The Mortgage Rates Have Moved To A Barrier Of 4% In This Week

The Mortgage Rates Have Moved To A Barrier Of 4% In This Week

The average rates for the loans have risen to 0.07 to 3.98%. The average rates have been fixed for 30 years.  It rose by 0.63 percent since 2nd of May. The rates have never been so high to this extent since 12th April, 2012. “Fixed mortgage rates crept up further this week following a solid employment report for May,” as told by Frank Nothaft, the chief economist of Freddie Mac’s. The employment picture has been improvised in recent times. The scope of buying more homes will increase.


However, this will pressurize the rates to rise further. It has been signaled by the Federal Reserve that it might lead to a cut back upon buying a security that has been backed by mortgage. This has also been interpreted as a problem of rising rates. It is also expected that the lenders will be charging high rates in order to make the security attractive for the rest of the buyers. The cost of ownership of houses will also be increasing with the increase of the rates. This will have a little impact in the market of housing. This interpretation has been made by Gumbinger who is the wise President of a company providing the services of mortgage information. The name of this company is

In addition to this Gumbinger said, “Although the size of the increase was [small], it is still unwelcome as the housing market tries to gain momentum.” This increase is expected to boost up the mortgage payments that are made on a monthly basis. The payments will increase in an approximate figure of $33 for $100,000 that will be borrowed each time. As said by Gumbinger, it is supposed to have a negative impact on some of the homeowners. This will discourage them from refinancing the loan that had been borrowed by them. This will happen only if they have competitive rates for it. The rising rates will be alarming for home buyers. It will be above 10% after 12 months that will end in 31st.

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Major re-imagination at a key bank branch of Wells Fargo

Major re-imagination at a key bank branch of Wells Fargo

Customers walking into the newest branch of Wells Fargo next week would not be greeted by the usual teller windows. There won’t be any safe-deposit boxes either. Bankers assigned in offices would be a thing of the past as well.

Instead, the bank employees would be noticed working with handy computer tablets, and the branch would have folding walls so that customers can have access to the ATM machines in night.

Welcome to an incredible shrinkage of office space and mode of operations. “We still consider the offline branch as the centerpiece of our customer engagement, but the store structure and operations have been assigned a newer flow.,” stated Jonathan Veline, the strategy supervisor of 6,200 retail ‘stores’ in Wells Fargo.

As a part of the re-imagination, the bank is all set to commence operations in the Washington ‘minibranch’ from this Monday. This is the first effort on part of the bank to reduce its floor space to about half than the traditional, without compromising on serving the requirements of customers.

The reduction of floor space is the latest effort on part of the bank to significantly reduce its expenditure on system infrastructure. Banks are trying hard to adjust with slow economic growth and new profit crunching rules at the market. As more and more customers incline towards internet and mobile banking, banks are being compelled to close stores altogether or building smaller space saving solutions to cut down on personnel and property costs.

“Struggling with the profit challenges, banks are pulling this lever to cope with the situation,” explained David George, a St. Louis based financial analyst working with R.W. Baird & Co.

Traditional bank branches are in the range of about 4,000 square feet, and the average cost of setting up a fully functional branch is about $3 million. Older branches may occupy as much as 10,000 square feet.

These ‘minibranches’ would take about 2000 square feet drastically lowering the operational costs by about 40-50%.

Wells Fargo, which reported a net profit of $18.9 billion last year on revenue of $ 86.1 billion, is not the only bank in the block trying maximum squeezing of operational costs. Bank of America has been closing branches in hundreds. They are installing ATM machines from where the customer can remotely work with the bank via video chat. Banks who are opening new branches, like J.P. Morgan Chase, (opening about 150 branches every year) are focusing on space saving work spaces and practices.

“The average size of the branches scheduled to go operational by 2014 is significantly less than the size we were building two years ago,” according to Ryan McInerney, head at consumer banking section in J. P Morgan. He recently confirmed that about 70% of the new branches are less than 4000 square feet.

The Bank of the West, which is a unit of BNP Paribas SA of France, operates in the 19 Mid western and Western states through 700 branches. They recently inaugurated five branches that were significantly smaller in size. These branches have a central teller pod receiving and dispensing cash and glass enclosures without doors.

“A day spent at a big branch does not make sense anymore from the customer’s perspective or the bank’s,” stated Andy Harmening, the head of the regional banking group of the Bank of the West.

On a Friday morning recently, workmen were seen putting the final touches on the new 1,250 square foot Wells Fargo branch in Washington. The employees were sitting in a huddle at a corner, receiving training on how to use the computer tablets that would be the medium of operations from now on.

However, the new style would not replace all the 6,200 branches of the bank. Instead, it would complement the traditional style and would be mostly found in urban regions. “We could not set up units in certain neighborhoods because of the too much space we were requiring.”

