Click Below to See How
Much You Can Save Based on Where You Decide to
Purchase Your Next Home!!!!

Welcome to HouseHangout!

Specializing in Relocation, Move Up
and First Time Home Buyers

Find Homes in Scottsdale, Rio Verde Foothills, North Phoenix, Fountain Hills,
Paradise Valley, Carefree, and Cave Creek

Phoenix/Scottsdale FHA Loans Tighten in 2010!!!!

Phoenix Mortgage Update - 2010 Outlook!

 
_{^{Phoenix/Scottsdale Mortgage Report and Rate Update...}}

August 28, 2010       

Good evening,

As many of you know (from the photos), we experienced quite a storm (microburst) in the 85254 zip code-area this past Tuesday that led to our kids’ 500-pound trampoline taking flight and landing in our neighbor’s swimming pool (2 houses down)… Thankfully, none of the kids were in the trampoline (all five were inside, safe and sound), no one was injured, and none of us experienced any major damage to our property from our “flying-trampoline” (other then our American flag being ripped off the front of the house and our basketball hoop falling over in the drive-way)…

I am very grateful and thankful for all of this… Why? Well, I was blessed that my wife and children arrived home from piano lessons and the orthodontist moments before this violent storm touched ground… Both of my neighbors were so nonchalant (chuckling) and understanding about the entire ordeal (I think I need to read that book, Don’t Sweat the Small Stuff, and/or learn from their example)… My next-door neighbor’s turtle-flower-pot did get destroyed, though and our kids did nickname it “Crush”… Time to head over to the landscape/pottery center…

How would you react to a trampoline rolling across your backyard, or better yet, ending up in your pool?? The basketball backboard (Plexiglas) didn’t break or shatter and missed the garage door by less than two feet… Dad (me) made it to the polling box and home safely after the storm… Our American flag is waving once again in front of our home (thank goodness for nylon American flags on swivel banisters and thank goodness for God’s hedge of protection around us, our family and our neighbors!

As I drove home that Tuesday evening, I saw more neighbors out than halloween evening, assessing the damage (I saw more than 20 large trees uprooted and laying on the ground)…

We had a successful recon-mission on Wednesday, as we disassembled the trampoline and transported all back (in 15 pieces) to our backyard… (Photos to follow…) Thanks for your continued business and referrals ~ Rob

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Here is some good info on microbursts for future reference:

A microburst is a very localized column of sinking air, producing damaging divergent and straight-line winds at the surface that are similar to, but distinguishable from, tornadoes which generally have convergent damage. There are two types of microbursts: wet microbursts and dry microbursts. They go through three stages in their life cycle: the downburst, outburst, and cushion stages. The scale and suddenness of a microburst makes it a great danger to aircraft due to the low-level wind shear caused by its gust front, with several fatal crashes having been attributed to the phenomenon over the past several decades.

A microburst often has high winds that can knock over fully grown trees. They usually last for a couple of seconds.

The term was defined by senior weather expert Tetsuya Theodore Fujita as affecting an area 4 km (2.5 mi) in diameter or less, distinguishing them as a type of downburst and apart from common windshear which can encompass greater areas. Fujita also coined the term macroburst for downbursts larger than 4 km (2.5 mi), a scale of size known as the mesoscale.

A distinction can be made between a wet microburst which consists of precipitation and a dry microburst which consists of virga They generally are formed by precipitation-cooled air rushing to the surface, but they perhaps also could be powered from the high speed winds of the jet stream deflected to the surface in a thunderstorm (see downburst).

Microbursts are recognized as capable of generating wind speeds higher than 75 m/s (168 mph; 270 km/h).

Dry microbursts

When rain falls below cloud base or is mixed with dry air, it begins to evaporate and this evaporation process cools the air. The cool air descends and accelerates as it approaches the ground. When the cool air approaches the ground, it spreads out in all directions and this divergence of the wind is the signature of the microburst. High winds spread out in this type of pattern showing little or no curvature are known as straight-line winds.

Dry microbursts, produced by high based thunderstorms that generate little surface rainfall, occur in environments characterized by a thermodynamic profile exhibiting an inverted-V at thermal and moisture profile, as viewed on a Skew-T log-P thermodynamic diagram. (Wakimoto, 1985) developed a conceptual model (over the High Plains of the United States) of a dry microburst environment that comprised three important variables: mid-level moisture, a deep and dry adiabatic lapse rate in the sub-cloud layer, and low surface relative humidity.

