The Petalumahomes.com Realty WebLog

Hello everyone I really need some help this time. As you know for about a year now our business has expanded to the sale of foreclosed homes aka “REO” properties for several major lending institutions. This has many times has led to some interesting events. In this case one the former owners was not able to keep his childrens two fish. After the lender assisted the former owner in their “cash for keys” program he was not able to take his fish with him. He only had temporary housing at this point and bringing the two fish was not possible. He asked me if I would find them a home. I agreed I would and also promised not to flush them away.  So it brings me to my current need which is a home for them. With a suggestion from the Banks REO manager we decided to appropriately name them “Wells” and “Fargo”. It seemed to fit. I must admit having them for the last 24 hours I have found to be very lovable and I think they will make a great pet for someone. So if your interested please call or email me. The toll free number is 877-750-1446 or email me at robert@petalumahomes.com. Or to see them up close click here www.youtube.com/watch?v=3dYMtNEKLfk .

Some of you know about my passion for music which began as a young kid. Well just for fun here is me with my favorite group. The “Carlos Herrera Band”. This video is just a home clip from our performance on 4th July in the Sonoma Plaza. Check it out to see what keeps me calm in all these stressful times.

From a historical perspective, we are in the midst of a brutal bear market that began on October 9th 2007. Remember that a decline of 20% constitutes a bear market…and a 10% decline is a “correction.” The last bear market occurred between March 24th of 2000 and October 9th 2002 saw a 49% drop. Overall, the average bear market lasts for 12.3 months, with the average decline being 32%. The current bear market is right in line with the average historical time frames, and the extent of the decline is worse than previous bear market averages, but still slightly better than the bottom made in 2002. So the historical data might suggest that we could be nearing a bottom. I will continue to monitor this situation closely, and let you know how this will impact home loan rates in the weeks and months ahead. One bright spot is that oil prices are also plunging, falling from a high of $147 per barrel last July to around $80 per barrel Friday morning…which at least makes a tr ip to fill up at the gas station slightly less painful.

The Congress passed and President Bush signed the $700 billion bailout last Friday.  If you haven’t gotten enough of an explanantion from CNN, CNBC & Fox the Forbes article below is a great, simplified explanation of what the bailout is and what is means to you.

Check it out:

http://www.forbes.com/2008/10/02/bailout-taxes-washington-biz-beltway-cx_lm_bw_1001bailout.html?partner=daily_newsletter

TO PASS OR NOT TO PASS? That was indeed the question of the week…and the final answer came on Friday, as the House of Representatives followed the Senate’s lead and passed the $700 Billion rescue plan.

The week began with the House initially voting against the plan on Monday, causing Stocks to plunge in their final minutes of trading to their single worst loss in the 112-year history of the Dow Jones. However, on Wednesday, the Senate passed a revised rescue plan that included some tax breaks and an increase in FDIC protection from $100,000 to $250,000. This was the version the House subsequently passed and President Bush signed into law on Friday.

Why was it important for the plan to pass? Simply put, the plan frees up some of the frozen credit that consumers and small businesses across the country need to survive. As examples, even auto loans were becoming harder for consumers to qualify for…and on the business side, many retail operations have had difficulty in financing their inventory. Credit issues like these are not good for the economy, confidence, and consumer spending, and the rescue plan was passed to help matters.

In other news from Friday, the Labor Department reported that 159,000 jobs were lost in September, which is much worse than the 105,000 lost jobs that economists were expecting. So far in 2008, we have lost 760,000 jobs. And while Bonds and home loan rates would have typically improved on this weak economic news (remember weak economic news usually causes money to flow from Stocks into Bonds, helping home loan rates improve), talk that the Fed and other Central Banks around the world may start cutting their benchmark rates kept Bonds and home loan rates from making a big improvement. Remember, a cut in the Fed Funds Rate is inflationary, and therefore bad for Bonds and home loan rates.

Forecast for the week