Interest rates…everybody wants to know where they are headed. Here’s what’s coming out this week that will definitely have an impact.

The Fed’s Beige Book – officially known as the Survey on Current Economic Conditions will be reported on Wednesday. It shows info from banks, interviews with business contacts, economists, market experts, and other sources. The Beige Book is thought by some to be looking in the rearview mirror too much, but it can serve as a future indicator of the Fed’s policy decisions.

This Thursday, the Initial Jobless Claims report will be released. Last week, the number filing for jobless benefits fell, even though it was still higher then previous estimates. Markets will be watching to see if this report hits expectations of approximately 556,000 new claims.

Also on Thursday, the Balance of Trade for July will be reported. The expectations are that the trade deficit will come in the same as the previous month when it widened to $27 Billion. A negative balance of trade (deficit) occurs when imports surpass exports. The United States trade balance has been in a deficit since the mid 1970’s.

Lastly, on Friday, the Preliminary Consumer Sentiment Index will come out. This is a survey conducted by the University of Michigan and measures consumer attitudes regarding the present and future economic conditions.

The biggest factor this week is treasury auctions as the release and sale of Government Bonds can affect Mortgage Bonds, which can alter our interest rates. It’s good to keep your eye on Treasuries and stocks this week as an excellent indicator of what rates will do.

As always, many thanks to Paul Soule, a Senior Mortgage Advisor with Coldwell Banker Home Loans.

Ocean City, Md. View of Condos

The Ocean City condo market is improving as reported by the Coastal Association of REALTORS Multiple Listing Service. New contracts written were up 33% in June 2009 as compared to June 2008. The year date figures reflect an overall increase of 9%.

Properties that settled or closed in June 2009 were up 19.2% as compared to the same time last year.  We are noticing a definite increase in overall traffic and sales activity. I will continue to follow and report these trends to you.

The “Housing Report” also breaks down the inventory trends, and the market by price ranges.

Currently in our market (Ocean City, Maryland and Worcester County), there are 78 pending “short sale” transactions as reported to our local Multiple Listing Service.  I have 2 short sale situations that have been pending since 3/30/09 and 4/1/09 respectfully, with no response back from either lender.

Is the time it is taking to process short sales hampering our market rebound?

My answer is…without question!

Consider the following data

*In 2008 a total of 1167 properties changed hands thru our Ocean City/Worcester MLS.

*At present, we are 10-15% behind where we were at this same point last year.

*The 78 pending short sale situations will account for about 10% of the total sales for this year.

*That does not account for any future short sales that go under contract between now and the end of the year, all waiting for lender approval.

I am not even considering the many buyers who have walked away from their potential short sale purchase because they got fed up with waiting so long.

It seems there should be a way to streamline the process for lenders.  All lenders should be using the same forms, same process, etc.  What about a “clearing house” for all lenders nationwide to process these loans?  One of my short sale sellers said the reviewer for her case has 300+ cases to review!

I have heard many different dollar amounts (anywhere from $5,000 to $15,000) that flow into the system from the sale of a property.  Multiply that number by the huge amount of short sales waiting to get processed…and we could very possibly see a rebound in the housing sector.

If real estate contributed to the situation we are in…maybe real estate can get us out!!!