The third round of Federal Reserve printing of US dollars could be closer

Jul 152012

If the US Federal Reserve prints more dollars its sends chaos in a unstable system. It could cause inflation or it cause ultra low rates, it too difficult to predict.

Calls for QE3 grow as economy wanes

By Hibah Yousuf @CNNMoneyInvest July 10, 2012: 7:09 PM ET

NEW YORK (CNNMoney) — Is more stimulus on the way from the Federal Reserve? Wall Street sure thinks so.

In fact, nearly two-thirds of the 30 investment experts surveyed by CNNMoney agree that the Fed’s latest move to extend its so-called Operation Twist policy was warranted. The same group also thinks the central bank may reconsider a third round of asset purchases, a policy known as quantitative easing or QE3, if the economy and financial markets deteriorate further.

The tone has shifted from the start of the year, when experts wanted the Fed to reserve QE3 as a “last resort,” citing an improving job market and strength in the manufacturing sector. Of course, both of those catalysts have since reversed course, prompting the renewed calls for QE3.

Reports last week showed that U.S. manufacturing activity contracted for the first time in almost three years, while hiring remained sluggish for a fourth straight month.

“Extending Operation Twist was a less overt move for the Fed to keep interest rates low, but I think economic conditions are moving in a direction that it could become necessary for the Fed to pump money into the system in a more obvious way through QE3,” said Tom Schrader, managing director at Stifel Nicolaus.

Costa Mesa Overview

Median home price is $424,000. Based on a rental parity value of $558,000, this market is under valued.

Monthly payment affordability has been improving over the last 12 month(s). Momentum suggests improving affordability.

Resale prices on a $/SF basis declined from $292/SF to $292/SF.

Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months.

Median rental rates increased $25 last month from $2,291 to $2,316.

Rents have been rising for 12 month(s). Price momentum suggests rising rents over the next three months.

Market rating = 6

Proprietary OC Housing News home purchase analysis

2253 RUTGERS Dr Costa Mesa, CA 92626

$525,000 …….. Asking Price
$196,000 ………. Purchase Price
10/16/1991 ………. Purchase Date

$329,000 ………. Gross Gain (Loss)
($15,680) ………… Commissions and Costs at 8%
============================================
$313,320 ………. Net Gain (Loss)
============================================
167.9% ………. Gross Percent Change
159.9% ………. Net Percent Change
4.8% ………… Annual Appreciation

Cost of Home Ownership
——————————————————————————
$525,000 …….. Asking Price
$105,000 ………… 20% Down Conventional
3.80% …………. Mortgage Interest Rate
30 ……………… Number of Years
$420,000 …….. Mortgage
$98,449 ………. Income Requirement

$1,957 ………… Monthly Mortgage Payment
$455 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$131 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
………… Homeowners Association Fees
============================================
$2,543 ………. Monthly Cash Outlays

($312) ………. Tax Savings
($627) ………. Equity Hidden in Payment
$134 ………….. Lost Income to Down Payment
$151 ………….. Maintenance and Replacement Reserves
============================================
$1,889 ………. Monthly Cost of Ownership

Cash Acquisition Demands
——————————————————————————
$6,750 ………… Furnishing and Move In at 1% + $1,500
$6,750 ………… Closing Costs at 1% + $1,500
$4,200 ………… Interest Points
$105,000 ………… Down Payment
============================================
$122,700 ………. Total Cash Costs
$28,900 ………. Emergency Cash Reserves
============================================
$151,600 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..

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	$425,000 2253 COLGATE Dr		0.05 miles 3 bd / 2 ba 1,291 Sq. Ft.
	$515,000 2438 BOWDOIN Pl		0.43 miles 4 bd / 2.5 ba 2,164 Sq. Ft.
	$449,000 2161 MINER		0.59 miles 4 bd / 2 ba 1,314 Sq. Ft.
	$569,000 303 PRINCETON Dr		0.6 miles 3 bd / 1.75 ba 1,550 Sq. Ft.
	$560,000 396 PRINCETON Dr		0.77 miles 3 bd / 2 ba 1,600 Sq. Ft.
	$650,000 155 TERRAZA Ct		0.79 miles 3 bd / 2.25 ba 1,850 Sq. Ft.
	$899,000 259 East 21ST St		0.88 miles 4 bd / 2.5 ba 1,907 Sq. Ft.
	$849,500 2261 SANTA ANA Ave		0.89 miles 3 bd / 2 ba 1,358 Sq. Ft.
	$759,000 2336 CYNTHIA Ct		0.89 miles 4 bd / 1.75 ba 1,796 Sq. Ft.
	$855,000 2201 SANTA ANA Ave		0.89 miles 3 bd / 2 ba 2,016 Sq. Ft.