With headquarters in San Francisco and being the fourth largest US bank by asset size, Wells has been developing this new format for the last few months. A prototype has been constructed in the basement of a Manhattan branch.

Under this new layout, customers would be approached and guided by bank employees to one of three flat ATM screens (19 inch) when they enter the lobby. Through this ATM, the customer can self-serve all transactions of have assistance from a bank employee carrying a tablet, a portable keyboard and a cell phone.

Both the customer and the employee can use the ATM machines. These new machines also dispense single dollar and $5 bills besides the usual $20s and $50s.  The ATMs would also double as bank vaults.

Behind every ATM there would be a banquette and a desk area. This small area would have movable walls. When the bank closes in night, the walls move into place to lock that space behind the ATM, letting customers access only to the ATMs.

A sliding glass door would separate a small rear office in the lobby. This door closes at night too.

Bank executives also say that they risk losing some customers who prefer the traditional style.

“Customers walk into the bank to deal with actual peoples and not iPads,” said the analyst from R.W Baird.

Banks have previously tried new designs, often ending up disastrously.

Washington Mutual patented a particular format called the ‘Occasio’ in 2004. This format replaced teller windows with cash dispensers and free-standing counters. The bank was able to remodel only half of its about 2,200 branches before collapsing in September 2008 due to bad debt.

J.P Morgan purchased the remnants, but was quick to remodel back to the traditional style as customers found ‘Occasio’ very misleading.

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Median sale price data from Metro Phoenix show 60% up from lowest

 Median sale price data from Metro Phoenix show 60% up from lowest

The latest median sale price data from Metro Phoenix area touched a record high of 60% when it scored $181, 399. The hike was calculated against its lowest score, which was on August 2011.

Despite the rise in housing price reminded many of crash of the real estate bubble, analysts are optimistic. Mike Orr, a director at the W. P. Carey School of Business of the Arizona State University, assured that the area won’t see a housing bubble develop anytime soon.

‘We successfully predicted this rise for the main seasonal buying every year, which remains strong until June,” confirmed Orr, director of the Center for real Estate and Practice.

He explained the rise in price as a consequence of lesser house availability. The number of listed houses fell by a sharp 7.3% in April.

In purview of the rapidly escalating home prices every where, some market watchers fear an over-supply bubble when investors who bought foreclosed and short sold homes enter the market after maintaining the home as a rental for some time.

Rubbishing the claims of bubble, he said, “Some commentators ominously promote the idea of a bubble because of their fixation and fear about the events from 2004-2006. Even the idea of an over-supply bubble is exaggerated.” Orr seemed confident.

According to him, even if all the foreclosed and short sold homes enter the market, it would only rise by 10-11,000 more, and that would not mitigate the undersupplied nature of the market in the Valley.

The recent steep hike in mortgage interest rates is also emerging as a context of serious concern for some commentators and prospective home buyers.

Orr explained this as sometimes a steep hike in rate may cause urgency in home buyers before they want to lock the mortgage before it gets any higher. This therefore creates a hike in demand instead of decreasing it.

He forecasts continued escalation of the sale price in the Metro phoenix region, albeit at a softer pace.

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Focus of two key REITs from the Valley shifts from buying to selling

Focus of two key REITs from the Valley shifts from buying to selling

Two of the biggest real estate investors from the Metro Phoenix are keener on letting go than buying property.

American Residential Properties of Scottsdale got $287.7 million from an initial public offering organized last month. The property investment trust sold 13.7 million stock units priced at $21.

Another Scottsdale based investor, the Colony American Homes was planning on raising $260 million through an IPO set for Wednesday but they postponed it in purview of the falling REIT rates. The share prices of REIT have seen a downfall of more than 10% from mid- May.

A final word from Colony Capital about the rescheduling of the IPO is yet to come. This Santa Monica, Calif. Company was planning to sell 20 million shares on Wednesday.

Both colony American and American Residential have thousands of rented houses in the Metro Phoenix area. These companies purchased many foreclosed and short sold homes to raise their inventory, but these deals are becoming rarer.

The companies plan to retain the houses in Metro Phoenix for a few years at least. However, buying has been slow lately because of the rise in home prices.

Some observers think the involvement of big institutional buyers in Metro Phoenix area shows a concerning trend. Besides Colony American, and American Residential, New York based company Blackstone have been actively involved in Metro Phoenix market for the last few years.

Tom Ruff, property analyst of Information Market explained that the combined inventory of the biggest home investors  consists of about 10,000 houses in  the Valley. Compared to the 1.5 million homes in the  area, this number is even less than 1 percent.

