The Effect of the Government Shutdown on Housing

The Federal government has now been effectively shut down for a little over two weeks.  Has anybody noticed?  Probably not yet unless you were planning a visit to a National Park; needed paperwork from a government office; had a loved one pass away and could not obtain funeral benefits for Veterans; work for the Federal government; or live in the DC area. However, the government shutdown is starting to have an effect on the nascent housing market. It also is affecting interest rates (both positively and negatively) so we are seeing them stagnate a bit after an initial ...

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Are Cupcakes and Frozen Yogurt Shops the Next Bubble?

As the stock market hits another low for the year and interest rates threaten to break the 4% "floor" soon on 30 year fixeds, it appears that the only businesses that are booming are (i) cupcake stores and (ii) yogurt places.   I live in Bergen Co., NJ and have seen 4 new yogurt shops (e.g. Red Mango, Is-A-Berry, etc) pop up within 3 miles of my home in the past year or so.  In addition, 3 new cupcake places have opened as well including 1 just this past week.  As a matter of fact, judging by the 6 or 7 new employees crowded into the tiny, yet packed, Red Mango ...

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Fannie Mae prohibits lenders from “Appraisal Cutting”

Many lenders over the past 2 years have reduced the value of  the appraised value of homes after reviewing the appraisal report.  They did this if they disagreed on the value that the appraisal indicated in the report. This practice is known as appraisal cutting. The underwriter, who never saw the property and usually was hundreds (if not thousands of miles away) and was not familiar with the area either substituted their judgment for the judgment of the appraiser or used automated valuation models to do so. In a bulletin from June 2010, Fannie Mae is prohibiting ...

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We’ve Broken 4% (on certain products). Who would have thought?

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Too Much Income is a Problem?

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Slow Housing Activity

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Traditionally, February is the slowest month for house purchases.  I am not sure if it is the lull after the holiday season or the anticipation for the spring buying season, but there are never a lot of transactions during this month.  This year is certainly no exception to that trend. However, what has changed is the nature of the buyer.   The housing market as it exists right now is basically limited to first time homebuyers and those "movers up" purchasing low-to-mid end homes (for purposes of NY metropolitan area I am referring to those with prices up to $700,000 ...

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