THINGS COULD BE WORSE...much worse. While last week's news showed some weakness in housing and a few assorted economic reports, the Stock market seemed to fare pretty well with good reports recently from big bellwethers such as Apple and Microsoft. And home loan rates were stable to slightly improved for the week overall. But let's look back in time to exactly 78 years ago today, October 29th, 1929.

This day saw such crushing damage for the Stock market that it lives in history as "Black Tuesday", and is generally thought of as the day that sent the US into the Great Depression, where unemployment rates rose to a whopping 25%. Imagine one out of four of your neighbors, friends, and family members all being unemployed! So while last week's readings on housing, manufacturing and general consumer sentiment came in a bit weaker than expected - things could certainly be much worse.

And many of the soft economic reports helped confirm the market's general belief that the Fed will again cut the Fed Funds Rate at their upcoming meeting. But what will this mean for home loan rates? Read on to find out what even the media consistently seems to get wrong.

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How would like to look out over a lake while you are in the kitchen cooking? How about sitting down for dinner and enjoy a good meal with a view of a lake. Better yet, how about waking up every morning and getting out of bed and the first thing you see outside is a lake view. If you would like any of this, then this is the home for you! New construction on a .26 acre lot with 60' of Lake Waterfront! Your new home boast 1735 sqft which consist of 3 bdrms, 2.5 baths, dining room, living room, utility room, and large bonus room. Some added features are the tile entry, tile flooring in bathrooms, tile floor in the kitchen, forced air heating, rounded corners, bath off mstr-bdrm, hardi-plank siding and VIEWS. The master bdrm, kitchen, and dining all have panoramic views of the lake. Your lot is level with a generous size front yard.

Todays real estate market presents a great opportunity for the "move up" buyer and here is why. Let's say the home you are currently living in is worth $350,000 and the home you need to move into is worth $650,000. So you decide to make an offer on the $650,000 home for $600,000. The sellers are motivated and you are the first offer they have seen in six months, so they accept your offer. Now you must sell your home, you put you home on the market for $350,000 and after 30 days havn't received any offers to consider. You then drop you price to $335,000 and get an offer right away. You are now able to purchase your new needed home. Yes, you had to drop the price of your own home by $15,000 but you were also able to purchase your new home for $50,000 less than market value netting a gain of $35,000! Remember, you make money in real estate go in not going out. Move up buyers are in a market today to capitalize on move up homes by purchasing them for below market value. A 10% price drop on a $650,000 home is far greater than a 10% price drop on a $350,000 home. So, if you are looking  for a larger home to meet your needs now is the time to buy!

Where have all the buyers gone?  Buying real estate in the greater Seattle area in this markets presents a great opportunities. How? You have sellers that are in a situation of a "must sell" for many reasons. Then you have all this inventory just sitting on the market creating a great buyers market. Interest rates are still low. Prices are coming down in many areas. What does all this do for you the buyer, creates opportunities to purchase real estate  below market values and be in the driver seat during the whole transaction! You make money in real estate going in not going out, let me explain. When you buy a property in a market like we are experiencing you have the opportunity for a great deal, your money is made on the purchase not the sale. Let's say you bought a property in the up market and paid full price for your property and are now trying to sell that same property, you will not make as much. Yes, money is harder to come by due to the subprime fallout but this actually creates an even better market to buy for those who can. So, if you are in the market to buy a home or investment property now is the time, don't wait for the market to change because when it does price will start to go up again!

NO PAIN...NO GAIN? While that old maxim is often the case, for the past week the Stock market's pain has been the Bond market's gain. Last week, the Dow lost around 500 points - and as money flowed out of Stocks and into Bonds, this helped home loan rates improve by .125 - .25% over the course of the week.

But if you want to revisit some real Stock market pain, just dial back the clock twenty years from last Friday. On October 20th 1987, the Stock market suffered its very largest one day loss ever, with the Dow falling 508 points and losing 22.6% of its value overall. That's like the Dow losing over 3100 points today! And just prior to that wild meltdown, 1986 and 1987 had been banner years for the Stock market - fueled by hostile takeovers, leveraged buyouts and merger mania.

The rest of the economic news for last week was a mixed bag, including lower than expected Housing Starts and Building Permits for new construction homes, and also an overall tame read on consumer inflation via the Consumer Price Index.

