Important product news this week: we just got word that for properties in Jefferson, King & Snohomish counties, our Jumbo Product will allow for a loan amount up to 70% loan to value! This helps and we will interpret this as a positive sign.
I saw an article form ForeclosureRadar.com (a firm that tracks California foreclosure info). Here is a positive statistic for California: Notice of Defaults were down for May 4.2% and year over year down 3.1%. An article from Business Week, on the other hand, predicts that housing will be back to "normal" in 2012, with another 6 to 12 months before the bottom is charted. This type of prediction, in my mind, doesn't hold a lot of weight. The two most important factors in our housing market are local job growth and demographics. Of course, the overall economy plays its role as well. People have to be working and spending money to have a growing economy and to buy their dream homes.
In the spirit of this grand 4th of July Holiday, I must share the following, from my favorite economist, Brian Wesbury: A strong economy, growing GDP (gross domestic product) is not about statistical components like consumption, the housing market, unemployment rates, inflation, etc. A strong economy is about entrepreneurs -- creating something out of nothing. What creates the environment for entrepreneurship is the institutional framework -- property rights, the rule of law and the level of common trust among citizens. The US is blessed by this type of framework provided by our Constitution. Economic laws can either enhance or undermine the vibrancy of an economy, helping or hurting individual incentives and the flow of creative ideas. Policy makers need to keep this in mind.