“LIKE SLUGGISH WATERS THROUGH A MARSH…” The poet Sir Walter Scott wasn’t talking about the economic recovery, but his words paint a pretty vivid picture…and after last week’s economic reports, perhaps a pretty accurate one on the state of the recovery.
Last week’s Gross Domestic Product (GDP) report showed that the economy grew 5.9% in the 4th quarter of 2009, which was in line with expectations and the best GDP reading in more than 6 years – which on the surface, sounds like a great number. However, the gains came from rebuilding of inventory and very modest business spending – not from consumer spending. The biggest component of GDP is consumer spending and the revised number on that front came in lower than expected, and far worse than the 3rd Quarter of 2009, when the government’s Cash for Clunkers program temporarily boosted sales.
On the housing front, Existing Home Sales for January were reported at 5.05 Million units, which was less than expectation of 5.44 Million. Existing Home Sales have now declined for two consecutive months. New Home Sales for January were also reported below expectations last week.
Odds are that inclement weather affected the housing market negatively in January – since people are less likely to go house hunting in the midst of snowstorms and freezing temperatures. But in any case, last week’s data demonstrated that the housing market remains a bit lethargic.
The good news is that today’s affordable home prices and amount of supply on the market – not to mention low rates and the government’s Homebuyers Tax Credit – present tremendous opportunities for homebuyers who are looking for a great deal.

So how do consumers feel about the economy? Last week, we got a look at two different reports…and both indicated that consumers don’t share the rosy outlook of politicians and the media. Consumer Confidence was reported at 46.0, which was much lower than expectations of 55.0. In addition, the University of Michigan reported that Consumer Sentiment also fell in February. Both reports pointed to ongoing concerns over employment as a major reason for the drop in consumer attitudes about the economy.
To help make ends meet during the recession, some consumers have turned to earning cash as a landlord.

Forecast for the Week

This will be a big week of news, starting off right away Monday morning with reports on Personal Income and Personal Spending. We’ll also get a look at the Core Personal Consumption Expenditure (PCE), which is the Fed’s favorite gauge of inflation.
As if that weren’t enough news for one day, we’ll also see the Institute for Supply Management Index on Monday. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector, so the markets will be paying attention to this report.
Toward the end of the week, we’ll get another look at employment and housing with the reports on Initial Jobless Claims and Pending Home Sales on Thursday.
Finally, the week ends with a bang when the official Jobs Report is released. This report includes the latest government data on job losses and the unemployment rate, as well as the average work week and hourly earnings. With the ongoing concerns over the struggling job market, it will be important to get a current read on the situation.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
Mortgage Bonds were able to rally last week on weak housing numbers and the struggling jobs market, resulting in improved home loan rates.

MMG WEEKLY

Yes, we are still in a buyers market, but what we are seeing in the Dallas area and surrounding subdivisions is a dilemma between first-time Homebuyer’s and Sellers:

Let’s address the Sellers First

SELLERS:
1st Scenario: just want to get rid of the home and do not want any updates because they see it as they are moving anyway and the home has worked just fine for the or either loosing their home all together and don’t care
2nd Scenario: Very well maintained and will update or have updated along the way and is in pristine condition

Now let’s address the main buyers right now….

FIRST-TIME BUYERS:
1. There is a huge supply right now with the Tax credit (it is exaggerated because it is ending in April and will not be extended)
2. First-time buyers know it is a buyers market, but they have also listened to the media who takes scenarios that are extreme from other parts of the country and make those scenarios the everyday and in Dallas
3. First-time homebuyers also have heard the horror stories from family, friends, and co-workers

What does all this Mean for the First-Time Home Buyer?

A fear of buying, thinking they can get something for nothing, and extremely picky.
The homes that are for sell that are not updated are going very slowly, and the ones that are updated get competing buyers who then get frustrated because they have heard they do not need to pay list price, and they feel they are getting ripped off
So this usually equals them putting several offers on several different homes, which of course frustrates the seller, and getting beat out until they finally believe their Realtor with regards to updated homes and paying close to list price

Advice for Sellers:
1.Be the home that has competing offers! Clean and update your home if you want it to go quickly and not stack up mortgage payments because buyers have high expectations
2. Think about this…why would a buyer buy your home when they can get the same home down the street for about the same price?

Something to think about for Buyers:
1. Usually first time home buyers are not buying the really high end homes anyway so expect to pay close to list price in Dallas, TX (Generally homes, especially on the lower priced homes,really do not have far to fall in price)
2. Our housing index is the lowest since 1971! This combined with low interest rates means you are not getting ripped off and is one of the cheapest times to buy for you.

Some food for thought…

09:03 AM CST on Friday, February 19, 2010
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
Prospective tenants who walk through the front doors of Addison’s new Savoye apartments usually do a double take at the eye-popping design.A wall in the lobby is plastered with bright cushions and big-screen TVs. A metal staircase curves above the round leasing office. And at the top of the stairs is a residents’ lounge with enough bling to fill a high-fashion hotel.

Photos by MICHAEL AINSWORTH/DMN
Cabanas are installed near the ‘Splash’ pool area at the Savoye apartments in Addison. Las Vegas-style pools are what it takes these day to lure renters willing to pay more than $1,000 a month. “The people who come in are pretty blown away by the place,” said Carolyn Fredholm, senior community director for the project. “It’s not what you expect to see in a community north of LBJ Freeway.”