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Here it is, two new construction homes on 60' feet of lake waterfront for only $319,500 each. Each lot is .26 acre level lot found on a dead end road with 60' feet of lake water front. Your 2007 quality built home boast 1735 square feet including 3 bedrooms, 2.5 baths, living room, dining room, utility room, and bonus room. Some of the extra features are the rounded corners, double pane insulated windows, tile entry way, tile flooring in the bathrooms, tile flooring in your kitchen, tile backsplash in the kitchen, and stainless appliances. You will also enjoy your sweeping lake views from the kitchen, dining room and master bedroom.

"I'VE HEARD PEOPLE SAY THAT TOO MUCH OF ANYTHING IS NOT GOOD FOR YOU...BUT I CAN'T GET ENOUGH OF YOUR LOVE, BABE." BARRY WHITE And that's exactly the song that Mortgage Bonds appear to be singing to the 200-day Moving Average recently. In fact, they've touched this level on twelve of the past sixteen trading sessions - and just can't seem to get enough. But why do Bonds continue to linger around this level, and how much will be enough?

The 200-day Moving Average has historically acted as a very strong "floor of support" or "ceiling of resistance" for Bonds, meaning that Bonds generally decidedly trade above or below this line. And the current tap-dance that Bonds are doing all over this level shows that there is a bit of uncertainty in the markets - and it will take a series of economic reports that are either very strong or very weak to propel Bonds to move away from the 200-day Moving Average. Remember that strong economic news tends to move Bond prices lower, causing home loan rates to worsen - and weak economic news tends to move Bond prices higher, causing home loan rates to improve.

And last week's news just didn't provide enough impetus for Bonds to make a decisive move one way or the other. Retail Sales were much better than expected yet Consumer Sentiment was lower than expected, while reads on Producer Price Inflation were a bit mixed. All in all, home loan rates stayed generally flat for most of the week.

Here is this weeks forecast.

"MISSED IT BY THAT MUCH." Remember the old show "Get Smart", when bumbling secret agent Maxwell Smart would describe his latest major goof by holding up his fingers about a half-inch apart, and emphatically stating that famous line? In similar fashion...it appears the Department of Labor missed some recent job creation counts by quite a long shot. Last Friday, the highly anticipated monthly Jobs Report arrived bright and early, showing 110,000 new jobs created during September, very close to what analysts had expected. But the real surprise was the upward revision to last month's shocking number, which had shown a LOSS of 4000 jobs in August. The revised number was a gain of 89,000 jobs, or a change of 93,000! That's right - the Department of Labor "missed it by that much." Bond prices and home loan rates worsen on strong or positive economic news, so the surprising upward revisions in job growth caused Bonds and home loan rates to worsen by about .125% on Friday alone. AND SPEAKING OF JOBS - HAVE YOU EVER CONSIDERED WHAT WOULD HAPPEN IF YOU LOST YOUR JOB OR YOUR INCOME DUE TO A HEALTH CRISIS OR INJURY? NO ONE EVER EXPECTS IT TO HAPPEN TO THEM - BUT WHY NOT BE ON YOUR WAY TO MAKING SOME HEALTHY CHOICES FOR YOUR OWN FINANCIAL FUTURE RIGHT NOW?

Forecast for the Week

If you have been looking for a rambler that offers privacy, elbow room, quality construction, extra room for your boat and RV this is the rambler for you! Your 2100 square foot rambler consist of 3 large bedrooms, 2 full baths, dining room, living room, family room, utility room and 3 car garage with extra storage. New interior paint, new maple laminate floors, 900 square foot Trex deck, 220 in garage and deck, RV parking with water and power hook-ups are just some of the extra's found in this quality home. Your .47 acres is positioned on the 12th hole of Kayak Point Golf course. The lot boast extensive landscaping, mature trees and plenty of privacy.

2002 built duplex on a .57 acre lot in Lynnwood. Each unit rents for $1350 with tenants paying all utilties. Both units include three bedrooms upstairs, 2 full baths upstairs (one off master), living room, kitchen eating area, kitchen, utility room and 2 car garages. You have a great investment as it sits or potential for future investment, like- condo conversion or subdividable lot (zoning R9600 with surrounding being R7200). For more information go to http://listings.joshuakoffler.com/ or call me!