Weekly Update

June 28th, 2024 - #457

Good evening, gang,



Welcome to the final weekly update of the month of June. Again, our editors have found some great stories to share with you this week. If you find one that you particularly like, please forward this update to your friends, family, coworkers, or clients, who may enjoy the stories and mortgage update as well, especially if they have questions about their mortgage budget, credit, home loan items, etc. We would love the opportunity to have a chance to talk to those folks who are looking to buy, sell, refinance, or renovate, and earn the chance to help. This week, rates bounced around this week- the results of which you can see just above the trivia question. Before you scroll down to the rates and trivia, as usual, there is LOTS GOING ON, SO LET’S GET STARTED.

CRAZY STORY

A few weeks ago, we highlighted a story about a man outside Vienna, Austria who discovered three woolly mammoth skeletons beneath where he was excavating his wine cellar. And while we have no word on whether woolly mammoths prefer red or white wine or full-bodied or fruitier ones, there may now be some insight as to what Romans enjoyed over two thousand years ago.

The white wine pictured below (although it’s taken on a reddish hue over the past two millennia) was discovered in an undisturbed Roman Empire era tomb in southern Spain. A local family discovered the tomb while doing some work on their property and immediately called the local archaeological department. After it was analyzed the liquid in the urn, “turned out to be quite similar to the wines from here in Andalucia... sherry type wines from Jerez and manzanilla from Sanlúcar.” But the archaeologists resisted the temptation to sample the concoction... primarily because it was located in a tomb for 2,000 years. One of the archaeologists suggested that “they have a tiny little glass to celebrate the discovery.” But, even after extensive chemical and microbiological analysis found that it wasn’t toxic, one of the archaeologists said, “I guess you could filter it and try it but I'd rather someone else tried it first though.”

Regardless, not sure how long you’re supposed to let a 2,000-year-old wine breathe before trying it but click below to read more. 

WORD SOUP

While it’s nowhere as old as the Roman wine urn in our crazy story, this section highlights a few words recorded by a British writer who recorded thousands of Victorian slang words in the hope that they wouldn't be lost in history. You can click below to see a sampling of them so that you can use words like mutton shunter, giggle mug, fly ring, sauce box and gas pipes correctly ALL WHILE hoping that NO ONE calls you a Pumblechook because of your role in a Row-de-dow. Click below to read more.

Since the Victorian era was over more than one hundred years ago, lets focus more on TODAY’S English. Ever get confused about whether biweekly means twice a week or every two weeks? IT COULD BE BOTH! Merriam-Webster, Dictionary.com, and Cambridge offer both definitions. The same goes for bimonthly and biannual, which can mean either twice a month or every two months, and twice a year or every two years, respectively.

Merriam-Webster editor Peter Sokolowski can’t even answer that question, and if the EDITOR of the Dictionary doesn’t know… how can we. Mr. Soklowski suggests either providing context or simply saying "twice a week" or "every two weeks" to avoid confusion. we could go another direction and bring back the word "fortnight" to mean every two weeks.

Would love to see a contract for a house to list the closing timeline as "on or before the passing of TWO FORTNIGHTS." Click below to read more. 

REAL ESTATE TO BEHOLD

Justin Timberlake recently cashed in on Nashville’s soaring real estate market, when he said “Bye Bye Bye” to his 127-acre Tennessee property near Leiper’s Fork for $8 million. Acquired in 2015 for $4 million, the sale reflects Nashville’s strong luxury home prices, though this one sold below his $10 million asking price. The land, known for its natural beauty and protected status, includes a fishing pond, trails, and pastures. PERHAPS that closing being N'Sync was what Timberlake celebrated or

OVER-Celebrated in Sag Harbor, N.Y. when he had his recent alleged run in

with police officers on June 18. Timberlake, a Tennessee native, is

currently on his Forget Tomorrow World Tour. Click on the pictures below to read more about this gorgeous piece of undisturbed property.

