New Listing in Gated Community of Mtn. High, Bend

This single level home features 3 bedrooms, a den/office, 2 bathrooms, a large dining/breakfast area in the kitchen plus a formal dining room. The quiet, impeccably landscaped .60 acre setting is on a quiet cul-de-sac and features majestic ponderosa pines, a large rear deck and hot tub. Three car garage and new roof and water heater in 2008. Mountain High features 9 hole golf, a pool and tennis courts. Really a terrific buy at only $399,000. Call me today to see this beautiful home

Citi Endores Cramdowns

Citgroup agreed earlier today to support legislation being pushed by some Senators to allow bankruptcy judges to require lenders to restructure mortgages.

In a process referred to as a "cramdown," the judges could lower the principal amount of a mortgage loan so that it equals the current market value of the property. In addition to lowering principal, the bill being considered also would allow judges to lower a loan's interest rate, extend the term of the loan or use a combination of all three actions.

Up to this point, the financial services industry has resisted such legislation, claiming that it would force them to raise interest rates to offset revenue lost from such restructurings.

But after the government pumped $45 billion in new capital into Citi last year as well as agreeing to stand behind hundreds of billions in potential losses from the company's risky assets, the new congress has much more leverage with which to push through such legislation.

Stay tuned!

Sales Stall While Re-Fi's Boom

Despite record low interest rates, home sales in the Bend area continued to stagger along in December.

Just 69 closed sales of single family, stick built houses on less than one acre in Bend have been reported to MLS for the month, compared to 81 in December 2007 and 70 in November.

There are currently more than 1000 completed houses for sale in Bend. Based on the rate of sales over the last couple of months, the absorption rate is over 14 months. A market is generally considered balanced when there is about 5 to 6 months of inventory. Obviously we have a ways to go before we get back close to equilibrium.

Prices also continue to slump. The median sale price for December closings of stick built houses on less than 1 acre was $224,900, with a median dollar per square foot of $126.2/sf. A year ago, the median $/sf number was $160.6/sf.

One bright spot is loan refinancings. A friend of mine owns a local mortgage company and says they are swamped, with re-fi applications making up about 90% of his current business. And it's no wonder; with rates now near 5%, refinancing a $300,000 loan from a 6.5% interest rate will cut the monthly payment by about $300!

So contrary to many rumors flying around, lenders are still making loans. With an adequate debt-to-income ratio, a good credit score and income that can be documented (with a W-2, for example), a buyer can get an FHA loan with as little as 3% down and an interest rate around 5%. At Bend's recent median price of approximately $225,000, that's only $6750 down and a monthly payment of around $1175 per month.

Please feel free to call or email me for more information about Bend real estate matters or to talk about buying or selling real estate throughout Central Oregon.

Central Oregon Foreclosure Listings Now Available

Be among the first to know about newly listed foreclosure properties in Central Oregon!

With nearly 1 in 18 listed residential properties in the Bend area currently lender owned, I have launched a service to provide you with up-to-the-minute information on any newly listed and reduced price foreclosure properties throughout Central Oregon!

This new service provides you with "live" information directly from the MLS via email, so you'll be just as much in the know on available foreclosures as local real estate agents!

The service can be customized to fit exactly what you're looking for (area, price range, size, etc.) so you can be sure to get only those properties that are of interest to you.

So if you are currently in the market to buy a foreclosure or have been thinking about it, call or email me and I'll get you set up to receive free, up-to-the-minute emails on foreclosure properties.

Record Low 10 Year Treasury Yields

On the heels of the Fed's rate cuts yesterday and an accompanying statement that read in part that it "will employ all available tools" to promote economic growth, the average yield for 10 year Treasury notes fell below 2.15% earlier today for the first time since the Treasury began providing daily data in 1962.

30 year Treasuries also hit their lowest yields since sales of the security began in 1977, averaging 2.63%.

While there is no direct relationship between the two, mortgage rates tend to follow the direction of 10 year Treasury yields. With rates for 30 year mortgages already near historical lows, will we see them fall below 5 percent in the near future?

Fed Cuts Rates Even More Than Anticipated

The Federal Open Market Committee voted unanimously to cut the fed fund target rate to a historic low of 0% to .25% from 1% earlier today.

In addition, the Fed also lowered its discount rate, the rate charged by the Federal Reserve for loans to commercial and investment banks, from 1.25% to .5%.

As noted here before, these rate cuts should lead to lower rates on home equity lines of credit (HELOCs) as well as other consumer debt.

Interest rates on 30 year fixed rate mortgage loans are now ranging around 5%, which is well below historical norms.

The monthly principal and interest payment on a 30 year loan of $240,000 at 5% would be about $1290. At 6%, the payment would be about $150 more, or $1440. Today's rates provide quite an increase in purchasing power.

Core Inflation Unchanged From October

The Labor Department reported that "core inflation" remained unchanged in November from a month earlier and was 2% higher than a year ago. A 2% annual inflation rate is widely believed to be within the target range preferred by most central bankers.

"Core inflation" excludes food and energy, as these tend to be more volatile than other goods and services. For example, energy prices have fallen about 70% since July and 17% in November alone! This is most obvious to most of us when it's time to fill up the gas tank.

The Federal Open Market Committee is meeting today and most analysts expect a rate cut of .5%. The recent inflation numbers make that scenario even more likely now.