Does the Fed really have any control over inflation?

As we sit here and watch a bunch of suits sit around and discuss theory, the rest of the nation is living reality. That reality is the fact that gas prices continue to rise, every other commodity is effected by the rising fuel prices and then to top that off, we have the real estate industry, the engine of the economy of the world continuing to crash or should I say foreclose in around us. To hear Gentle Ben Bernanke and his colleagues discuss the economy, you would think that they are living in a glass castle. Does anyone of them know what it is like to pump or pay for their own gas? When was the last time one of them went to the grocery store to by something to fix themselves?

These discussions about whether to raise or lower interest rates are simply wasted energy. We need to quit focusing on what the Fed is or isn’t going to do because what ever they do at this point is too little too late. They are now talking about raising interest rates to slow the economy. Are you kidding me? This economy is still going backwards. So called Fed experts will tell you that they are managing the economy six months in the future, but if that is they case, they really screwed up six months ago! I have an idea, let’s deal with the here and now. You know, like when they rescued Countrywide from going Bankrupt by getting Bank of America to be the lead bank in the buyout of Countrywide. Or more recently when Bear Sterns was crashing and they got J.P. Morgan Chase to purchase them. Both of these happened overnight and in theory were done to keep things from crashing around us.

Dear Ben, put pressure on the White House to solve the rising energy price challenge. That is your inflation monster. Until you figure out how to do that, everything else you are doing is just giving the talking heads on MSNBC something to talk about so they can keep their jobs.

For questions or comments, please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.

FHA Lifts 90 Waiting Period

In a move to help get foreclosures off the books of lenders quicker and help avoid deterioration of properties that have been foreclosed upon the Department of Housing and Urban Development has lifted their ban on writing a contract if the title has changed in the past 90 days. See the following article: http://www.cnbc.com/id/25146122

For further clarification you can visit HUD’s website at http://www.hud.gov/news/release.cfm?content=pr08-082.cfm

For questions or comments please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.

Summer is almost here!

After spending 5 of the last 7 days on the golf course, I realized (not for the first time) that my future is not in professional golf. Thus I am resigned to continuing to help people achieve the American Dream of home ownership. So what is going on in the real estate world you ask?

Well we finally have the long awaited to changes in FHA mortgage insurance premium coming into play. See the link to the HUD bulletin: http://www.mmbaonline.com/Portals/0/Documents/FHArisk.pdf

Therefore after July 14, 2008 it will be more expensive for borrowers with less than stellar credit to purchase a home. The effect in most cases will be less than $20 per month, but when you are living paycheck to paycheck, $20 a month can be a lot of money!

Foreclosures continue to rise! That is to be expected, but what it has done is that over the past 10 years an appraiser could ignore a comparable sale if it was a foreclosure. Now with the amount of foreclosures, they have to be treated as part of the marketplace. Thus property values are declining in areas of numerous foreclosures. The positive aspect of this is that those property owners who have been complaining about their rising real estate taxes will see a freeze on the rise and in some cases may see there property taxes come down in 2009!

For questions or comments on this post, please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.

FOR IMMEDIATE RELEASE

Contact: Carol Lundgren

314-726-6111, ext. 203

ST. CHARLES COUNTY HOME PRICES RISE 4.4% OVER APRIL 2007

Average Sale Price Up Over $9,000 in 12 Months

Despite statistics in other parts of the country and across the Metropolitan Area, the median home price actually rose 4.4% over last year in St. Charles County. According to figures just released by the St. Charles County Association of Realtors (SCCAR), the average sale price of a home in St. Charles County was $220,791 in April, up from $211,450 in April 2007.

“That’s exciting news for St. Charles County homeowners and homebuyers,” says Keith McCulloh, SCCAR president. “All real estate is local, and these statistics prove that St. Charles County remains a great place to invest in a home.”

McCulloh adds, “The rise in home prices reinforces the fact that buying a home in St. Charles County remains an excellent long-term investment and means of increasing your family wealth. For example, if you purchased your home in St. Charles County in April of 2003, you paid an average of $168,123. Today, that home’s value would have increased by a full 32 percent. That’s a return that would have been hard to beat in other investments, plus it’s tax free.”

In addition, SCCAR figures show that the average home took 94 days to sell in April, up only 14 days over last year. “Again, while you read and hear dire stories about homes sitting on the market for extremely long periods of time, the St. Charles County story is unique. Three months is definitely not a long time to sell a home, so sellers should not be scared off by what they’ve heard,” McCulloh points out.

For more information, call 636-946-4022, or visit www.RightTimeForRealEstate.com.

WILL MY HOUSE EVER SELL?

As you went out into the yard to pick up this newspaper, there was the “For Sale” sign in your front yard. You look at it and shake your head as you wonder if it will become a permanent part of your landscaping. You resist the temptation to see if the sign has grown roots as you walk back to your front door!

