Yes… you may have received random posts from January and March out of the blue if you’re on the automatic email program.

Last Monday, the support network for my blog (Tomato Blogs) was deliberately attacked by a yet unknown evil person who wiped out a lot a data and targeted 20 specific blogs.  They don’t know why, how, or who yet… but they’re working on it.  My blog was down for several days, and when it came back online, everything from January on was missing.  The guys at Tomato Blogs are busy trying to reconstruct the data, and we’ll have to see what we all end up with.

In the midst of all this, I’m working at the business of real estate, and trying to personally move. It’s a little hectic…….

So– my apologies for the insanity. I ask for your patience.  If you have any questions or concerns (or want to buy or sell a home), call me at 614–296–0715…. I’ll be delighted to help in any way I can.

We’re all working to get back on track to normalcy…..

In honor of all those St. Pattys Day fans who may have had one too many green beers and are seeing things a little crooked.. heres a winner that will make you feel right at home.

Yes, this is a real photo in the MLS. No, the home hasnt sold yet. Yes, they should get a realtor who knows how to take a photo that compels a buyer to visit their house

Whats Going On??

Heres a Looooong answer coming from The FNMA Capital Markets Sales Desk that actually presents a good picture of whats going on. If youre really interested, sit back, read up, and learn..

The Capital Markets Sales Desk has fielded a large number of calls from customers simply asking, whats going on? Why is the mortgage market trading lower every day? The following are reasons that could help explain why mortgages are struggling and why current market conditions are so volatile.

The question is, why are mortgages widening or losing value vs other benchmarks like treasuries? Mortgages are widening for a number of reasons. First, there are no buyers. The dealer community is quite full and has no more balance sheet to hold mortgages. In addition, with the market so volatile, dealers dont want to own mortgages at this time. Another reason why dealers do not have an appetite for risk is quarter end. Most dealers are experiencing a quarter end in March and have become even more conservative.

Banks are not buying either. They are more concerned with retaining capital to cover potential losses in other sectors. Banks and other securities firms have written down an astonishing amount of losses since the subprime mortgage market fell apart last summer. According to Bloomberg, as of February 8th, write-downs by banks and securities firms around the world had reached $120 billion. Therefore, banks remain defensive and prefer to either retain capital or put it to work in other AAA rated sectors.

Asia has been noticeably absent as well. Asian banks generally buy on strength and its obvious there hasnt been any strength exhibited in the mortgage market recently. Also, Asia is generally more active at the end of the month so their absence this week is not a complete surprise.

Money managers and hedge funds arent buying for the long term either. What they are doing is called momentum trading. They are buying at the wides (cheap) and selling at the tights (less cheap). Since they are buying and selling, they are not taking any production out of the market leaving the market to trade in a volatile fashion. The market is also trading very thin so exaggerated price movements occur when larger blocks are brought to market.

Okay, we know that dealers, domestic banks, Asia, money managers and hedge funds are not buying. But, who is selling? Well, we know servicers have been selling. When the market sells off, the current coupon increases and servicers attempt to keep their hedges in the current coupon. Therefore, servicers need to sell lower coupons (longer duration coupons) and purchase higher coupons (shorter duration coupons). This is called moving up in coupon and is a form of shedding duration. However, in large market moves, servicers may need to sell without the corresponding purchase of the higher coupon. This is called outright selling. The outright selling and duration shedding from servicers has put extra downward pressure on mortgages.

Originators are also selling. Although, with higher mortgage rates, originators arent selling as much as they were a month ago, the amount they are selling remains significant.

Okay, servicers and originators were the two expected suspects, but are there any other sellers? Unfortunately there are, and this group of sellers is what brings fears to the market. Thornburg Mortgage, a mortgage REIT that specializes in Jumbo and Super Jumbo mortgages received a margin call from JP Morgan in late February. A margin call is a demand for cash on an under-collateralized loan. Thornburg was unable to meet a $28 million margin call and may be forced to liquidate its holdings. We are hearing talk of a $4.4 bln list of Non-Agency ARMs and pass-throughs out for the bid from Thornburg today.

Another seller may be Carlyle Capital Corp, which is an investment bond fund located in Guernsey, UK. CCC missed four of seven margin calls totaling $37mln and another margin call notice is expected. According to Bloomberg, the fund raised $300mln in July and levered the money to purchase approximately $22bln in various forms of MBS. A portion of this $22bln is expected to be sold, and some market participants venture that a portion is being marketed today.

Although this is only two of the many accounts that participate in the MBS markets, their forced sales could have major repercussions. For example, lets say the bonds that are sold are sold at very low dollar prices. That may cause other market participants to mark their own portfolio down to current market levels. This may cause further write downs. The fear of further write-downs has banks on the defensive to a point where they want to preserve capital. If banks are preserving capital, then they are obviously not investing in MBS.