Addison city officials wanted a wow factor three years ago when they teamed up on the project with developer United Dominion Realty.

The Dallas suburb might not seem old enough for redevelopment, but that’s exactly what the town is doing – replacing an aging apartment district on its western edge with new housing, retail and parks.

“The design of that project was very important to us,” said Addison City Manager Ron Whitehead. “We need more urban residential in town to make everything else work.”

The 120-acre development with the unwieldy name of Vitruvian Park is just south of Spring Valley Road near Brookhaven Collage.

The first phase of the $1 billion redevelopment – almost 400 luxury apartments – will open in two weeks.

“We already have 45 leases,” said Tom Lamberth, vice president of development for Denver-based UDR, one of the country’s biggest apartment builders. “We are off to a good start.

“We are primarily attracting people who are part of the North Dallas workforce,” he said.

Uptown comparison

With average rents from $1,200 to $1,300, the project is on par with what’s found in Dallas’ affluent Uptown district.

“We’ve been compared to the W Hotel” in quality and interior appearance, Lamberth said. “We wanted to do something a little edgy.”

WDG Architecture designed the seven-story building. Thiel and Thiel Inc. did the interiors for the public spaces, which are done in a river of light blue paint, modern furnishings and over-the-top artwork.

“What they are showing there is pretty awesome,” said Charles Prince, who’s moving from Lewisville into one of the Savoye units as soon as it’s ready.

Prince works at the nearby Brookhaven Country Club and has watched construction on the project.

“I’ve been wanting to move since last year but waited for this project to open up,” he said. “I didn’t even look at anything else.”

Savoye tenants will have two lounges with gourmet kitchens, a movie screening room, an Internet bar and a game room.

Outside there’s a “Las Vegas-style” swimming pool and landscaped courtyards with fountains, fire pits and seating areas.

Each apartment includes a full-size front-loader washer/dryer combo and a 42-inch flat-screen TV.

The amenities may sound like overkill, but apartment analysts say they are just part of the new rental home landscape. To lure tenants willing to pay more than $1,000 a month, landlords need more than a stuffy “clubhouse” and mattress-size swimming pools.

“You have to do that if you are going to get some pretty high rents,” said Greg Willett, apartment analyst for Carrollton-based MPF Research Inc. “UDR is certainly going for the very top tier at this point in everything they are doing.”

To add to the new neighborhood’s appeal, the city of Addison is building a $9 million park that will be the centerpiece of Vitruvian Park. Rebuilding is under way on the roads that cut through the project near Marsh Lane and Spring Valley.

“It’s going to be especially great when we get the park landscaped and redo the creek area” through the park,” Whitehead said. “Once we get all that amenity package together, we think it will be stunning.”

Vitruvian vision

There’s 16,000 square feet of retail space in the first phase and more planned for later.

Addison, which has about 15,000 residents, ultimately expects to see almost 5,000 housing units in Vitruvian Park.

Of course, the project’s years of planning and construction didn’t include opening the project during an economic downturn.

Groundbreaking for the second phase will depend on how leasing does and where the economy goes, the developer says.

The new apartments will compete head to head with other luxury rental units on the Dallas North Tollway in Addison Circle and near the Galleria.

The developer is offering leasing discounts “because the construction is still under way,” Lamberth said.

UDR is also giving discounts at its new Belmont apartments in Old East Dallas. Such concessions are common for new rental complexes.

Unlike many other Dallas neighborhoods, there are fewer new apartment developments to compete with in Addison, said Willett.

“That market is outperforming the metropolitan area as a whole,” he said. “But to open any project right now is obviously a challenge.”

http://www.mortgagemarketguide.com/howratesmove.html

Increased rates in addition to increased costs, particularly on FHA loans effective 4/5/10, can have a substantial impact on their purchasing power. One of the FED Bank Presidents recently stated that he expects rate to increase roughly 3/4% once the FED Purchase program comes to an end. Now, initially that doesn’t sound good, but remember rates have been incredibly low, so even with a .75 rate increase, that still leaves rates under 6%. So get the word out!

Brian Witty
DFW Texas Mortgage

Here are some facts that can help those who can buy understand why NOW is a great time to buy a home.
1. The Housing Affordability Index hit an all time high in December 2008. This means owning a home is more affordable now than at any other time since the index began in 1971.

2. Fixed Rate Mortgages hit a 50 year low in March of 2009.

3. Federal Tax Credits to home buyers are unprecedented. $8000/yr to FTB and through 04/30/10.

according to the Mairs Group Article

Here is a link to the changes: 

http://portal.hud.gov/portal/page/portal/HUD/federal_housing_administration/docs/fromthe%20deskofJanuary.pdf

http://c.vrguild.net/c/star.pl?U=1001181137012750#

We hope to see with the continuing plans in the Woodall Rogers Park area that downtown will see the continuing improvement that Uptown has seen. Uptown was quoted in the Dallas morning news as the Downtown Dallas uptown.

Are you traveling?

Do you have a Realtor?

Can you keep your home clean for showings?

What s your situation?