Interest Rates

Rates remain very attractive, but for how long?


"IT AIN'T OVER TIL IT'S OVER." Yogi Berra. And whether you find those words deeply wise or simply puzzling...The Fed has told us repeatedly that their massive purchasing program of Mortgage Backed Securities is just about over - and this translates to home loan rates rising in the near future.

As you can see in the chart below, the amounts of Mortgage Backed Securities the Fed is purchasing are slowly dwindling, as the program is set to wrap up by March 31st, and are clearly trying to ration out the remaining portion. Last week, the Fed purchased $11 Billion in Mortgage Backed Securities, which leaves them with $66 Billion to spend out of their original $1.25 Trillion allotment. So about 95% of the total has already been spent and has purchased about 3 out of every 4 home loans during the past year. When such a large buyer leaves the market, it is very likely that prices will worsen.

This is very important because as the Fed has less money to last through the remaining months of the program, their ability to keep home loan rates low via their purchasing power will wane. And those who can take advantage of currently low home loan rates do not wait, as the clock on these historically low rates is ticking.

Also last week, Fed Chairman Ben Bernanke provided a speech on a number of topics, perhaps the most important of these being switching the Fed's benchmark from the commonly watched and monitored Fed Funds Rate, to a new benchmark of "interest paid on excess reserves". Banks are required to keep money on reserve with the Fed and may, from time to time, have an excess in those reserves, which the Fed can pay interest on. Since the Fed Funds Rate is only a "target rate", banks can still lend money to other bank overnight at their own negotiated rate. Sometimes near the end of the trading day, banks have been lending their excess reserves out overnight for a rate that differs from the Fed Funds Rate, but is higher than interest on those reserves from The Fed. This undermines the Fed's ability to set a reliable benchmark.

The Fed wants to fix this by using the amount of interest they pay as the new benchmark, since the Fed has total control of this rate, which should be right at or just under the Fed Funds Rate.

There is one major take-away from this discussion - it appears that the Fed is getting their ducks in a row as they prepare to push interest rates higher. And when they do increase rates, the Fed does not want any obstacles that may undermine their plan.

New Bern Home Sales to date 2010

Home sales in all of Craven County to date

2010=62
2009=55

Home sales to date are tracking along about 12% higher than last year so than last year. This is good news and we will moniter this closely for the remainder of the year and keep you informed.

Existing inventory is a little higher than at the same time last year and we do not know why that is the case but don't feel it is a problem at this time.

Stay warm and we will update you again next week

Exclusive New Bern Real Estate Research

Want some really usefull Real Estate Research on the local market? This is a large file and might take 1-2 minutes to download.
http://www.newbern-nc.info/2009-4Q.pdf


Steve Tyson
252 514 9157

New Bern Home Sales

46 Home sales from Dec.1-Dec.20 2009 have been recorded. This compares to the following sales in previous years.

46 sales in 08

95 sales in 07

131 sales in 06

It is good to see sales this month are in line with sales last year during the same time period. You cannot compare them to 06, 07, because we will never see sales like that again. Those were unsustainable numbers that the new banking regulations will prevent from happenning again.

Have a safe and wonderful. Christmas.

E-Pro Certification

As a recent graduate of the Realtor certified E-Pro Coarse I learned quite a bit about the web as it relates to the real estate industry. If your Realtor is not up to speed with the web, you are not getting your moneies worth. Especially since 85% of folks begin their search for real estate on the wen.

Well, December sales are off quite a bit from last year. I still think it is because many folks made a effort to buy in November to make sure they got the $8000 tax credit. So in essence we borrowed buyers from the future in November but that is ok.

New Bern Real Estate

November 2009 sales=105. The highest price sold was $845,000 and the lowest was $42,999.

November 2008 sales=70. The highest price home sold was $500,000 and the lowest was $39,000.

Good news. Lets hope so. Not sure why this happened except that perhaps the 1st time home buyers tax credit spurred on a dash at the end of December.

New Bern NC home sales

2009 New Home sales to date=292
2008 New Home sales for the same time frame=339

This is about a 14 % decrease in new homes sold.

The following represents new and existing homes sold, Jan 1-Nov 28
2004=1669
2005=2203
2006=2226
2007=1823
2008=1391
2009=1099

I will let you draw your own conclusions from this data but will add that if you are think about buying a home it is a great time to do so with interest rates low and buyer incentives from Uncle Sam and sellers. Don't wait and miss the boat.

Steve Tyson
http://www.newbern-nc.info/

New Bern NC Home Sales

Ok, Here we are. New home sales for the last 7 days. Click or copy and paste the link below.


http://www.easternncmls.com/new/maildoc/b006vK4723.html

Wounded Warriors

Dear Friends and Fellow Americans,




Last week we received a phone call from the Military Order of Purple Heart requesting assistance in their effort to raise funds for the Wounded Warrior Christmas Leave Fund. This fund was set up to assist wounded Marines stationed at the Camp Lejeune Wounded Warrior Barracks. These Marines have suffered greatly, some with debilitating injuries such as loss of limbs, etc. When asked "What do you want for Christmas?", many of these wounded Marines replied that they wanted to spend Christmas with their families. Quite a few of these brave men and women cannot afford the cost of travel, therefore, the MOPH-Wounded Warrior Leave program was established. We had a fund raiser for this event several years ago. You can read about it by going to this link http://www.wwclp.org/news.shtml



This project buys airline tickets, hotel rooms, rental cars, bus tickets, whatever is necessary to get these wounded Marines together with their families and grant them their Christmas wish! This program has no overhead. All funds raised go for travel. If the wounded Marines are not able to travel due to injuries we will bring their loved ones to Camp Lejeune.



Please join us Tuesday, December 8th from 5:30-8 PM for a fundraiser at New Bern Golf and Country Club where our guests of honor will be several of these wounded Marines.There will be heavy hors d'oeuvres and a cash bar. Bring a check payable to "MOPH-Wounded Warrior Leave".

Our donation goal is $25 per person or more for attendees. Even if you can only stay a short while, please come by and meet these brave Marines and let them know we appreciate the sacrifice they have made!



If you have other obligations but are still willing to help with any amount of donation, please mail a check ASAP, payable to

MOPH-Wounded Warrior Leave. Send to Steve Tyson, 820 Broad Street, New Bern, NC 28560



We recognize this is short notice, but there is a deadline of December 8th in order to have the time to utilize the money raised. The limited time-frame is why we are attempting to contact as many people as we can by email. If you know someone that would be interested in attending and/or donating to this worthy cause, please pass this email on. It is important that you send this email on to all your email contacts. We hope it will travel around the entire country. Blog it, Facebook it, Tweet it, but keep it moving.



DONATIONS ARE TAX DEDUCTIBLE AND 100% OF THE MONEY RAISED WILL BE SPENT TO UNITE THESE WOUNDED Marines WITH THEIR FAMILIES FOR CHRISTMAS!



If you can attend Please RSVP by email as soon as you can to stevetyson@ncmove.com or call 252-633-5720.



Thank you for your support,



Steve Tyson Craven County Commissioner Tom Braaten Major General(retired) USMC

New home sales in New Bern

In the last 7 days the following homes closed in the Eastern NC MLS.New Bern NC Home Sales