If this describes you, you have probably decided that the “self-proclaimed experts” in the media are right; the real estate market is terrible! After all, no one has bought your house! Yes, the real estate market has slowed, but homes are still selling all over the St. Louis region. Plus, despite what you hear in the media, many homes are selling relatively quickly! In March, the average home in St. Charles County sold in 90 days, which is an increase of only 8 days from the average in March of last year!

So, what separates the house that sells from your home with the sales sign that has grown roots in your front yard? In any market, it is all about the basics. No matter what the market is, location, condition and price determine how fast your home will sell! Now more than ever, it is important that you remember the basics! Now more than ever, it is vital that you have a Realtor beside you to help you market and sell your home!

Different neighborhoods have and will always command different prices depending on market conditions. Occasionally, changes in traffic patterns, development and other issues will change the value in a neighborhood. Your Realtor can help you determine the market price in your neighborhood. Since most of us can’t pick up our home and move it, we will talk more about condition and price.

One of the reasons that now is a great time to buy is that there are a lot of homes for potential buyers to choose from. Now more than ever, it is important to remember our mother’s advice when she told us to put on clean clothes or wash our hands because, “You never get a second chance to make a first impression.” You cannot count on a buyer’s ability to look beyond the clutter or the maintenance that needs to be done and see the “inner beauty” of your home! That won’t happen in any market and, particularly, when that buyer has a lot of homes to choose from.

Your Realtor will help you look at your home objectively through the eyes of a potential buyer. Needed maintenance should be completed before your home goes on the market. Moving is a great time to get rid of “stuff” that has been in your closets or in your kitchen cabinets unused or unworn for ages. To help your home make its best impression, clean house now rather than when it is time to move!

Your Realtor will also help you determine if your home needs more tender loving care before it goes on the market. It is important that your yard is neatly manicured, weeds pulled, dead plantings or branches removed, etc. If you don’t have the time, you may want to hire a teenager in the neighborhood or a service to keep up your yard while your home is on the market. Also, a fresh coat of paint is a great way to make your home shine. This is especially true if your tastes run towards the eccentric or non-traditional. Again, don’t expect potential buyers to share your tastes or realize how easy it would be to paint. It won’t happen!

It is important to remember that the market, not your Realtor or a potential buyer, determines the right sales price for your home. The value of your home is not based on how much you have spent on improvements, how much nicer your home is than the others in the neighborhood, how much you owe the bank, or how much you need to clear to afford your new home. Your Realtor will compare your home to others that have recently sold in your neighborhood to determine the right price.

Your Realtor has the knowledge and information to evaluate your home and arrive at the correct sales price. Unfortunately, in the current market, the right price might be less than you were hoping. Yes, you have the option of pricing your home higher than your Realtor suggests and reducing it later. Quite simply, that does not work! Many studies have shown that homeowners that try this strategy end up settling for less than they would have received if they had listened to their Realtor from the beginning.

The good news is that with few exceptions, most homeowners in this market can sell their home for more than they paid for it! Your home remains the best long-term investment available to your family. Plus, most of us will still need a place to live, so you will probably make up the price difference when you begin to look for your new home!

Remember, having a Realtor beside you is the only safe way to buy or sell a home. For more information on why 2008 is the Right Time for Real Estate, call your Realtor today and visit www.RightTimeForRealEstate.com.

Someone Finally Heard the Message!

Stop the presses! After attempting to brand myself as “Your Residential Lending Expert” for over the past 2 years, one of my past clients has finally heard the message. Dave Simons who hosts the “Dollars and Sense” money show on KMOX 1120 AM radio has asked me to join him on Wednesday, May 21, 2008 to discuss what is going on in the mortgage industry. At this time I am scheduled to go on air at approximately 10:10 a.m. The length of the visit should be around 10 minutes.

You can tune in or check out their live stream at www.kmox.com.

For questions or comments, please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.

Declining Markets Part 2

So what defines a “Declining Market?” Some investors have taken their large paintbrush out and if an area; county, city or zip code has seen their average sales price drop in the last quarter; they are calling it a “Declining Market.” Others have chosen a smaller brush and have stretched the time out by reviewing the last six months. Then the rest of the investors have left the defining to the appraisers, which is whose shoulders it should fall on. They are the ones whose job is to provide support that the investor is making the right decision to purchase a loan on a certain piece of property.

So when I checked with a few appraisers to learn their definition of “Declining Market” I was not surprised to find that each appraiser had their own definition of “Declining Market.” The thing to remember about appraisers is that what they do is not a science; it is more of an art. So again we use the paintbrush analogy and there are some appraisers that are running scared and using their large paintbrush and putting the term “Declining Market” in all of their appraisals. Others are taking the time to do a statistical review of the cost of the homes in the various areas and are applying the term when there is a continued decrease of value that exceeds 5% over three six month periods and then there are others who are only applying the term if the valuations have changed by greater than 10%.

In addition, most investors are only concerned with reducing the loan to value on Conventional loans. On FHA and VA loans, the appraiser has factored the market into the value and it does not have an impact on the amount the borrower can borrow.

For questions or comments on this, please contact Chris Scheer at cscheer@cornerstonestl.com or 314.223.9824.