Real Estate Information

"OPINION HAS CAUSED MORE TROUBLE ON THIS LITTLE EARTH THAN PLAGUES OR EARTHQUAKES." ~ Voltaire. Opinions certainly caused some trouble in the markets last week as several Fed members talked about inflation, the arch enemy of Bonds and home loan rates, and their comments shook the markets like a high-magnitude quake.

Last week began with Fed Chairman Ben Bernanke suggesting that the Fed is in no hurry to hike rates because of "slack" in the economy. Bonds traded lower on this news, and this may be because many economists disagree with Bernanke and believe a rate hike would actually help strengthen the US Dollar, drop oil prices closer to $100 per barrel, ease inflation pressure and...as a result, help Bonds and home loan rates improve.

Also chiming in last week was Philadelphia Fed President Charlie Plosser, who said the Fed has to take "appropriate steps to do something about" inflation. His remarks helped fan the flames of volatility for Bonds and home loan rates, adding to the sell off in Bonds and worsening of home loan rates.

There was some good economic news last week, but remember good economic news often causes money to flow from Bonds into Stocks, and when Bonds trade lower, home loan rates rise. And that's exactly what happened when April's Pending Home Sales report (which measures signed real estate contracts for existing single-family homes, condos and co-ops) and May's Retail Sales Report both came in much better than expected.

On Friday, the important read on consumer inflation via the Consumer Price Index (CPI) report delivered a mixed bag. Overall inflation is up 4.2% on a year-over-year basis, which is the highest it's been in awhile. This comes as no surprise, when taking into consideration how much the prices of fuel and food have both risen. But the Core Rate of inflation, which strips out both food and energy, increased at a much more reasonable rate of 2.3%. Since Core CPI is seen by most economists as the best measure of the underlying inflation rate, this was really good news. However, Stocks rallied after former Fed Chairman Alan Greenspan chimed in with his opinion that the worst of the credit crisis is over, and this halted any improvement for Bonds and home loan rates.

After all the reports and opinions, home loan rates ended the week at their worst levels in 4 months. I'll be watching closely this week for any more opinions that could shake up the market!

FRIED GREEN TOMATOES - YES, THEY'RE FINE...BUT BE CAREFUL IF THEY'RE RAW, RED, AND ROUND...AS A RECENT SALMONELLA SCARE IS PLAGUING THE NATION. CHECK OUT THIS WEEK'S VIEW FOR IMPORTANT TIPS AND INFORMATION ON HOW TO PROTECT YOUR FAMILY.

There are several reports due this week that could "plague" the markets and home loan rates. Tuesday will bring the wholesale inflation measuring Producer Price Index, as well as a read on the housing market via the Housing Starts and Building Permits Report.

Also, on Thursday, the Philadelphia Fed Report hits the wires. This monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports, and it will be important to see if concerns about inflation have had an impact.

Remember when Bond prices move higher, home loan rates move lower...and vice versa. The chart below shows how Bond prices moved sharply lower last week on inflation concerns, so stay tuned this week! If inflation continues to shake up the markets, Bond prices and home loan rates could have another troublesome week...but prices are at the same low levels they hit last year before starting to improve. Oftentimes, history repeats itself, and should Bonds receive some friendly economic news, it is likely they will gain back some of the ground recently lost.

Summer Food Safety Tips

Summer-time is one of the best times of year to enjoy fresh fruits and vegetables, especially those that aren't available year-round. But recent salmonella outbreaks like those in last year's spinach crops or this year's tomato crops are an important reminder about handling food properly.

The Centers for Disease Control (CDC) notes that there is no way for consumers to detect salmonella since it can't be smelled, tasted, or seen. Here's what they recommend to reduce the risk of exposure during this latest outbreak:

Check the Type

Since April 16, more than 220 people from twenty-three states have contracted salmonella poisoning from tainted tomatoes. As a result, the Food and Drug Administration (FDA) is advising people to eat only cherry tomatoes, grape tomatoes, tomatoes sold with the vine still attached, and tomatoes grown at home since these tomatoes are not associated with the outbreak.

If you have raw red plum, Roma, or round red tomatoes, which are the tomatoes associated with the outbreak according to preliminary data compiled by the FDA, the best thing to do is either throw them away or return them to the store where you purchased them.

Wash, Wash, Wash

One of the best ways to protect yourself is to wash all produce, including organic produce, with cold running water. You should scrub your produce gently with a vegetable brush, or you can use your hands if you don't have a brush. Make sure you remove outer layers of cabbage and lettuce. And make sure you wash fruit, too, even if you don't eat the peel.

In addition, wash your hands with soap and water before handling food and also wash cutting boards, counters, and utensils to avoid cross-contamination. When you are preparing fresh vegetables, make sure you avoid any kind of contact with raw meat. And don't forget to refrigerate sliced up fruits and vegetables.

