Oil Companies are still hangin in there!

While our Economy is in a recession and struggling, it sure is nice to see that the Oil companies are keeping their head above water! We have company after company posting enormous losses and slashing jobs. Consumers are cutting back and shopping at more discount stores. All while BIG OIL is swimming in their record profits! More earnings came out today and they were astonishing.
BP earned $7.62 BILLION for the quarter. Royal Dutch Shell earned $9.08 BILLION for the same quarter! Yes that is Billion with a capital "B"! While this is nothing new (they have posted successive billion dollar quarters for quite some time) it is still extremely frustrating. I am all for companies prospering and doing well, but this is a bit extreme when the American public is struggling to pay for gas! (let alone their mortgage)

What is really interesting is that their production either stalled or was down. Even with this being down they had record profits! Hmmm?
This may be because BP sold its gas for 52% more than it did a year earlier, while Shell received 66% more.

This is a very complex issue and it isn't as simple as lowering gas prices, but something needs to be done. There are some very smart people working on Wall Street, the Government, BIG OIL, etc. I think they can put their heads together to try and regulate all of this a bit more efficiently!

Now we have all the stimulus money coming our way. I wonder how much of this money will make its way back to BIG OIL. It is safe to say quite a bit of it will!

You comments are welcomed!

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What Will The Fed Do?

The Federal Reserve Board will meet again tomorrow morning. Ben Bernanke and his staff of professionals will weigh all options on both the current economic conditions and future "forecast" market conditions and whether or not to leave rates unchanged or perhaps a .25-.50% cut. Currently the market has a cut of .25% "baked in" to the current market; however there are many "seasoned" professionals that are suggesting no rate cut is needed. In fact a couple of Mr. Bernanke's colleague's were veryblunt that no further rate cuts were either needed or warranted given the current state of inflation, mostly linked to the escalation of commodity prices such as fuel and food costs; both of which have increased dramatically in recent months.

Most recently the Fed had hinted that it would take a more conservative approach to monetary policy however stated that it will do what it must to make sure financial markets function on a normal level going forward. Keep in mind should the Fed decide to cut rates these cuts do not directly impact mortgage rates! More over it's the role in these particular cuts on the overall macro economic economy that will determine the future of mortgage rates and more specifically the "flight to quality" for MBS (Mortgage Backed Security) traders that WILL determine the future of mortgage rates.

We have yet to see a significant refinancing boom in quite some time especially given the current economic climate. I believe this is due to the tightening of lending guidelines and the huge volatility in mortgage rates right now.

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New Home Sales

A report came out yesterday that New Home Sales plunged 8.5% to a 17 year low in March. (nationally) This comes at a time where home builders have slashed their average price by a record amount (13.3% in the last year)! Some other stats to mention are as follows. New home sales are down 36.6% compared to a year ago. This month's supply is the highest in 27 years!
Doesn't sound too hot does it? While it is obvious that the economy is struggling and real estate markets in certain regions of the country are hurting, Boone County is holding pretty steady! We haven't experienced the crazy appreciation that many parts of the county have, therefore we aren't experiencing the rapid depreciation! Yes, some pullback has occurred and this is only a natural correction that must happen every now and then. If you have been reading our blog and following the Columbia market, you know we have been talking about how things have been picking up! Builders and lenders have pulled back on new projects, but the good ones are still doing business and producing quality homes and developments.
In summary, feel free to read the headlines to stay informed about what is going on nationally. It is always a good idea to know these things and this is why we blog about them. However, do your homework about the market you are in. If you are in Columbia, there is no need to panic about these headlines. We are not in the same shape the other regions are in and it is a great time to snatch up a good deal on a home! We look for Columbia to have a very solid buying season!

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"Your Columbia, MO Mortgage Broker"

Boone County Housing Picking Up?

Well as you can imagine we are almost a month in to the spring buying season and I must say I am fairly impressed with the real estate activity I am seeing. Given the negative media attention the housing sector has received, the increased scrutiny of lending guidelines, the volatility in mortgage rates and the notion of declining home values Boone County Missouri has fought through the battlefield and I believe finds itself in a very good position to take advantage of the last 2 years of under performance.