Ruff dug up some important facts from research: the median price of homes purchased by big investors in 2012  was $106,500 in 2012, and this year it has already touched the $121,000 mark. Some of the typical features of the houses purchased by these investors include an area of 1,626 square feet, two bathrooms, four bedrooms, was from a 2004 construction, and are currently in need of some renovation work.

Addition to Cushman and Wakefield

A reputed party of office brokers recently switched their brokerages. Patrick Devine, Jerry Noble, Ashley Bourget, and Greg Mayer joined the Cushman and Wakefield’s Phoenix office from CBRE.

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Acute inventory shortage drives up sales of existing homes.

Acute inventory shortage drives up sales of existing homes.

The sales of existing homes reached its highest peak from November 2009 in May. The National Association of Realtors note that the sale was fueling because of a federal tax stimulus.

Data from NAR show that the annual sales rate data (adjusted seasonally) in May this year (5.18 million homes) is 12.9 percent higher than May 2012 (4.59 million homes) and 4.2 percent  higher than that of April (4.97 million homes).

“The huge number of units sold is overwhelmingly reassuring. However, it is unlikely to notice any growth in home availability despite the promising gain in May, unless there is an escalation in construction of new homes. At least 50 percent more construction is needed, “ said Lawrence Yun, Chief Economist, NAR. The rise in home prices is very fast, and unless there is additional supply through building new homes price growth is likely to come down to a moderate level.

Meanwhile, the inventory of listed existing homes rose by 3.3 percent to reach 2.2 million in May. NAR points out that at the current home sales rate represents a 5.1 month home supply at the current sales rate. This is lesser than 5.2 months April.

When the supply was a 6.5 month, the inventory a year ago was 10.1 less.

This shortage in inventory is leading to bidding battles, and some markets are registering home sales like hotcakes.

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A window into buyers’ minds

A window into buyers’ minds

Are buyers really keen on making big buys before the mortgage rate shoots up uncontrollably?

Or, are they refraining from buying because of the steeply rising prices and scarcity in inventories in many markets?

Discuss the topic with today’s buyers for first hand interaction about their priorities at the Real Estate Connect San Francisco.

Come up with questions, challenge set assumptions, and enter through this limited direct window into buyer minds during a panel discussion on July 10, Wednesday. The topic is, ‘Hear it Direct from buyers of today: live panel for consumers.’

The participants at the discussion include Sue Adler, partner and co-founder at Hear-it-Direct; Michael Williamson, partner and executive vice-president of the John Aaroe group; Joelle Senter, market development and customer operations vice president at dotloop; Dawn Thoma, intero real estate services broker associate, Coldwell Banker from Premiere Reality in Las Vegas and the owner of the DiRaffaele group, Joe Diraffaele.

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The Right Agent – The Right Home

The Right Agent – The Right Home

Buying a home, especially for the first time, can be one of the most exciting times in one’s life!  However before you run down to your corner real estate office, know that working with the right agent is crucial to your finding the home that is right for you.

An agent who has experience in the area in which you are looking is key.  Although Uncle Bob may have his license, he might not be able to answer all of the questions you have about the surrounding neighborhood.  Information about local schools, taxes, crime rates, or proximity to services are just a few.  A good local agent will be aware of any current discussions and plans concerning development and projects in the surrounding area.  His/her possession of this knowledge can be very time saving.

Look for an agent with whom you are comfortable discussing your wants and needs.  He/she should be easy to get a hold of and respond to emails, phone calls, etc. in a timely manner.  Time is actually a very important factor when choosing an agent.  You want to make sure that they have enough time for you.  “If that person has ten or more active escrows, they might not be the right one for you.” – Matthew (over 25 years experience as a real estate broker/appraiser)  Make sure to ask the agent how many current buyers they are representing.  You’ll need someone who has time to serve your needs, and not just be concerned with how fast and how many deals they can close or how much commission they can make.

Another helpful characteristic is an agent who is tech-friendly.  Using a mobile phone and/or tablet, he/she can research a home’s facts online very easily.  This information will be in real-time and provide you access to the fastest service possible.  Researching in addition to using your agent, is made simple by searching several sites that offer online listings for free.  Some of these are Redfin, Zillow, and Trulia.  A few of these work with agents who are willing to give back their fee if you work directly with them, however in this type of situation, you may just get what you pay for!  An agent who works for his/her full fee may just work harder and pay closer attention to their client.

All in all, by doing a small amount of research before choosing your agent, you will save yourself both time and hassle and better yet truly find the house of your dreams.

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How you and your home can survive an “Act of Nature”

How you and your home can survive an “Act of Nature”

Every day the evening news tries to score Nielsen points by making their rookie reporters stand in the middle of umbrella-crushing downpours, or travel to the smoky edge of an out of control foothill fire, to remind us of the raw power of Mother Nature.

