have ARMs, says Faucher of Moody’s Economy.com. “The truth is that if [the Fed] hadn’t cut [the federal funds rate], adjustable rates would be even higher…and the problems would be much more severe,” Faucher says. “So you can’t just say, ‘Well, the Fed hasn’t done anything.’”
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