Archive for August, 2009
Specifically, Utah County. Our latest batch of appraisals in the Utah County area have come in about 10% lower than projected. Since we run all of our appraisals through the best AMC on earth, 1st Choice AMS, we know these are not appraiser-specific values. These are across the board, almost all properties, all appraisers and all loan types.
This is a warning for those of you that do business in Utah County. Expect your values to be low. We have not noted this problem in Salt Lake County, so at the moment we think it’s a phenomenon restricted to Utah County and southern environs.
Here’s our take on why this is: everyone knows that the $8000 first-time homebuyer credit is expiring in 90 days. In Utah County, with its two large universities spewing forth about 10,000 graduates a year, there is an abnormally large population of first-time homebuyers. That means that for the next little bit, that cohort, being especially active, is going to have disproportionate impact on home values. When shopping for the thousands of properties out there, which is going to be most attractive to you: $198,000 or $204,000? It’s human nature. If the houses are even reasonably similar, the lower price is going to win, but here you also have the famous $1.99 effect working against you.
One of our most recent appraisals reaffirms this rather directly. The house appraised for $203,000. There were two comps in the low $200k range, each had been on the market for 300 days or longer. There were 2 comps in the high $190k range, and their time on market was 42 days and SEVEN days. The stuff that’s selling, people, is the stuff right under the K, at $295k and $195k, so if your house wants to appraise at $310k or at $210k, you might find that you’re in trouble.
Just a word to the wise.
Market: We’re flat, as in 0bps movement, so far today. We’ve been trading in a narrow range, with a push to the upside on bonds (down on rates) for a few days now. I find this exceedingly odd, and will attempt to explain why. Rates continue 5.25% or thereabouts on the 30-year, lower (and MUCH lower sometimes) on ARMs, which yes, are still out there and making good sense for many.
Analysis: This is a tough market to read. We are sitting right on the 100-day moving average (and the 200-day moving average). For weeks, every time we touched that line, we retreated strongly. Any news, even bad news, was interpreted in the most positive possible light, and bonds sold off. The stock market is strongly up since March, and though bonds have not fallen by the same amount, the general consensus (here, too) has been that rates were trying to rise and that it was only a matter of time before we saw 6% and higher again.
Well, now I’m not so sure. This is very odd behavior for the market. The last couple days there has been some decent economic news, home sales higher, Case-Schiller index higher in 95% of the measured markets, consumer confidence much higher than expected, durable goods orders higher (but with embedded weakness), and ordinarily this would mean a selloff in bonds, especially as we’re right at the top of a trading range. And yet, and yet. We even had a huge 5-year treasury auction yesterday, but the bond market actually ROSE following that auction.
So here’s my interpretation at the moment: I think there is a nagging suspicion in the market that there is some really, really negative news coming. I think there’s a fear that this summer was irrationally exuberant in terms of calling an end to the recession. I think that means that we’re going to hang out right here on interest rates until at least the $8000 first-time homebuyer credit goes away (loans must be CLOSED by November 30).
That’s my read. I could be wrong. I’m holding out at least a 25% chance that there could be a big move down in rates before the end of the year. I also wouldn’t be surprised to see a large move upward. But if I were betting, and hey, that’s kind of what I do here every day, I’d bet on holding right here.
P.S. For you duplex buyer mortgage shoppers, just wanted to say that you’ll need to be in underwriting (for conventional financing) by Monday unless you want to put 20% down. 80% becomes the loan limit on all duplexes as of Tuesday Sept 1. Just a word to the wise.
First, riffing off my disturbing dentist/social media experience from yesterday, which, despite the fact that it seems to me to be an almost surreal event that is ripe for some serious deconstruction by Olivier Blanchard, Amber “Cadabra” Naslund, Beth Harte and other people almost as smart, nobody has commented on, I had a terrific experience at Thanksgiving Point Dental yesterday, thanks very much, and I’m quite sure nobody will sue me for mentioning it here on my blog. Unlike some others would have, but you’ll just have to read that last post to understand this, won’t you?
