Real Estate Outlook: Freddie Mac Predicts Positive Recoveryby Kenneth R. Harney

Could we be heading for a "double dip" in the economy, taking us back into recession, as some Wall Street analysts predict? Could the Federal Reserve's planned departure from the mortgage securities market send home loan rates spiking upward, and knock the wind out of the housing recovery? Those are scary questions.
But last week one of the country's most accurate economic and housing forecasters came out with projections for the balance of the year that basically said: None of that scary stuff is going to happen.
Frank Nothaft, chief economist for mortgage investor Freddie Mac, sees what he calls "a very steady, quarter to quarter growth" pattern ahead, with no "double-dip" mini-recession hurting real estate, and only minor increases in interest rates.
Notehalf's econometric models point to expansion of the U.S. economy in the 3.3 to 3.5 percent range, as measured by the Gross Domestic Product (or GDP) through 2011. In economic terms, that's sort of a "not too hot, not too cold" scenario that helps keep interest rates low and inflation under control.
Nothaft forecasts average 30-year mortgage rates around 5.6 percent by the end of the year - up from today's rates but still in historically low territory and not high enough to seriously constrain housing demand or sales.
In fact, Nothaft expects total housing sales - that's existing resales plus sales of newly constructed homes -- to be at a nearly 6 million annual rate by the end of 2010, and even higher in 2011.
One sobering area in his projections, however, is prices. On a national average basic, his models point to a pattern of relatively flat prices for the coming year as the result of continuing high foreclosures, short sales and other distress situations in parts of central California, Nevada, Arizona and Florida.
But Nothaft emphasized in an interview with Realty Times last week that "the national numbers tend to obscure what's happening in regional and local markets" that are not heavily burdened with distress sales, and where underlying economic demand already is producing higher prices and multiple bids on homes for sales.
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We here on the coast are seeing things stabilize. Inventory is down, prices are holding. In Santa Clara county the higher end is beginning to move and we tend to follow them by a number of months. The worst seems to be behind us and if Bloom Energy or Bright Source takes off, go team! The big engine in the Silicon Valley will be roaring again.

The 4 Things You Need To Buy and 2 You Don't

Are You Ready to Buy a House?
Four Things you need to buy a home, and two things you don't
By frontdoor.com Published: 11/01/2007
Sure, owning your own home is the American dream. It's also the largest investment most of us will ever make, so go into it knowing what you'll need when you go from tenant to owner -- and what you won't need.
Here's what you'll need:
1. Enough money to make monthly mortgage payments. Duh! If a mortgage payment will bust your budget, you can't get rid of your landlord yet. Use our mortgage calculator to estimate your monthly payment.
2. Enough income to pay property taxes and homeowner's insurance. The mortgage isn't the only cost you'll have each month. You also have to pay taxes and insurance. If you can't make those payments, say bye-bye to the house.
3. The ability to maintain the property.You must keep a home in good repair or it will lose its value and you'll lose money. You can do the work yourself or pay someone to do it. Either way, you can't ignore the peeling paint and the window that won't close like you did when you were a tenant.
4. A decent credit record. If you have lots of late payments, have declared bankruptcy or left old debts unpaid, it's harder to get a mortgage. And if you do get one, your bad credit record will make you pay a much higher interest rate.
Here's what you won't need:
1. A big down payment.It's best to make a big fat down payment so you can skip paying private mortgage insurance and lower your monthly payments, but you can buy a house for almost nothing down.
2. ExperienceIn most major cities, real estate companies hold home-buyer education classes for first-timers. Go, even if you have no immediate plans to buy. The information you get can lead you to other sources of help. And of course, we'll help you right here on FrontDoor.com Real Estate.
Courtesy of Frontdoor by HGTV