Ask Your Waiter

If you eat out, ask your waiter what the restaurant has done in response to the outbreak. Several restaurants...including chains McDonalds, Burger King, and Taco Bell, among others...have stopped serving tomatoes, but it's always wise to double check. Keep in mind that ketchup and cooked sauces are not affected since cooking tomatoes at 145 degrees kills salmonella. Don't hesitate to ask your waiter to leave tomatoes off a sandwich or salad if the restaurant hasn't removed tomatoes from its menu. Note that if you remove the tomatoes once your order comes, the food could still be contaminated.

Make the Call

Salmonella poisoning typically resembles the flu, and symptoms usually appear 12 to 72 hours after infection and include abdominal cramps, headache, fever, diarrhea, nausea, and vomiting. If you suspect that you've contracted a case of salmonella poisoning, call your local health department. Reported cases help the CDC and FDA track the source of salmonella.

For the latest information on the tomato salmonella outbreak, visit:
FDA: Link to FDA Information
CDC: Link to CDC Information

Economic Calendar for the Week of June 16 – June 20

Jason Daniels is pleased to provide current information regarding the Colorado Springs Real Estate market.  The following information is provided by Coleen Leri with First Community Mortgage.

"THERE IS NO BARRIER TOO HIGH, NO VALLEY TOO DEEP... NO DREAM TOO EXTREME, NO CHALLENGE TOO GREAT" ~ Charles Swindoll And that motivating phrase was a great motto for last week, as both Bonds and home loan rates ended up being greatly challenged as they dreamed of breaking through technical barriers to attempt some improvement. Lots of intra-week action ensued - but when the dust settled, Bonds and home loan rates rallied in the face of challenges and ended the week very close to where they began.

Bond prices and home loan rates started the week to the upside, as Wachovia announced they were removing their CEO and Stocks faced some selling pressure on the news, moving money into Bonds and helping rates improve. But the rally was very short lived, as Wednesday's "unofficial" Employment Report by giant payroll processor ADP indicated 40,000 new private sector jobs were added in May...and while this good economic news gave Stocks a boost, it pulled money right back out of Bonds and caused home loan rates to worsen. Thursday's positive economic news that unemployment claims for the week were lower than expected caused Bonds and home loan rates to worsen even further, as traders began to speculate on what the "official" Jobs Report by the Department of Labor would contain.

And on Friday morning, along came the big enchilada, the monthly Jobs Report. The Unemployment Rate increased to 5.50%, up from 5% last month - the largest jump since February of 1986. This was much worse than the market expected. And remembering that bad economic news tends to be bad news for the Stock market, but good news in turn for the Bond market, the news was positive indeed for Bonds and home loan rates - helping them to end the week relatively unchanged.

STOCKS AND BONDS AREN'T THE ONLY THINGS ON THE MOVE THIS TIME OF YEAR. NOW THAT WE'RE INTO THE SUMMER SELLING SEASON, YOU OR SOMEONE YOU KNOW MAY BE ABOUT TO BUST A MOVE. CHANGE OF RESIDENCE IS EXCITING, BUT IT CAN ALSO BE A LOT OF WORK. READ THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME TIPS ON HOW TO TAKE THE STRESS OUT OF MOVING!

So we know that employment numbers were the big movers and shakers for the financial markets and home loan rates last week. What's in store for the week ahead, and what could drive more market action?

Keep your eye out for the Retail Sales Report, which will be released on Thursday. The Retail Sales report is a measure of the total receipts of retail stores, and changes in these numbers are closely followed as a timely indicator of broad consumer spending patterns. Recent numbers haven't been too bad - consumers seem to still keep spending away. But, will this week's report show that inflation and high oil prices are finally taking their toll on consumer pocketbooks? A strong Retail Sales Report would be good for the Stock market - which stands to reason, as it would indicate continued consumer confidence and dollars being poured into the economy. But a strong Retail Sales Report would be bad news for Bonds and home loan rates, which benefit from weak economic news.

Sure to be a market mover is Friday's Consumer Price Index report, which gives a read on inflation at the consumer level - that is, how much more expensive are goods and services this month over last month? CPI is a widely watched inflation indicator, and will definitely make headlines. Inflation tends to be bad news for both Stocks and Bonds, so if the report indicates inflation is heating up, this could cause Bond pricing and home loan rates to worsen in response.

Remember when Bond prices move higher, home loan rates move lower...and vice versa. And as you can see in the chart below, Bonds were challenged to improve and break above a strong technical barrier at the 200-day Moving Average....only to end the week being forced below it once again. This is a very important "line in the sand," so I'll be watching closely this coming week - as always - to see if the news of the week will help Bonds break above this important barrier, or remain below it.

Moving can be very exciting...but it can also be a bit of a pain as well. Besides packing and unpacking, there is a long list of details to be handled. Things like choosing a mover, connecting utilities, getting Internet and cable service, or subscribing to newspapers or magazines in a new area can be quite a chore. And if you forget to connect one of the utilities you could be stuck in your new home for several days without that much needed service. To ease the stress of moving and schedule new connections for all of the utilities in one convenient location, simply logon to www.whitefence.com.