But’s if one of those rookie reporters shows up in your neighborhood after an emergency, let’s show him Bear Grylls has nothing on us, and that we understand how to protect our home, our castle, our precious investment!

HERE ARE THE BIG 3 . . . Water, Gas, and Electricity


This is often the first thing that comes to mind when thinking about our human needs when planning for a disaster, but knowing how to turn-off your water can be equally important to you and your house.

Most water meters are equipped with a customer valve right at the water meter. Locating, tagging, and demonstrating and know how to operate the water shut-off valve are the keys to keeping your house dry and protecting your water supply from pollutants or sewer line breakages.  It is wise to shut off your water until you hear from authorities that it is safe for drinking.


Natural gas leaks and explosions are responsible for a significant number of fires following disasters. Locate, tag, and show all responsible household members how to operate the gas shut-off valve.


CAUTION –If you turn off the gas for any reason, a qualified professional must turn it back on. NEVER attempt to turn the gas back on yourself.


Learn how to use your home’s fuse and breaker boxes, and invest in surge protectors to protect your electronics if power goes out.  Be sure they’re properly rated for your electronics. Always shut off all the individual circuits before shutting off the main circuit breaker.

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5 Easy & Inexpensive Ways to Add Curb Appeal

5 Easy & Inexpensive Ways to Add Curb Appeal


It’s amazing what a little paint can do!  Your house will look immediately newer and more pristine.  Don’t forget trim and fences.  Choosing a neutral color will be more appealing to a larger number of people than say a brighter color that is more a matter of personal taste.

Window Treatments

Windows are what invite a perspective buyer to come and take a look inside.  Decorative shutters and even planters will transform a plain window into a point of interest.  Make sure screens are clean and in good repair.  And don’t forget that interior treatments can also be viewed from the outside.

Lighting and Fixtures

Replacing out-dated lighting and fixtures is another way to make your house appear to be newer.  Be sure that fixtures such as the door handle and even address numbers match closely in color and style with porch and other exterior lights.  For instance brushed chrome or wrought iron, according to Bob Jones of Jones Lighting in Towson, are a good bet.  Don’t be afraid to add lighting, such as solar-powered walkway lights.  These will invite people right to your front door!


Planting brand new flowers and even a tree or two is another inexpensive way to brighten and call attention to your house.  Choose flowers and plants of varied heights that will grow well in either shaded or sunlit spots. This information is readily available through gardening books, nurseries, or even websites such as (Better Homes and Garden)

Clean Up the Yard

Making sure grass is trimmed and leaves are raked shows your own pride that you take in owning this home.  Tools, equipment, and even trash cans should be put away and out of sight.  Lastly, don’t forget to sweep walkways, porch, and even the driveway.  This attention to detail will have buyers looking forward to see what awaits inside!

“You never get a second chance to make a good first impression.”  – Will Rogers

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LT: I wish to find a buyer for my Poway Home

LT: I wish to find a buyer for my Poway Home

Despite saying goodbye to the Chargers in 2010, LaDainian Tomlinson still has his multimillion dollars Poway home up at the market, as he stated on a talk show at a local sports channel this week.

‘I liked the nice stay, and now I wish to find a buyer,’ said LT when he called in to the Scott and B.R Show on Mighty 1090. He was speaking from his current Westlake, Texas home. Westlake is an area in the Dallas-Fort Worth region.

The Poway home first hit the market with an asking price of $ 5.2 million, in fall 2011. MLS statistics show that it was relisted at $ 3.75 million, in April.

Tomlinson purchased the property in 2004 at $ 3.5 million, according to the public records.

The home, standing on two parcels has 5 bedrooms, 5-1/2 bedrooms and a host of upgrades.

The market listing states, ‘Seller made no compromise in developing this special private atmosphere best for family living and entertainment.’ The listing also places importance on how the home features are, ‘all bells and whistles.’

The extras include a gourmet kitchen, a wet bar, sauna, private pool and spa, outdoor barbecue, and a game room. An otherwise unimproved second lot houses full sized tennis court/basketball court. The buyer can develop this or left as it is.

The Poway home came into discussion when Scott Kaplan, the host of the radio show, asked at how much one can get a home in Westlake, Texas, LT’s current residence. The ex Charger confirmed that his present home is “very comparable” with his Poway property. Then he revealed that the home is still unsold.

Tomlinson, a pro bowler for five times, is still optimistic about selling his home. He hinted that a key Dodger player is interested in it, but he did not give any names.

“I hope it happens,” said he.

Nearing the end of this discussion, the other host at the show, Billy Ray “B.R” Smith, chipped in with “Got the Easy Turf?” He was referring to the synthetic lawn product that was once endorsed by LT. Apparently he also has this at his Poway home.

Here’s the old commercial:

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