Why Texas Will Prosper if California Elects Liberals Today.

By Troy Corman, t2realestate.com

According to chiefexecutive.net, Texas ranks #1 as the best state for business, while California ranks dead last. Expect that trend to continue, particularly if California elects the tax-and-spend liberals like Jerry Brown and Barbara Boxer today. Expect Jerry Brown to hike taxes on California wage earners to pay for the mistakes of their liberal state representatives, who have essentially bankrupted the golden state. Those "pulling the wagon" are likely to leave the state in droves.

The uhual indicator tells the story without any complicated mumbo-jumbo economic theories. It will cost you $597 to rent a 26' uhaul truck to take from Dallas to LA, while the charge from LA to Dallas is $2,180. It's simply based on demand.

The nation’s most populous state at 37 million, California had the fastest growth rate in the 1950s and 1960s during the tenures of Democratic Governor Pat Brown and Republican Governors Earl Warren and Ronald Reagan. But in the last 10 years, it's lost 1.5 million residents, while Texas has gained 848,000.

Californians pay among the highest income and sales taxes in the nation, the former exceeding 10 percent in the top brackets. Unemployment statewide is over 12.2 percent. Unfunded pension and health care liabilities for state workers top $500 billion.

“Texas is pro-business with reasonable regulations,” one CEO respondent remarked, “while California is anti-business with anti-business regulations.” Another commented, “California is terrible. Even when we’ve paid their high taxes in full, they still treat every conversation as adversarial. It’s the most difficult state in the nation. We have actually walked away from business rather than deal with the government in Sacramento.” 

Expect both Californians and their businesses to continue to relocate to the great state of Texas. We welcome them with open arms.

  

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Mortgage Rates, Home Sales to Rise in 2011 According to Mortgage Bankers Association.

By Troy Corman, t2realestate.com


During the Mortgage Bankers Association's annual meeting, mortgage pros predict that mortgage rates will rise to 5.1% next year, and will top 6% in 2012. That is, "barring any "blockbuster" announcement from the Federal Reserve next month," said Jay Brinkman, chief economist of the Mortgage Bankers Association.


Mr. Brinkman expects purchase mortgage volume to increase in 2011 to $626 billion next year, up substantially from an expected volume of $480 billion in 2010. Refinanced mortgage loans however, are expected to drop from $921 billion this year to only $370 billion in 2011.


The Mortgage Bankers Association also predicts that home sales will drop 8% this year, while rising 2% in 2011, and jump up 16% in 2012. New home sales will rise by 20% in 2011, and explode to a 40% increase in 2012, predicts the MBA.


Obviously, better economic news will help consumer confidence, and as rates begin to rise, buyers will get off the fence to lock in low mortgage rates. The risk is, as the FED continues to print more money, that rates could jump significantly higher, as inflation has already taken root in agricultural commodities and metals.

Home Loan Closing Costs Rise $1,000 per $100,000 Borrowed in Last 2 Days. WOW!

By Adam Quinones, mortgagenewsdaily.com

Yuck. Mortgage rates are not heading in the right direction.

In the past two days consumer borrowing costs on mortgage rate quotes at or below 4.25% have risen nearly 1.00%. This represents a $1,000 increase in closing costs for every $100,000 in loan amount.

The best par 30 year fixed mortgage rates remain in the 4.00% to 4.25% range  for well qualified consumers, but 4.00% quotes are quickly approaching "not worth the points" territory, which means the costs/points structure is only advantageous to borrowers who intend to keep their mortgage for at least the next 5 years, otherwise paying points to float down your note rate is not worth the additional closing costs (ask your loan officer for a breakeven analysis). Rates below 4.00% are now considered "phantom"...still available but hard to score. In reality, after two days of closing cost increases, 4.25% is a well-qualified borrower's "best execution" note rate. If you're seeking a shorter term mortgage loan, the best par 15 year rates are still in the  3.375% to 3.625% range.

Mortgage Rate Disclaimer : Loan originators will only be able to offer the lowest conventional and government (FHA/VA) mortgage rates if the terms of your loan do not trigger  risk-based loan level pricing adjustments (LLPAs). If you do not fall into the "perfect borrower" category make sure you ask your loan originator for an explanation of the characteristics that make your loan a riskier investment. (eg. credit scores under 720 and investment properties)

Contact Troy Corman with t2realestate.com for recommended mortgage loan officers.

