BloodhoundBlog

There’s always something to howl about.

Tag: real estate and politics (page 1 of 1)

March 3, 2011

Rage and Rates… a Tin Foil Hat Production

by

Real Estate Renaissance Man

Author website

I wrote the article below a couple of days ago for a blog on political and economic freedom.  I’m reprinting it here after enjoying some discussion on the matter with fellow Bloodhound and VA mortgage expert Brian Brady.  Besides it being a brilliant piece (of tin foil hat wearing rantings), the article does actually touch on an area that could be of great importance to our real estate buying clients:  mortgage rates.  You see (in an over-simplified explanation), when the world gets scared, money flows to safety.  Safety, at least for the time being, still resides in US bonds.  Though not always correlated, the interest rates on mortgages often travel in the same direction as those on bonds.  So if, for some crazy, unforseen reason, the world becomes a little apprehensive over the next 2 weeks, we might see mortgage rates drop.  The question is: when do you lock the rate for your client?  Well, if we knew the actual date this crazy, unforseen event may occur, we could watch closely and lock right up to the day before. Why the day before?  Because there are three possible outcomes to this disruptive event, and two of them are bad:

  1. It could turn out to be a tempest in a teapot, in which case money will quickly flow out of the bond market and interest rates will rise.  (Because of the inverse relationship between bond prices and interest rates, when people sell bonds the price drops and the rate rises… I see people’s eyes rolling back in their heads… moving on then);
  2. Or, things could go as bad or even worse than expected and oil prices shoot up (geographical hint), causing inflationary fears. Because inflation erodes fixed rate returns, bonds sell off and interest rates rise in response;
  3. Or, things could go as bad or even worse than expected adding to the already existing fear – oil prices be damned; in which case even more money flows to the safety of bonds and interest rates continue to drop.

As you can see, of the three scenarios, two give rise to higher interest rates making us heroes for locking our client’s rate before the event.  If, on the other hand, we find ourselves knee deep in the third Read more

June 9, 2009

Those Who Can Not Remember The Past Are Condemned To Repeat It

by

Associate Broker

Author website

Add This 1934 Cartoon To The “There’s Nothing New Under The Sun” List:

Click for larger image

Click image for larger version

If you think the housing market is bad now – just wait until these economic policies drive interest rates up… and don’t kid yourself – they’re heading up NOW.

George Santayana knew what he was talking about.

It’s a good time to buy real estate – while you can afford it.

March 3, 2009

Confessions of a Married Man

by

Mortgage Officer

Author website

No, not that type of confessions, I’ve been happily married for 23 1/2 years and believe firmly in the “until death do us part” of my marriage vows.

But, after a conversation I had with Teri and after reading Sean’s post and the subsequent conversation in the comments by a number of people including a couple of friends who I respect and value their opinions, I felt I had a confession to make.   Much of this confession is based on what I’ve learned from my wife.

So here goes the confession:
1. There is a LOT to worry about right now.  Probably more to worry about now than any time in my adult life.
2. Listening to CNBC can increase the amount of worry that one has about the financial mess that’s happening.
3. There are a lot of people who make a living off of increasing the worry that other people have.  Many of them work in the main stream media, but many of them work in Washington too.
4. While I agree with people like Sean Hannity and Rush Limbaugh more than I disagree with them, I told Jeff Brown yesterday that I can’t listen to either one of them for very long.   Why?  The way that they play on the worry and discord over what’s happening in Washington is just too depressing.
5. While I have voted in every Presidential election I’ve been able to and all of the congressional elections (off years), I have missed a few school board and township elections.  I firmly believe in the power of people to make a difference by voting, but I’m also very jaded by pretty much everyone who is in Washington and the state capitals as well.

So what did I learn from my wife?   It’s pretty simple:

Don’t worry about things you can’t control.

I can’t control what happens in Washington – but I can learn and be informed about what’s happening so I can make wise decisions.

I can’t control what happens in the stock market – but I can learn and be informed so I can make knowledgeable decisions and help my clients and my referral sources Read more

April 21, 2008

I love freedom too much to be silent

by

Real Estate Broker

Author website

running%20free.jpgI had some time today to write a few words. I’m waiting on a response — I spend half my life waiting on responses. Some people are prompt responders, some are slow, some are UNresponsive.

I was talking with the head relocation person for Gulfstream Aerospace this morning and she was telling me a story about one of Gulfstream’s employees, head muckity-muck of hiring, and how she made a referral to a local agent to help him with housing relocation who never called him. HEAD OF HIRING AT GULFSTREAM AND THE AGENT DIDN’T RESPOND! How does this happen?

Gulfstream is our biggest employer. She also confirmed what a lot of us have been talking about — new hirees coming to Savannah for employment are choosing to hold off on buying. We both concurred it’s the psychological effect, mostly. There is a some legimate cause for fear of the unknown in a shaky market and it’s understandable that people just starting in a new place might be afraid to make the committment to buy a home with so much uncertainty; however, underneath all that is a market opportunity to buy at the lowest point they’ll likely buy at for quite some time.

So, we wait. I am not into convincing people to buy when they are afraid. I give my opinions, identify them as such, show them some numbers and probabilities based on those numbers and let it go. In midtown Savannah this past twelve months there has actually been an increase in home prices — downtown is flat with a slight decrease. But, we wait. A few buy, but the rest, we wait and see how things go for a little while longer.

I have a suspicion that the psychological effect will break after the elections in November. I think many people subconsciously consider that a turning point, and end of some sort, a beginning of some sort. I don’t think anyone knows why, and most don’t consciously hold that position, but they will be affected none the less.

It WILL be a new beginning after eight years of Bush (eight years of any president makes us weary). I personally don’t put much stock in changing administrations Read more

February 14, 2008

For Greg – My Take On Politics and Real Estate

by

Real Estate Broker

Author website

The fascination I have for politics is perverse, akin to the irresistible urge some have to watch Jerry Springer or to view the gory details of a hatchet murder. I’m serious about politics but cynicism has kinked my perception of candidates clawing and spinning their way to the top. We all are at fault for making the presidential race a spectator sport, and we are all at fault for allowing our government to become a feeding trough for special interests.

Republicans or Democrats, it seems to make little difference nowadays which pork-maker you choose, except in how it affects our special interests. Gone, it also seems, are the days people chose a president to lead our nation and protect our constitution, to secure our borders, to ensure adequate policing for the safety of citizens and to ensure rational judgment in courts of law. Now we choose according to special interests and how any certain gang in office will legislate to empower our special interest. We’ve become a balkanized nation and government has become the big daddy provider lording over the factions, pulling strings to create a power base. The candidate who can manipulate the most factions wins.

 I have to believe that the loud voices of extremism that have taken over politics  (because fanatics are more active than moderate, more sensible folk) have drowned out voices that are tired of speaking. That’s my take.

However, I think the game still has to be played, because the results of apathy are too serious to ignore. I’m a free-marketer, someone who believes in a limited government bound by the Constitution. I think a government unharnessed has the natural tendency to grab more and more power until it controls everything – that’s the nature of the beast and history has shown this over and over.

What does this have to do with real estate? Well, forget about current campaign issues for a minute and consider the bigger picture of a growing nation that’s evolving in the private sector from centralization to de-centralization – there is a movement from large metropolitan areas, a spreading out that technology has Read more

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