Computer Meltdown

Just a quick post to let you all know that my main computer is not healthy but I think I finally figured out what was wrong (bad video card). I hope to fight the shopping crowds tomorrow and find a new one unless I’m under warranty with Dell. What has been adding to the complexity of troubleshooting the problem was that I also tried updating to Windows 7 early this week (the update failed). I knew I should have waited on that but I say that everytime I try to do anything with Windows.

I hope to be back in my daily blogs once I’ve got everything working again.

Rate Update and The Falling Dollar

Inflation was on the hot seat this week, making up the only eventful economic data and Fed Chief Ben Bernake’s speech addressing the value of the dollar. The Producer Price Index came in less inflationary for October, and core prices saw the largest decline since July 2006. The Consumer Price Index was up slightly higher than expectations due to higher energy costs. However, core consumer prices were up a tame 1.7% compared to one year ago. Bernake started the week by addressing the Economic Club of New York, assuring investors the Fed is closely watching exchange rates, and that the current dollar weakness was no cause for alarm. Bernake did not anticipate a need to raise interest rates prematurely, reminding investors of continued high unemployment levels and a fragile economy surviving on government stimulus. Currently the 30 Year Fixed sits at 4.500% (4.679% APR) and the 15 Year Fixed is at 4.125% (4.432% APR). Thanksgiving week is full of economic data, including GDP, New and Existing Home Sales, Consumer Confidence and the Fed is auctioning $118 billion of 2, 5 and 7-year notes.

The falling dollar could put upward pressure on mortgage rates in the future. Foreign investors historically have been a large buyer of US debt, including mortgage-backed securities (MBS). Today, about half of all US Treasury debt, and approximately 17% of MBS, is held by foreigners. China dominates the non-US interests with almost $800 billion of all US Treasury debt, or 10%. When the dollar falls, the value of US assets to foreign investors declines, making US investments less rewarding. The Fed is currently scaling back its MBS purchases, currently at $16-$18 billion a week, with most expecting the program to conclude sometime near the end of the first quarter 2010. A drop in foreign demand would further pressure yields higher to attract investors. The outlook is even darker if foreign investors begin to sell US Treasury debt and MBS into an already saturated market.

Central Coast Lending, Inc.
(805) 771-9870

Upcoming Events

Some interesting events coming up a bit South of SLO County….

The Motor City Madman himself, Ted Nugent, is scheduled to play at the Chumash Casino on January 22nd. Tickets go on sale December 8th. If you know someone that is a Nugent fan, seeing him at the Chumash would be a great Xmas present.

Then on March 5th, Cheech and Chong appear at the Arlington Theater in Santa Barbara. Tickets went on sale Friday and are available here.

Wineman Hotel in SLO has a New Sign

The Wineman Hotel in downtown San Luis Obispo recently got a new neon sign. The Wineman has been undergoing a remodel and it looks like it’s almost done. There will be 2 levels of studio apartments with retail on the ground floor. A Chipotle is one of the businesses that is supposed to go in. I took the above photo tonite at the end of Farmers Market when the vendors had left but the streets were still closed.

In April of 1999, I happened to be in downtown SLO with my digital camera. There had been a windy storm and the old Wineman sign was starting to fall. They closed off Higuera and Chorro to remove it. As you see by the first photo below, there was plenty of onlookers. In the bottom photo, some clueless person walked through the police tape and stopped RIGHT UNDER THE SIGN. People started yelling at him telling to get out of there quick! Looks like he might have been on the phone.

(click thumbnails to see larger photos)

Morro Bay Dredging Underway

(submitted by one of our North Coast experts)

The Maintenance Dredging of the Morro Bay Harbor is now underway.

In order to maintain the Morro Bay harbor for safe passage of large hulled boats, the harbor entrance water depths needs to be maintained at 30-40 feet.

The rock and sand that is being dredged up is then water powered up the beach in these large pipes, where it will be distributed on the strand, North of the rock, and used to re-build the beach.

There may be a bit of a stale beach smell for a bit- but it will pass- and it is not considered toxic or harmful- just stinky.

$3,000,000 of this project was approved by the American Recovery & Reinvestment Act of 2009.