You can quickly compare prices for movers, phone, electricity, television, or high-speed Internet. Just select the service you wish to compare--for example, phone, cable, and electric. Or, enter your address on the home page, hit search, and within seconds a list of services and prices available in that area will appear. Next, click on the service of your choice to view details and pricing or comparison shop by choosing three providers. Once you determine the provider, select the service plan, complete the requested information, enter the connection date, and within minutes a confirmation will be sent to you.

If you want to change your current provider, simply hit the icon for phone, cable, or internet, select "switch provider", complete the requested information and a list of providers in the local area will appear. Choose the new provider and the service will be changed.

Additionally, on the site you can complete a change of address form, subscribe to local newspapers, and order magazine subscriptions. Moving to a new home should be enjoyable and exciting. Using this tool can help remove a bit of the stress of moving and will also help save valuable time.

Economic Calendar for the Week of June 09 – June 13

TALK DERBY TO ME...If you did tune in to watch the biggest horse race of the year, you know that "Street Sense" was the lucky horse who won the "Run for the Roses", the Kentucky Derby. And the news from Wall Street was also galloping in fast and furious last week - so let's make some horse sense out of the major headlines that helped Bonds and home loan rates end up slightly improved for the week overall.

First, the Fed's favorite gauge of consumer inflation, Core Personal Consumption Expenditure Index (PCE), showed a year over year reading of 2.1%, which is very close to the Fed's target zone of 1 - 2%. With inflation moderating, the Fed might start thinking about making a cut to the Fed Funds Rate in the 2nd half of 2007. This tame read on inflation was very good news for Bonds, as the value on their fixed returns get eroded by the impact of inflation.

Then, the Jobs Report arrived, with new jobs created in April being reported at 88,000, below what most analysts expected. Additionally, revisions took 26,000 jobs away from previous months reports, the Unemployment Rate rose slightly to 4.5%, and Average Hourly Earnings were reported slightly lower than expected at 0.2%. Overall, the Job Report suggests the strong labor market is softening a touch and wage based inflation pressure is moderating - more good news for Bonds and home loan rates. Wage-based inflation comes into play when the job market is tight and therefore employers are forced to pay their employees more. This naturally results in more dollars being injected into the economy for spending - as well as the cost of doing business moving higher for employers - all of which can cause prices on goods and services to rise.

DON'T MISS THIS WEEK'S MORTGAGE MARKET VIEW, WITH TIPS ON SAVING MONEY ON HOMEOWNERS INSURANCE...QUICK, SIMPLE HITS THAT ARE "SO EASY, A CAVEMAN CAN DO IT."

Benny and the Fed will take center stage this week, as they release their Interest Rate Decision and Policy Statement on Wednesday afternoon. It is highly unlikely that the Fed will make a change to the Fed Funds Rate at the meeting, but it will be especially interesting to hear the tone of the Policy Statement in light of softer Employment Report and moderating inflation.

Speaking of inflation, Fed Chairman Ben Bernanke has to be smiling, as the latest data suggests the Fed is doing a great job in handling the economy. Recent reports have shown moderate, stable economic growth and inflation pressures easing.

The chart below shows that Bonds and home loan rates may be making a move soon. The ceiling and the floor of the current technical range are putting pressure on Bonds, squeezing prices from both above and below...so they'll have to make a breakout soon. And the tone of the Fed's Policy Statement on Wednesday might just be the catalyst for a move. If it suggests that inflation is controlled, Bonds and home loan rates will like this news, and see some improvement - but if the Fed still sounds overly concerned about inflation, Bond prices and home loan rates will worsen.

What do these slogans remind you of? "You're in good hands with..." "Like a good neighbor..." "Own a piece of the rock."

That's right, insurance. And premiums are costing us more and more every year. But there may be some savvy steps you can take to trim the bill and still have your valuables in good hands.

Items that push premiums higher include a pool with a slide or diving board, having a trampoline, or even a dog that has a record of biting others. These factors could be part of higher premium costs, so contact your insurance agent and see if changes can reduce your premium payments.

There are also interior items that can impact the cost of insurance. The coziness of the wood-burning stove may be appealing to the homeowner, but to the insurance agent it could look like a fire hazard, and result in a higher premium.

If you have not done so already, investing in a good alarm system may enable you to shave some of the cost of insurance, while giving you some added protection. And be sure to ask your insurance agent about combining auto and home policies, this could help trim the overall cost of your insurance bill too.

Often times, once the insurance policy is purchased it sits in a drawer until the need arises to file a claim. But taking the time to review your personal insurance policy, just once a year, provides the opportunity to lower the overall annual premium and make sure your valuables are adequately protected. It is also the perfect time to make any additions for personal possessions that may have been purchased or acquired during the year, like art, home furnishings, and jewelry. Additionally, if the home has been remodeled discuss the upgrades that have been made with your insurance agent to insure that all upgrades are covered in the policy. And most importantly, if you need a recommendation to a great insurance agent - just give me a call!

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of May 07 – May 11