Second, I was going to write something pithy about the Reverse Twitter Effect in movies, or maybe about healthcare and why “death panels” are almost inevitable, no matter what the President says, or even about how curious I am to see what effect the Four-hour Workweek has on my life, but then I ran across this post on Cougarboard and realized that it was much, much better than anything I could write today, so here you go instead.
Last week sometime I broke a tooth. One of the back ones on the right, a raspberry seed got caught in just the wrong place, and that tooth was apparently weak from the fillings anyway, so it broke off and now pieces of the filling are coming with it. Anyway. It’s all very boring.
Up until this last month, I’d have called my Uncle David, who is going straight to the Kingdom of God for all the fantastic work he’s done on my teeth, and my family’s teeth, for the last 20 years. Seriously, the man has given me $50,000 of dental care and never charged me a thin dime. But he retired, sold his practice, and the fellows that have taken over are in some sort of giant legal battle over the practice, so all in all that’s not really the place I want to take my teeth, even if it were right down the road, which it is decidedly not.
So I’m looking for a new dentist. There are a couple in town. One of them, Stonehaven Dental, sent me a “new client” ad, where they were offering a free exam and full x-rays for nothing for first-timers. Perfect timing, I thought, and scheduled an appointment for this morning.
Now, over the last few weeks, my wife and son and I have been listening to Blink, by Malcolm Gladwell, and although we aren’t blown away by it, there are some very interesting ideas in that book. The premise of it is that we all make snap judgments about things, people, events, what have you, and that those snap judgments are not to be ignored. There is value in them. That value has to be tempered, but there is value there. You should listen to your intuition.
I walked into Stonehaven Dental and my Spidey-sense went off.
I can’t explain this. I make snap judgments all the time, like everyone, and I follow my hunches probably more than most, but this is the first time I can remember where I walked into someplace – remember, this is someplace that I need to go and that is going to give me free stuff and fix a problem I have – and I immediately thought “I’m not going to like this place”, and here is the kicker – I absolutely knew that I was having a “Blink” moment. This has never happened to me before.
So right away I’m going into damage control mode to see if I’m nuts. I’m watching the staff. I have to wait a second, not very long, say, less than a minute, before one of the staff comes over from the bank of headset-wearing phone jockeys and asks if I am there for an appointment. I tell her that I am, and she finds me in the computer and hands me a clipboard so they can get a bunch of info from me. Standard. She seemed perfectly nice, although I could tell we weren’t going to be friends right off.
I watched the flow of patients, some in, some out. Nobody seemed upset or rushed or anything. It was all perfectly normal. The waiting area was nice. The seats were comfortable. There weren’t loads of people stacked up. The staff at the reception area smiled and seemed to be very personable. I filled out my info and handed it back.
A couple minutes later, one of the receptionists called me back up, and had another sheet for me to fill out, this one for all the medical data, you know, are you fat, do you have allergies, are you HIV positive, that sort of thing. Standard. Short, even. I was liking these forms. And I kept telling myself that this was just dentist jitters and to forget about it and everything would be fine.
But I don’t have dentist jitters. My dentist for 20 years has been my mother’s little brother. I love that man. I’d take a bullet for him. I LIKE going to the dentist. This feeling made no sense.
Then I flipped the medical form over and there was a long page of (very poorly-paragraphed) text headlined “Mutual Privacy Agreement” or some such. The first couple inches was about how HIPAA requires certain privacy precautions, and that this dentist exceeded those paltry restrictions in every possible way. Fine, I thought, even a bit laudatory. I picked up my pen and got ready to sign, because, really, who reads this crap anyway? But I’m practicing my speed reading, so I thought what the heck, I’m just sitting here.