The few investors who do have available capital are putting their money to work in more profitable sectors. Municipal Bonds and certain classes of CMBS are yielding more than Agency MBS and have a AAA rating. Despite the inherent €œcheapness€ in the mortgage market, there are still other safe investment options that are more preferable at the moment.

In summation, we have more sellers than buyers. The selling bias puts pressure on mortgages, forcing mortgage prices lower and wider. The usual buyers of mortgages arent buying or are buying other investments at cheaper prices.

Another trend weve noticed is a flight to quality within the mortgage market. Generally, when the market experiences a flight to quality, money is moving into US Treasuries. However, with treasury yields so low, market participants are buying the next best thing, GNMA MBS. GNMA MBS has the explicit guarantee of the US Government. Purchasing GNMAs allows an investor to enjoy the explicit guarantee while yielding considerably more than US Treasuries. In times like these, banks prefer to own GNMA MBS vs conventional MBS for a reason other than the explicit government guarantee. The reason is capital. Banks have to hold a certain amount of capital against their investments. However, they are required to hold significantly less capital against their GNMA holdings vs. their conventional MBS holdings. With the flight to quality within the mortgage market, and a preference by banks for GNMA MBS, it is no wonder why the GN/FN swap spreads have gapped out to astonishing levels. The current GN/FN 5.5% swap has gapped out from 18/32s from January 22^nd, to its current level of 59/32s.

Another thing to keep an eye on is ARM issuance. The yield curve has steepened in recent weeks (current difference in yield between the 2yr treasury and 10yr treasury is 208 bps). Generally, when the curve steepens, the difference in ARM rates and 30yr mortgage rates increases. Therefore, one may assume ARM issuance is likely to increase now that the curve has steepened. However, due to the lack of liquidity in the market, ARM MBS is trading extremely cheap. In other words, the correlation between a steep yield curve and lower ARM rates has decreased. Because lenders cant sell their current ARM production in the secondary market at respectable levels, they cant lower their offered rates. When liquidity improves, look for ARM issuance to increase.

THIS is a kitchen. The question is does this SELL the kitchen? Or where the kitchen is located? Does it make the viewer want to cook in the kitchen?

Does the layout make sense to the viewer? Does the viewer understand what he/she is looking at?

If youve answered no. youre not going to be compelled to buy the house

Heres the Good:

Now, lets look at the year 2005 the high point of sold homes, highest average sold price, etc. That year there were 50,086 new listings, and 27,493 homes sold. So, 55% of the new listings sold.

Now these figures dont allow for the existing listings coming into each year.. but folks, stop and take a look at these numbers. If you buy into the pervasive media doom and gloom, you believe that nothing is selling and nothing is working. Thats just NOT true in our area of the country. We had over 24,000 sales last year! Remember, Columbus has been described as the 3rd most stable market in the country. Our property values have been considered as undervalued compared to pricing of homes across the country, and our employment remains stable.

Heres a few stats for the Negative Nellys:
The average sold price was 1.2% lower than 2006 ($172,531 compared to $174,688).
The credit challenged had their lending sources dry up.
There was a lot more competition (as in many homes) in the market challenging for seller who had to reduce their pricing to compete, fabulous for buyers who had a lot to choose from.

This photo brought a chuckle out of me.. youve GOT to love good country livin in THIS home! Why the photographer thought the hay bale was an important component to the photo is beyond me.

Ive had people ask if these photos are really from the MLS of central Ohio homes for sale the answer is yes. And so far I havent had a problem coming up with a weekly winner.

If you want your home sale to be at its marketing best, give me a call. and get the professionalism you deserve.

There are two this week both of the same home. If youre feeling a little blue, these should be right up your alley..

This looks like it could be a nice home. if I could actually SEE it. The photo is so overexposed that its hard to tell what the features are.

Folks look for photography that gives the viewer the best possible representation of your home. and an agent that can deliver the online product you need.

At first, THIS is another you got me photo, where I have NO idea what Im looking at. Then, realization dawns and I know to turn my head to the right sideways and squint its an overexposed photo of a fireplace. (Buyers shouldnt have to work this hard to figure out what they are seeing.)

With the advent of Spring (hopefully) around the corner, heres a couple of photos that arent the WORST, but definitely fit in the fun/bizarre category. and yes, these are the real colors showing up in the MLS

This room gets lost in the furniture and stuff. It takes a bit to figure out its a finished basement (basement? bedroom?) and the eye is overwhelmed.

Five minutes of removing the clutter, removing some of the furniture, and even rearranging the items would have made a world of difference. And how about closing the door? The purpose is to see the room in a way that makes it desirable..

A special reminder to the curious. these are all photos that are really on the Columbus MLS with the intent of selling a home. I dont identify the property or the realtor Im not into shame or humiliation. This category grew out of frustration (by myself) of seeing unprofessional work out there. I want to educate and encourage sellers to expect professional results for professional pay and to be aware of how important it is to put your best foot forward on the Internet. Buyers are finding your home online, judging it, and moving on to another home (in many cases). Its even more important with todays buyer market that you do the right stuff to sell your home.