Black Friday Ads

We’re a little over a week from Black Friday, the big shopping day after Thanksgiving. The sales that some stores are going to have are starting to pop up on the Internet. This site has some of the ads. Wonder which of these bargains are going to get people to camp out overnight at Best Buy this year?

See Canyon Apple Season Coming to an End

My wife and I took a trip to the Gopher Glen apple farm in See Canyon on Saturday. We picked up some yummy Fuji and another type of apple I can’t remember the name of right now. Gopher Glen is open until the end of this month.

We also stopped by the Avila Barn on the way back home. We usually don’t stop here because it usually is packed with tourists. Boy, is this place doing well. They’ve expanded since the last time we were there and have lots of different things. The only thing we ended up buying was some roasted corn which was really good.

Check it out if you are driving down 101 and have time for a quick side trip. It’s only a minute from the freeway. Take the second Avila Beach exit if you’re coming South, go past the swimming pool/campground and you’re there!

New Paso Robles Listing

Our latest Premier Listing is a condo in Paso Robles. If you’re looking for community living, this property is for you. It’s in the Oak Creek Commons which is a cohousing community complex. There’s a lot of neat things that go along with this condo including…a pool/spa, fenced dog park, 10 acres of open space, walking trails, a 4,000 sq ft community room/kitchen, woodshop, and more!

See details, photos, and high definition video at

Rate Update and The 10-Year Note Yield

Despite very little in the way of economic news, there was a nice rally in both stocks and bonds last week, leading to slightly better mortgage rates. President Obama signed into law an expanded Homebuyer Tax Credit bill, which extended the deadlines for first-time buyers and added a new $6500 credit for experienced homeowners. Fannie Mae and Freddie Mac also announced the extension of the high-cost loan limits (up to $687,500 in SLO County) through 2010, which offers some relief for borrowers with higher balance loans while traditional jumbo markets remain dormant. Currently, the 30-Year Fixed sits at 4.500% (4.679% APR) and the 15-Year Fixed is at 4.250% (4.557% APR). This week, we will see the latest inflation data in the form of Producer Price Index, Consumer Price Index and Retail Sales.

The 10-Year Treasury Note yield is often referred to as the benchmark indicator for mortgage interest rates, as its term most closely matches the duration of mortgage-backed securities (MBS). Historically, the 30-Year Fixed mortgage interest rate has been 177 basis points over the 10-Year Treasury Note yield. For example, if the 10-Year yield is at 3.250%, then the 30-Year Fixed mortgage is expected to be at 5.020%. In today’s turbulent market conditions, mortgage rates are experiencing a disconnect from the traditional market indicators.

In November 2008, the 10-Year Note yield averaged 3.530% and the 30-Year Fixed mortgage rate averaged 6.200% – a difference of 267 basis points! The significantly higher spread indicated the demand side of the MBS market was weak, and it was critical that the Federal Reserve act swiftly and appropriately to support the mortgage and housing markets and to improve conditions in financial markets. Accordingly, the Fed created a program to buy MBS. To date, the Fed has been a net buyer of $1 trillion worth of MBS since its first purchase in January 2009. Under the MBS purchase program, the Fed will purchase $1.25 trillion backed by Fannie Mae, Freddie Mac and Ginnie Mae.

Today, the 10-Year Note yield is down to 3.330% and the 30-Year Fixed mortgage rate is at 4.500% – a spread of only 117 basis points! The Fed’s purchase program, due to expire at the end of the first quarter 2010, has undoubtedly propped up the battered markets. The big concern is if market conditions will be restored to normal, attracting more traditional buyers of MBS before the Fed program expires. We certainly hope so, but many experts believe mortgage rates are likely to jump up by 1% to 1.5% overnight.

Central Coast Lending, Inc.
(805) 771-9870

Lockbox Goes Wireless

The company that makes the lockboxes that we use here on the Central Coast just announced their new wireless lockbox. This box paired with a base unit that sits in the home will allow things like motion detection of unauthorized visitors and the ability to automatically turn lights on/off for showings using X10 switches.

The lockboxes will be available at the beginning of next year from the vendor but don’t know if our local Realtor Associations are going to support this new lockbox.