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Real Estate & Mortgage Loan Specialist |
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August 2005 |
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It’s been 4 months since I last published
this “monthly” newsletter. I’ve been gathering great information, but unable
to find the time to format it for distribution. The most frequent questions
I’ve been getting are, “Is the market slowing down now that interest rates
have moved up? And are people still refinancing?” The answers are No – the
real estate market is still selling strong, just the number of bids
has gone down, and yes – there still are many people out who are
benefiting from refinancing – mostly people who are moving into longer
term fixed rates. By the way, short term rates have moved up but long-term
rates are still very attractive. If you want to know what your home would
sell for or want to know if it makes financial sense to refinance to a longer
term rate give me call to go over the calculations. Best regards, Sunil Sethi |
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Though housing prices continue to
go up, (see June 2005 stats below), I do not believe we are in a housing bubble.
We keep reading contradictory reports about there being a housing-bubble. Federal
Reserve Chairman Greenspan believes the market has froth and UCLA’s
Andersen Forecast report believes that when prices do come down, they’ll
trigger a recession. However the FDIC
and Barry Habib
of the Mortgage Market Guide believe that jobs decline will be cause of any
future price decline, and since job growth is strong in most regions
nationally (bay
area job growth), they do not foresee a recession and the housing market
should be stable or slower growth than we have experienced. Though I hate to see rapid price
appreciation, because it makes everyone nervous, I would not equate the rise
in real estate market to the internet stock bubble that popped in 2000-2001,
because there is a real asset behind the purchase which is unique and scarce.
Additionally, interest rates are still relatively cheap. Long term rates have
not moved significantly from a year ago. However, if you are buying
investment properties in places like June 2005
Housing Data
Source:
DataQuick Information Systems
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Interest Rates |
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Yes interest rates have moved up since April 2005. The spread
between a 5/1 ARM and 30 year fixed is about 0.5% where it used to be 1-1.1%.
However long term rates are still very attractive. What to expect The Fed
Funds rate moved as expected on August 9 to 3.50%. The Fed says they want
to maintain a neutral monetary policy, which means they’ll move the Fed funds
rate to CPI (about 2 ½ %) + a margin of 1 ½ % which equates to 4.0% . That means you can expect 2 more .25% rate hikes. This means that
the prime rate will go to 7% by year end. New Conforming Loan Size Limit Must banks are moving to the new conforming limit of $375,000 for
a single family residence. Within the next 30 days I expect all the banks to
adopt this new loan limit. Action Points
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Property Taxes |
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The tax bill for the 2005-2006 fiscal tax year will be mailed out
the last week of October, and becomes due Nov. 1 and late if not received by
Dec. 10. If you don’t get it, get it online at here. For those of
you who purchased your home and haven’t’ received your supplemental bill,
call the assessor’s office on when you can expect it or check for it online. |
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Credit Score – How to
increase your score |
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The last two years of
your credit history are the most important in determining your
score. If you have a collection on your report, what to do will depend on
whether the date of last reporting is greater than 2 years. If it is do
nothing, and if it isn’t than negotiate with the collection agency that you
will repay them only if they remove the collection from your report. Get this
in writing. If the first person says no, ask to speak with a supervisor.
Implore to the person, why this is so important to you. If it doesn’t work on the first attempt,
keep trying until you wear them down or find a compassionate ear. Other tips on managing your credit report can be found here. |
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Real Estate
Investment Club – |
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Please let me know if you plan to
attend so I can look for you. All meetings start at Calendar of Events
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Sept. 1-5 - The
Labor Day Ribs Festival in |
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Mark your calendars now for the annual Reno Labor day festival. I
took my wife who doesn’t like to eat any pork to this about 3 years ago, and
it turned her into a ribs lover. More info at http://www.nuggetribcookoff.com/ BTW the 38 Special will be performing
on Sunday at |
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ICE – In Case of Emergency |
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Paramedics will often turn to a victim's cell phone for clues to that
person's identity. You can make their job much easier with a simple idea that
they are trying to get everyone to adopt: ICE. ICE stands for In
Case of Emergency. If you add an entry in the contacts list in your cell phone
under ICE, with the name and phone number of the person that the
emergency services should call on your behalf, you can save them a lot of
time which could be vital in a life or death situation. It only takes a
few moments of your time to do. Paramedics know what ICE means and they look for it
immediately. For more than one contact name ICE1, ICE2, ICE3 etc. So what are you waiting for, ICE your cell phone NOW! |
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It is my
goal to increase my business by 10% each month, and in turn to help those who
work with me to do the same. I believe good relationships, information,
education, and persistence will get me there. No doubt, from time to
time you come across quality people such as yourself who would appreciate the
services I offer. As these people come to mind, would you kindly give
me a call or send me a note with their name and number? I always
appreciate your confidence in me, and I will happily take great care of them.
Sunil Sethi, Realtor, Broker-Owner, MBA, CPA London Business School ’97 Finance & Strategy UC Berkeley ’88 Economics Show and Sell Realty/SMA Financing (510) 793-8600 office (510) 388-2436 cell (510) 344-3080 fax |