Refueling The Housing Bubble?

The Federal Reserve has been aggressively cutting rates recently and the question is being raised about parallels to the past. Back in 2001, in the aftermath of the internet stock bubble collapse and the September 11 terrorist attacks, Alan Greenspan - then the Fed chairman - made deep cuts in interest rates in order to stave off a possible economic collapse by keeping the rates too low for too long.

Now in early 2008, with the economy possibly heading into a recession - as evidenced by the GDP growth rate slowing from 4.1 percent in third quarter to 0.6 percent in the fourth quarter - the current Fed Chair, Ben Bernanke, has been following a very similar step of sharply cutting Fed funds rates in order to revive economic growth - partly by making home buying financially enticing. Though there is never a direct correction between the Fed funds rate and mortgage rates, which are outside of the Fed's control and determined by the global bond market, the current 30-year mortgage rates have come down to essentially 45-year low levels. Aside from a few months in 2003, mortgage rates have never been this low since the early 1960s. A drop in the average mortgage rate from nearly 7% in mid-2005 to the current 5.7% would reduce monthly mortgage payments from $1330 to $1160 on a $200,000 mortgage. The average savings would be $340 per month or $4,000 per year on a $400,000 mortgage.

Therefore, could the Fed be simply refueling the bubble by dangling financial incentives to buy a home?

(source: AZROnline)

Postage Increase May 12

Consistent with a new law, prices for mailing services will be adjusted annually each May. The price for a one-ounce First-Class stamp will increase from 41 to 42 cents on May 12. Prices for other mailing servies, such as Standard Mail, Periodicals, Package Services (including single-piece Parcel Post), and Special Services will also change. The Postal Service plans to provide 90 days' notice before the price changes each year. Prices for all postal products and services are available at usps.com/prices.

Buy Forever Stamps at today's rate before May 12 and save money after the new rate goes into effect. The first-class Forever Stamps will be accepted any time as the current first-class rate.

(source: Arizona REALTOR)

I Can Feel The Change

Do you hear the buzz? Can you feel the change in the air? .... I can!

I'm talking about changes in the current real estate market. It feels like it's finally starting to shift gears! My phone rings on a daily basis from buyers asking about new listed properties. Buyers are definitely out there. They realize there are so many good deals and good rates to take advantage of. If you're going to act, now's the time to do it!

Queen Creek is an example I have used many times. I've made people aware on numerous occasions that Q.C. has around 2,200 Active listings, not even including new builds. But even here, there is a rumble going on. If a home is priced tremendously well, it has a deal on the table within a few days. If this is happening in Queen Creek, it gives us hope for a better market in the coming months. Hold on. Be strong. We may be leveled by next year. In all reality, next year really isn't that far away. You and I both know how fast time passes us by.

As a seller, price your home aggressively and make it presentable, and the buyers will come. They're out there. Now is not the time to be greedy with so much inventory & competition.
For the buyers: Now is definitely the time to consider that new home! With aggressive prices and low mortgage rates, there area good deals to be made. If you're waiting until next year to purchase, please keep in mind that rates may go back up making your loan even higher than you anticipated. Not to mention you may be missing out on a super great bank owned deal today.

So the next time you ask me what I think about the future market, I'll tell you ... "Things are lookin up, babe!"

PRICE REDUCTION!

435 N Loma Vista, Mesa 85213

Price has just be reduced from $280,000 to $269,900! Check out all the details and photos at www.ShielaSuttle.com!

JUST LISTED!

8457 E Peralta Ave, Mesa 85212 - $215,000 - 1,344 sq.ft.

Immaculate home that shows like a brand new model! Be amazed at the charm and beauty of this newer single leve home. Upgraded fixtures, ceiling fans, 9' ceilings, wood blinds, custom neutral paint, neutral carpet & tile, water softener. Upgraded kitchen features staggered extended cabinets, island with breakfast bar & walk-in pantry. Split master is complete with walk-in closet, double sinks & oversized tub/shower. Extended patio in back. Even the garage is immaculate with built in storage cabinets and epoxy floors. All Appliances Included. This home can be sold with all furnishings. Everything is negotiable. HOA takes care of front yard maintenance, cable & roof repair! Please contact me directly for a personal tour.

You can check out full details and pictures at www.ShielaSuttle.com!

Arizona Average Rates for 4/16/08

April 16, 2008

30 Year Fixed - 5.68%

3/1 ARM - 5.24%

3/1 ARM Interest Only - 5.13%

1,000 homeowners sue developer Del Webb

On Monday, 375 homeowners filed a lawsuit in Maricopa County Superior Court against Del Webb Communities Inc. seeking repairs. An additional 158 plan to join the suit and 471 other homeowners are seeking arbitration.

On Monday, 375 of those owners filed lawsuit against Del Webb Communities Inc., now part of Pulte Homes, seeking repairs to their homes. The rest are either planning to file a lawsuit or are required to seek arbitration instead based on their purchase contracts. The 1,000-plus residents are seeking one of the largest construction defects actions in the state. It is estimated that each home requires between $50,000 and $100,000 in repairs. The lawsuit affects homes built between 2000 and 2006.

Before filing a lawsuit, based on state law, the complainants first issued a formal request for repairs and gave 60 days for a response. No offer was made, but Pulte Homes, which merged with Del Webb Corp. in 2001, issued a statement via e-mail on Tuesday that in part read, "If a homeowner believes their home is experiencing a problem, we work hard to support our customers and reach a resolution."Pulte also stated, "We understand that the law firm solicited residents from more than 7,000 homes." There are more than 9,600 homes in Sun City Grand.

Alleged problems provided by the law firm include:

• Stucco - Some homes do not have "weep screeds." A weep screed is part of stucco wall construction that allows rainwater to drain out of the walls and prevents mold growth.

• Acoustics - Noise levels are too high inside some Sun City Grand households, which fall within the noise impact zone of Luke Air Force Base.

• Concrete - Foundations are deteriorated due to corrosive salts and desert weathering.

• Soils - Expansion of the soils has resulted in cracking in the foundations, slabs, tile floors, walls, ceilings and drywall.

(source: Arizona Republic)