Category Archives: Uncategorized

Inside a Mortgage Guy’s Head

Since interest rates have been on everyone’s mind of late, I thought I’d share my daily missive I receive from Anthony Samadani of MetroCities Mortgages so you can see what kinds of sugar plumbs he has dancing in his head:

“Massive volatility remains the name of the game – and will likely continue.

After Bonds fell sharply lower yesterday and opened lower today, prices have now rebounded higher off Fed Chairman Ben Bernanke’s testimony before the House Budget Committee, combined with an ugly Philadelphia Fed Manufacturing Index.

A few highlights from Bernanke’s testimony – the December Jobs Report was disappointing to the Fed, and the outlook for the economy in 2008 has worsened. He indicated no recession but slow growth, as he feels that overall, the US economy remains resilient and has inherent strengths. He confirmed that additional rate cuts may be necessary while knowing that inflation is still a risk, but feels that overall headline and core inflation should moderate.

Bernanke’s “no recession” comment is very interesting, but he has been optimistic all along…perhaps a little too optimistic, as he has now been proven wrong on his thoughts about the credit markets. Additionally, Bernanke’s comments underscore the conundrum we have often framed here, in that the fight against recession is being done with a hand tied behind the Fed’s back, due to pesky inflation.

So – if you read between the lines – Bernanke’s comment of “no recession” means that upcoming Fed cuts may not be as deep as the market would like to see. Therefore some anxiety selling was created in the Stock market, which is transferring into the purchase of Bonds, helping prices improve this morning.

Also helping Bonds this morning was a downright terrible Philadelphia Fed Manufacturing Index, which was reported at -20.9 and far below expectations of -1.5. And as if that weren’t enough already, Housing Starts were reported at 1,006,000, which was lower than expectations of 1,150,000. This was the lowest number of Starts in about 16 years. Building Permits were not much better, as they fell by 8% to an annual rate of 1,070,000, their lowest number in 12 years.

While many pundits and media moguls will be quick to point to this number as evidence of further demise within the housing market – we think it is actually a very good sign. High inventory is a problem for the real estate market – so less new inventory coming on the market will be a positive for those who see the opportunity in the future.

Initial Jobless Claims, a volatile number, surprised with a better than expected report of just 301,000 filings for new unemployment benefits. This number is a bit of an enigma, after watching job growth weaken and the unemployment rate spike. Let’s keep an eye on this trend.

Amidst all the economic noise, the markets are figuring a 50bp rate cut on January 30th is in the bank. We agree. Technical signs clearly indicate that the Bond is being stretched and priced for perfection. The “leash effect” has been a very accurate indicator that prices will soon pull back towards the 25-day Moving Average, and we are close to seeing that happen. The top of the channel shown on the Bond Page has been a strong, almost impenetrable ceiling, and the Bond is clearly in an overbought state.

Because of the current price appreciation, we are floating, but with a finger on the lock trigger, as it would not surprise us to see more volatility and perhaps an afternoon reversal.”

Thanks for sharing, AJ!

Condocontessa does not endorse guest opinions.


San Francisco rents rise

I just heard this morning, on kqed radio, that Realfacts is reporting a nearly 9% increase in bay area rents.  Unfortunately, I haven’t been able to find this information on Realfacts website.  Yesterday I stopped by the Palms to see what they have left and saw a corner 1 bedroom with Twin Peaks views — when I ran the numbers the payment surprisingly came out to comparable rents in the building!  Once I find the source for this stat I’ll post it in the comments section of this post.  If one of you finds it before I do, please add it to the comments section!

5 Reasons to Buy Now in San Francisco

With all the doom and gloom headlines selling newspapers, there are some often overlooked facts that make this a good time to buy.

1.  Low interest rates; the rates dropped overnight to 5.5% for a 30 year fixed.

2.  There are more properties on the market than there have been in the last few years for buyers to choose from; it’s a buyers market, which is perfect for being a buyer.

3.   Sellers and developers have adjusted to the new market climate and are willing to make concessions.

4.   San Francisco rents are still rising.

5.  San Francisco still has a housing shortage; and we have a good jobs economy — you will be poised to cash in on the next market cycle.

November Bay Area Home Sales

 San Francisco, San Mateo and Marin see positive appreciation in year over year Median home price.

All Homes

Number Sold

Number Sold


November 2006

November 2007


Alameda 1,560 985 -36.9% $581,000 $565,000 -2.8%
Contra Costa 1,627 879 -46.0% $567,500 $528,500 -6.9%
Marin 285 206 -27.7% $847,500 $871,000 2.8%
Napa 125 81 -35.2% $599,000 $562,000 -6.2%
Santa Clara 2,028 1,317 -35.1% $673,000 $678,000 0.7%
San Francisco 568 479 -15.7% $760,000 $814,750 7.2%
San Mateo 678 504 -25.7% $749,000 $780,000 4.1%
Solano 629 313 -50.2% $441,000 $375,550 -14.8%
Sonoma 542 363 -33.0% $535,000 $470,000 -12.1%
Bay Area 8,042 5,127 -36.2% $620,000 $629,000 1.5%

Source: DataQuick Information Systems,

Is the Marina for you?

I’m experimenting with a new video posting tool … so bear with me as I upload a few clips about our wonderful neighborhoods.

Vodpod videos no longer available. from posted with vodpod

Hayes Valley Video Tour

This captures the flavor of this neighborhood perfectly!

Vodpod videos no longer available. from posted with vodpod

Get the demographics on any zip code

Skinny Get the skinny on your zip code demographics at zip skinny