Through all my conversations with realtor's, title companies, our business activity and appraisers I can honestly say we have gotten off to a better start to the home buying season than I had originally planned. It seems the buyers are crawling out of the wood work and are less apt to "low balling" sellers who at times are desperate but those are far and few between given the inventory currently on the market. In fact I have heard that of Boone Counties home inventory approximately 22% are currently under contract and pending; that's very good in my opinion!

We have spoken before about how impressed we were with the resiliency of the Columbia market and these types of conversations, statistics and activity are a prime example of it. Great job to our realtor base for overcoming a ton of adversity in this market and I would also like to applaud the lending community for it's roll in "not panicking" in this extremely volatile and tough lending environment.

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$4.00 Gas? It's Sooner Than you Think!

A barrel of oil closed today up $1.89 at $119.37 after reaching a new high of $119.90! That's right folks we are looking at over $120 for one barrel of oil. It seems with every passing day we hit new outlandish highs for the price of crude and yet the Federal Government continues to turn a deaf ear as consumers pay more for gas in a month than they do on their ailing house payment. Most of the price hikes have to do with a reduction in inventory reserves, the weakening dollar and supply disruptions having to do with Nigerian pipeline explosions.

Many leading economists predict $4.00 gas at the pump as early as late May while parts of the country (San Francisco California) have already had the pleasure of opening their pocket books to this outrageous price! Meanwhile companies like Chevron and Shell continue to make billions a quarter (yes that's right!) billions a quarter in profits and can you believe this was below analyst expectations. So what do these companies do, they take this time of rising prices and further add fuel to the fire by shutting down pipelines for maintenance adding to the reduction in capacity utilization which is approaching below 80%. Basically this means that these companies COULD produce larger quantities of crude per day but refuse to do so. What happens when demand is high and supply is low? High, high and higher prices. What a mess!!!

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A Big Thank You!

Instead of my normal Monday posts, in which I depict the market and in particular what is happening in the real estate environment and mortgage rates, I thought I would take the time to thank the individuals; in particular realtors who have and continue to keep us very busy. I cannot state enough how much I appreciate your support and friendship! The below list of individuals are absolutely great to work with and are a true credit to their profession and in particular their clients.

1) Karl Starmer & Mikki Starmer: ReMax Fulton
2) Tim & Nikki Kuchta: 3D Realty
3) Mike Hill: Weichert Realtors - First Tier
4) Jason Thornhill: Weichert Realtors - First Tier
5) Michelle Curry: ReMax Boone Realty
6) Joy Keith: Century 21 Peak Dye & Associates
7) Evelyn Nachreiner: Century 21 Peak Dye & Associates
8) Jay Wilson: Weichert Realtors - First Tier
9) Amanda Lee: Weichert Realtors - First Tier
10) Brett & Ronda Benton: Benton Homes, Inc.
11) Hayes Murray: Plaza Real Estate
12) Dennis Jordan: Weichert Realtors - First Tier
13) Brian Asbury: House of Brokers

Thank you and continue the good work!

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Your Columbia Missouri Mortgage Broker

Rain, Rain, Go Away!

Today caps off another strong week in which we have seen the momentum build in terms of how many buyers are out shopping for homes. We have received numerous calls and referrals of people looking to get pre-approved. This is a great sign that shows the Columbia market is not down and out like many say it is. Now we just need the weather to break and start cooperating. It is no secret that when the weather is favorable over a weekend, activity picks up!
We really appreciate all the referrals we have received from our past clients and current realtor partners. We couldn't do it without you!
Referrals are the core of Professional Mortgage Group's business!
To Buyer's, we wish you luck in finding that perfect home! It is a great time to buy and we know the right home is out there for you.
To Realtor's, we wish you the best in your business as the buying season ramps up! The hard work you have been putting in during these tough times will no doubt pay off!
We have all been giving our respective professions 110% and we will all be better off in the long run!
So one last time, RAIN, RAIN, GO AWAY! We are all ready for Mother Nature to cooperate so we can get out and about, enjoy Spring, and get things rolling!

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"Your Columbia, MO Mortgage Broker"