Will the Dollar Decline Inflate Real Estate Prices?

By Troy Corman, t2realestate.com

Don't look now, but your cash accounts in your bank, 401k, and IRA are now worth about 7% less than they were 2 months ago - when compared to currencies in 6 other major countries. In fact, today the dollar is flirting with dropping below the 15-year record low of 80.90 yen.

Inflation is already apparent on the farm. As gold, silver and agricultural commodities sky-rocket, prices of Texas farm land continue to climb. Wheat and corn are both up 34% in a year, while milk has risen 32%. The result has been rising prices on Texas farm land.

Gold and land have long been a hedge against inflation. As those with cash see their savings evaporate in very low interest-bearing saving accounts, some turn to real estate, and rental real estate, for inflation hedging and tax deductions. That's what makes real estate a more practical investment than the stock market, in my view.

Speaking of the stock market, TV pundits continue to promote the bull market, yet in the 30 days prior to October 18th, corporate insiders (company executives) HAVE SOLD SIX TIMES as many shares as they've bought. They've sold $3.5 BILLION of stock, and bought a mere $236 MILLON. What do they know that Joe Public doesn't know?

One thing we do know is that Ben Bernanke is determined to prevent deflation and falling prices. Look for him to continue to rev up the printing presses and flood the economy with more dollars, making the dollars you have worth less.

Inflation is the enemy of mortgage rates. The following is quoted from Adam Quinones from MortgageNewsDaily.com, "We do however know that the Fed is looking to spark a little "Demand Pull Inflation", and we also know inflation is the enemy of mortgage rates. While demand pull inflation won't ignite immediately, if the Fed's QEII plan is as successful as previous alternative policy strategies (which were intended to stabilize the economy, and they did), mortgage rates will eventually rise, and it will happen on the slightest hint of consumer led inflationary pressure or sustained job creation. I'm not even going to venture a guess on when that might happen though. Traders, economists, and analysts alike are still operating in a very reactive manner. Outlooks are constantly changing as the economic and political environment evolve. Let's see what the Fed says on November 3rd and go from there...."

For tips on how real estate can fight the ravaging effects of inflation, contact Troy Corman.

Interactive Map (link) Of Dallas Area Home Sales 2nd Qtr. 2010

Dallasnews.com interactive map shows DFW home sales by area.

By Troy Corman, t2realestate.com

In our crazy local Dallas real estate market, high-end homes are moving while lower cost home sales are stagnant. According to Steve Brown's recent Dallas Morning News article, home sales in Park Cities are up 41% year-over-year, marking the first increase in over four years.

On this opposite end of the spectrum, sales in Desoto, Cedar Hill and Lancaster are down 25%, 17% and 16% respectively.

The Texas A&M Real Estate Center reports that median prices in North Texas are up about 2% compared to 2009.

So what do the well off know that we mere mortals don't know?

"Those that have money are buying because they think this may definitely be the time in terms of pricing," said Dr. James Gaines, an economist at the Real Estate Center. "And a lot of people who have money can't figure out where else to put it.

"They're looking around and thinking in the long run they might just as well put their money in a house they can live in and enjoy."

In this low interest rate and rising inflationary environment, it sounds like a great idea to me! 

Video - Will Demands That Banks' Take Back Mortgages Eventually Drive Up Mortgage Rates?

By Troy Corman, t2realestate.com


State and federal governments are hammering the big banks over their mishandling of paperwork regarding home foreclosures. As a result, Pimco, Fannie Mae and Freddie Mac are now demanding that Bank of America and others repurchase bad mortgage loans that didn't have proper documentation. Real Estate lawyer Stephen Meister thinks that the big banks that dominate the mortgage market will require higher interest rates and costs to offset the developing foreclosure mess.

Texas Mortgage Brokers Talking About 30 Year Fixed Rate Mortgages as Low as 3.75%.

Posted by Troy Corman, t2realestate.com

Texas mortgage brokers discuss how Texas usually has mortgage rates lower than the national average. What's attainable right now? 3.375% for a 15-year mortgage, and 3.75% for a 30-year.