Livermore market looks at world news for motivation

"DARLING, I DON'T KNOW WHY I GO TO EXTREMES...TOO HIGH OR TOO LOW, THERE AIN'T NO IN-BETWEENS..." Billy Joel The financial markets endured another week of extreme bipolar behavior, with enormous intra-day mood swings that normally wouldn't be seen over the course of several weeks. While Bonds and home loan rates wildly rocketed higher and plummeted lower on a daily basis throughout the week, fixed home loan rates ended up improved by about .25% for the week overall. And last week...the action started unusually early, stemming from some almost unprecedented weekend actions by the Fed.
Last Sunday night, the news broke that the Fed had not only decided to make a move to lower the Discount Rate by .25%, just two days ahead of when their normally scheduled announcement would arrive, but also that they had helped facilitate the bailout of investment giant Bear Stearns. The 85-year-old company had its stock purchased by JPM Chase at $2 per share, for $236 Million...yep, that's Million with an M. Bear Stearns was trading near $90 at the end of February, with a 52-week high near $160. Bear Stearns was the number one buyer of sub-prime home loans, with a huge appetite for this type of paper - and they bought sub-prime transactions with both fists, a strategy that certainly came back to haunt them.
Adding to the manic-depressive mix was a huge news day on Tuesday, starting with earnings and outlook from two other major financial players - Goldman Sachs and Lehman Brothers - who reported much more positive results than had been anticipated. Particularly on the heels of the Bear Stearns situation, this was very welcome news to a jittery Stock market. New construction numbers came out mixed, along with a hotter than expected read on wholesale inflation via the Producer Price Index...and as if it all weren't enough already, the Fed released their official decision to cut the Fed Funds Rate by .75%. Many people expected a deeper cut, but they likely kept the cut to only .75% because of continuing fears of inflation.
But wait...there's still more. On Wednesday, investment banker Morgan Stanley also came out with a great earnings report, which again was seen as good news by the Stock market, but pulled money out of Bonds. But then...along came big news from the Office of Federal Housing Enterprise Oversight (OFHEO), who announced that they lifted special capital restrictions that had been put in place for both Fannie Mae and Freddie Mac. This will allow these firms to pump $200 Billion into the mortgage market by way of buying Mortgage Bonds. The anticipated increase in demand was very good news for Bonds and home loan rates, which immediately improved on the news.

Home Sales in Livermore are on the rise again....

For the first time, well since I can remember, home sales in Livermore have been recorded as being on the rise. What does this mean? All indications in history would suggest that we have hit bottom, however, history can sometimes be a big tease and a poor indicator of the future, so lets keep a tight watch on the market and see what happens. Livermore real estate will make its come back!!

REO's are a hit in the Livermore Real Estate Market

Bank Owned Properties are smashing in sales in Livermore, the reason is simple.
1. Their priced right
2. The Bank makes a fast decision
3. The buyer gets an insanely great deal
4. The Bank writes off the loss

This coupled with the trend of summer sales and increase volume and lowering inventory of REO's should make our Livermore Real Estate Market get interesting very shortly.

Livermore Real Estate could be heating up

Well the Livermore real estate market has gained some momentum this week following a couple years of disappointment. My phone has been ringing more then in the last two years. Could this be the sign of good summer, could real estate finally have bottomed out? I have seen more action on listings then I can remember, I have had numerous first time home buyers call me to request information on how to get into their first house. Hold on to your hats because things are looking better.