Speaking of celebrities, our next property has hosted many A-list residents and guests including none other than Eleanor Roosevelt and Brooke Shields. This historic private island retreat in New York’s Adirondack Mountains, known as Camp Northwind, is now on the market for $2.97 million. Built in 1928, this five-bedroom residence has a rich history. Situated on an 8.6-acre island with 3,400 feet of lake frontage, the property

features unique architecture with sandstone walls, custom woodwork, and

original hardwood floors. It includes a two-story boathouse, stunning lake

views, and easy access via boat or private causeway. Click on the pictures below to see more.

Our last home comes to you from south of us, down in the Sunshine State. Daren Metropoulos, the40-year-old investor known for purchasing the Playboy Mansion, just dropped $148 million on a lavish oceanfront estate in Palm Beach, Florida. The Mediterranean-style Casa Amado, designed by Addison Mizner in 1919, features 10 bedrooms, a gym, and a movie room, plus a pool, tennis court, and beach cabana. Originally bought for $12.1 million in 2003, the property had been renovated after a fire in 2007. Metropoulos, co-owner of BlueTriton Brands, plans to preserve the estate's classic charm while enjoying its beachfront allure. Some people collect baseball cards... this guy collects luxury homes. His real estate portfolio already spans New York City, Miami Beach, Hawaii, and Martha’s Vineyard, and this latest acquisition solidifies his

reputation as a collector to the max or connoisseur of luxury homes.  Click

on the photos to read more.

THE ECONOMY AND REAL ESTATE

We received another reading on the overall strength of the economy with the most recent Gross Domestic Product reading this week. The U.S. economy grew by 1.4% from January to March, marking the slowest quarterly growth since spring 2022. However, the economy remained resilient, supported by a 4.4% rise in business investment, inspite of interest rates. Consumer spending grew at a 1.5%, reflecting more cautious spending habits, BUT still increasing. Imports and lower business inventories also overall contributed to the slowdown. Overall, the economy has defied economists’ recession predictions, by continuing to grow and add jobs. Inflation has eased from its peak in 2022, but remains above the Fed’s target, BUT this hopefully continues us towards the path of anticipated rate cuts later this year. Click to read the full story from AP News below. 

Did someone say inflation? Potentially the big news on the week was the most recent reading on inflation using the Federal Reserves preferred reading on inflation with the recent report on Personal Consumption Expenditures. And gang, it was good news! Inflation slowed down to its lowest annual rate in over three years in May. The core PCE price index only rose by 0.1% for the month and 2.6% over the year. This indicates that the Federal Reserve's policies are working to cool inflation. Additionally, personal income saw a healthy increase of 0.5%, although consumer spending grew slightly less than expected at 0.2%. Overall, the data points to a gradual easing of inflation, which is a positive sign for both businesses and households. Markets initially responded positively, reflecting optimism about the economic outlook. Click below to read more about latest on inflation below.

Last month housing set a new record. In May, home prices hit a record high, with the national median existing-home price reaching $419,300, up 5.8% from last year. Despite high prices and elevated mortgage rates, which have slowed sales, the market remains competitive due to low inventory. Bidding wars are still common as sellers are hesitant to list their homes, keeping supply tight. Sales of previously owned homes fell slightly by 0.7% from April and 2.8% year-over-year. Interestingly, about 28% of homes were bought with cash, showing strong demand from buyers unaffected by mortgage rates. This dynamic market keeps on going. Click the chart to read more from the Wall Street Journal.

While the article linked above from the Wall Street Journal talks about the resilience and increases in housing prices, there are some articles and media sources that try to highlight the you pockets that may be declining so we thought we'd include an article from our friends at Keeping Current Matters that addresses exactly that, with an article titled, Home Prices Aren't Declining, But Headlines Might Make You Think They Are. (we’re looking at you New York Times..)

Keep reading below. 

Home Prices Aren’t Declining, But Headlines Might Make You Think They Are

If you’ve seen the news lately about home sellers slashing prices, it’s a great example of how headlines do more to terrify than clarify. Here’s what’s really happening with prices.

The bottom line is home prices are higher than they were a year ago at this time, and they’re expected to keep rising, just at a slower pace.

But a recent article from Redfin notes,

“Price Drops Hit Highest Level in 18 Months As High Rates Dampen Buyer Demand.”

And that might make you think prices are declining.