Wet microbursts

Wet microbursts are downbursts accompanied by significant precipitation at the surface which are warmer than their environment (Wakimoto, 1998).^[5] These downbursts rely more on the drag of precipitation for downward acceleration of parcels than negative buoyancy which tend to drive "dry" microbursts. As a result, higher mixing ratios are necessary for these downbursts to form (hence the name "wet" microbursts). Melting of ice, particularly hail, appears to play an important role in downburst formation (Wakimoto and Bringi, 1988), especially in the lowest one kilometer above ground level (Proctor, 1989). These factors, among others, make forecasting wet microbursts a difficult task.

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------

August 27, 2010 -- Economic growth has weakened to the point where we now have 1.6% GDP readings as bookends to the year-old recovery. After the deep recession, any positive growth readings are of course welcome, but the very muted pace of growth in the second quarter of 2010 isn't warm enough to feel much different than the recession did.

Addressing the audience at the annual Economic Symposium in Jackson Hole, Wyoming, Federal Reserve Chair Ben Bernanke detailed the Fed's disappointment with the present rate of growth, and stock markets were cheered that he took pains to express both optimism for the coming year and that the Fed still has tools it can employ to ward off deflation or even a double-dip recession. Frankly, what else could he say?

Just as 1.6% growth is insufficient to produce much economic heat; cheap mortgage rates alone are insufficient to produce recovery in the housing market.

The second quarter GDP rate represents a considerable deceleration from the 5% rate seen during Q409, when optimism was growing and job losses fading. That boost lasted though the winter, but turned into a 3.7% rate in the 1st quarter, and now has again settled back again. The decline in the economy has been tracked by the Chicago Federal Reserve's National Activity Index, which sported a -0.7 figure in June, the end of the second quarter. However, the most recent report, covering July, found an improvement to a flat 0.0 figure, indicating that the economy likely returned closer to its natural annual growth rate of perhaps 2.7% or so. Of course, July's meager improvement was just the first month of the third quarter, and unfortunately, more recent data hasn't been very good.

Along with the broad economic slowdown, the hangover from the homebuyer tax credit "party" has become increasingly apparent. Arguments about its benefits or drawbacks aside, there can be no doubt that the credit has produced distortion in the housing market. The advancement of already weak demand into the spring of this year created a minor peak of sorts, and we are now deep into the valley on the other side, with (hopefully) no place to go but up in the coming months. Given the summer economic swoon and a lack of job growth needed to foment demand, a rebound will probably come later rather than sooner.

Existing Home Sales dropped by a shocking 27.2% in July, landing at a pace far weaker than expected. The 3.83 million annualized pace was the worst reading of either the recession or the recovery. Meanwhile, the slump in demand means that available supply ballooned up to 12.5 months, a level certain to put renewed downward pressure on home prices. Given the size of the drop from June's 5.26m rate, there is some hope that next month will bring an upward revision, but even if it does, home-buying has come to a virtual standstill.

New Home Sales told much the same tale. In July, an annualized sales rate of 276,000 units was revealed, the lowest in the 46-year history of the series. Worse, downward revisions to the last couple of months make the picture even bleaker, with May's already-pathetic showing ratcheted down to only 281K. There are still some 210,000 units built and ready to be sold on the market, probably the most difficult to sell units far from city centers and amenities, but it is quite clear that there is not enough demand to warrant any optimism among builders (or any economic boost from homebuilding) at this point.

There is perhaps a little irony in that among the worst housing markets in memory comes what might be the best refinancing opportunity ever... provided you can make it over the hurdles needed to access today's fantastic mortgage rates. Unfortunately, too few borrowers can, and while refinancing activity has picked up to a fair degree, the aggregate amount of activity so far is small relative to other refi booms and boomlets. With about 11 million borrowers underwater to some degree, there are a lot of people who might wish to refinance but cannot, and probably many millions more who lack the steady income needed to qualify.

Next week is chock full of both last-of-the-month and first-of-the-month economic reports. The minutes from the last FOMC meeting should be interesting, and the ISM manufacturing and employment report revealing. Based on Mr. Bernanke's remarks, stocks put in a good day on Friday, and mortgage rates steadied, which is what we expect for next week.