And then I read the center three inches, which essentially said that if I signed this agreement I gave up the right to comment, in any way, in any forum, no matter how complimentary I was, about Stonehaven Dental, its procedures, practices, dentists, hygienists, receptionists, bill collectors, decor, carpet choices, avant-garde bottle decorations and aggressively dental aroma. I would also use all possible means to prevent anyone I knew from commenting. This means blog posts, newspaper articles, comments on web pages, anything. You sign this form, you sit in the chair, and whatever happens to you, you say nothing to anyone in any public forum.
I sat there poleaxed, trying to figure out what on earth that bit of pseudo-legalese was doing in a dental office. Or any office. Oh, and it’s not just while you’re being treated. The gag order extends for FIVE YEARS after the last treatment date. I’ve never seen a form like that, ever, anywhere. I can’t imagine such a form in my office.
I sat there, running my tongue over the shards of tooth at the back of my mouth, thinking, but, surely, this doesn’t apply to me. I’m a blogger. I write about everything. Heck, I publish the complaints people make about my work, the things people don’t like about me, I mean, I have no dirty laundry anywhere that hasn’t been forensically examined by half the world. I can’t imagine NOT writing about going to the dentist, a new dentist, and what my experience was like there.
But what if it does apply? I need the dental work. I don’t have insurance. I have to get my work done very cheaply, or I have to suffer. I won’t borrow money for this treatment, or any treatment, no matter what it is. Here are some people that are willing to do the work for me and charge me nothing, and I need the work done, and what’s the big deal, anyway? Nobody reads my blog. Nobody cares much what I say. Just sign the form, Ray.
So I stood up, walked over to the desk, leaned on it in my “now, pardner, can’t we have us a chat, here” way, and said, with a hint of apology, “I won’t sign this form.” She said, with a smile, but without a flicker of hesitation, “you won’t sign the form?” I repeated, “I won’t sign the form.” Her smile got bigger, and she said “thank you very much,” in a way that added, unspoken, but with crystalline clarity, “then you can go now.” No discussion. No argument. No “what about this form is causing you difficulty?” Just “thanks, and buh-bye.”
So I buh-byed, and now I’m at home, calling through the other dentists that are part of the Lehi Area Chamber of Commerce, trying to find one that has such a new-patient discount. And guess what? None of them do. Curious. One of them, though, will get me in this afternoon, and you better believe I’ll be blogging about that experience as well here, shortly.
Perhaps I’m overreacting to this. I have to repeat this explicitly: I cannot see anything at all wrong with Stonehaven Dental. I was not treated poorly, if a little cavalierly, and the staff was efficient and polite, the place smelled thickly of clean dentistry, and I am perfectly prepared to believe that nothing but the finest service is ever provided there. Of course, if it were not so, how would you know? There are two inches of precise legal threat at the bottom of that form.
I can’t sign away my First Amendment rights to get a free x-ray. I just can’t do it. I don’t want to do it. I don’t think I should have to do it. I wonder aloud, for all the world to see, what exactly Stonehaven Dental is trying to hide with that form. I wouldn’t sign that form if I were being granted an audience with the Pope.
So this new and somewhat needy client, with his eight children and relatively large group of local friends, is going to Thanksgiving Point Dental instead. Where, Bab informs me in a somewhat bewildered tone, I will not have any such form to sign. Nobody there has ever heard of such a thing.
Is anyone else as confused about this as I am?
Markets: Nothing much happening for the last few days. Up a bit, down a bit, with the general trend toward up. Rates still hanging out in the 5.25-5.375% range.
Analysis: It’s the end of summer, and nobody is home. There is a lot of data coming out tomorrow, and there will be especial attention paid to existing home sales and initial claims. Mortgage shoppers, watch for that data to be better than expected, and for rates to move higher on very weak volume. Next week most traders will be back at their desks, but the real long haul of the final third of the year won’t start until after Labor Day.
Only 126 shopping days left until Christmas. Just FYI.