Now, while it’s true the latest report from Realtor.com also shows 16.6% of homes on the market had price reductions in May, which is up from 12.7% last May, that doesn’t mean overall home prices are falling.

The key is knowing the difference between the asking price and the sold price.

Understanding Asking Price vs. Sold Price

In essence, the asking price, also known as a listing price, is the amount a seller hopes to get for their home when they list it. In reality, sellers can’t just put any price tag on their house and expect it to sell for top dollar. Today’s buyers are savvy customers, and when they aren’t willing to pay a premium for a home because their budgets are strained by higher mortgage rates, sellers need to adjust. And that’s what’s happening right now.

Based on market factors and what offers that seller receives, that asking price can change. If a seller isn’t getting much foot traffic, you may see them revise the price and make an adjustment to reignite interest in the home – and sometimes that’s because they’ve overpriced it from the start. That’s where price reductions come in, and when you see “price drops” in a headline, it sounds like declining home prices.

Mike Simonsen, CEO and Founder of Altos Research, says:

“Not only is the share of homes with price cuts elevated compared to one year ago, but more price cuts are happening each week than last year.”

On the other hand, the final sold price is the amount a buyer actually pays when the transaction is complete.

Here’s the most important thing to note: Actual sold prices are still rising, and they’re expected to continue to do so at least over the next 5 years.

What Does This Mean for Home Prices?

So, while there's been an increase in price reductions recently, this doesn't mean overall home values are declining. Instead, it’s a sign that demand is moderating. And, as a result, sellers are adjusting their expectations to align with today's market reality.

Even with more price reductions, home values are still growing on an annual basis, as they do nearly every year in the housing market. According to the Federal Housing Finance Agency (FHFA), home prices went up 6.6% over the last year (see below):

This map shows how prices rose just about everywhere in the country, indicating the market is not in decline.

So, while seller price reductions are often a leading indicator that prices may moderate in the months ahead, which experts have been saying for a while is expected to happen, they aren’t necessarily reason for alarm. The same article from Redfin also states:

“. . .those metrics suggest sale-price growth could soften in the coming months as persistently high mortgage rates turn off homebuyers. For now, the median-home sale price is up 4.3% year over year to another record high. . .”

And with inventory as tight as it is today, price moderation is much more likely in upcoming months than price declines.

Why This Is Good News for Buyers and Sellers

For buyers, more realistic asking prices mean a better chance of securing a home at a fair price. It also means you can enter the market with more confidence, knowing prices are stabilizing rather than continuing to skyrocket.

For sellers, understanding the need to adjust your asking price can lead to faster sales and fewer price negotiations. Setting a realistic price from the start can attract more serious buyers and lead to smoother transactions.

Bottom Line

While the uptick in price reductions might seem troubling, it’s not a cause for concern. It reflects a market adjusting to new conditions. Home prices are continuing to grow, just at a more moderate pace.

RATES:

Pricing and rates remain erratic and volatile. Confirm rates & pricing directly with your loan officer.

Check out the trivia below and remember, there is a drawing to enter to win a gift card. This is your chance to enter for a chance to win the gift card awarded every other month. This trivia question is for the May & June drawing/card.

TRIVIA QUESTION

The Tour de France Starts tomorrow… This marks the 110^th Edition of the multi stage race spread out over 23 or 24 days and covers approximately 2,200 miles. NATURALLY, our editors wanted a trivia question about the oldest and most prestigious of bike races. Simple question (or is it?) Known as the Grand Depart, what country does the Tour de France start in?

A. France

B. Switzerland

C. Spain

D. Italy

E. Portugal

Click here to EMAIL ME YOUR ANSWER.

**Email your answer to me to have your name entered in a drawing for a gift card at the beginning of odd months and YES you can go back and answer previous weeks’ questions if you have not answered them already AND if we have not unveiled the answer yet***

Have a great rest of the weekend. Stay safe out there. If you have any questions, please do not hesitate to call. You can contact me by email. Please, follow us on Facebook, Twitter, or LinkedIn. Thanks to many of you, we are continuing to expand our readership, so if you have a friend or client that you think may benefit from this newsletter, please feel free to forward it to them! If you got this from a friend, click here to sign up to receive it.