Merry Christmas!

I wanted to take a moment to wish each and every one of you a very Merry Christmas! We are so thankful to have so many clients and friends who make our job so enjoyable. Each of you are a blessing and we are so grateful. I hope this week brings you lots of time with family and friends and memories to last a lifetime. We look forward to a great 2009!

(By the way I am continuing to strive for Realtor of the year since I'm clearly not getting Mother of the year since I drug my family out in 30 degree weather to attempt to get a Christmas card picture. This is the best we got--- can you see my two guys shivering and my little one giving me a face saying I must be crazy if I think she's even going to crack a smile!)

Market Comment - Week of December 22nd, 2008

Mortgage bond prices rose last week, which helped mortgage interest rates improve, but only slightly. We saw a huge rally following the Fed rate cut Tuesday. Unfortunately the gains were short-lived and most were erased the following day. Trading remained volatile throughout the remainder of the week. The White House stepped in to help the troubled auto industry Friday, which sent stocks higher that morning at the expense of mortgage and Treasury bonds. For the week, interest rates on government and conventional loans fell by about 1/8 to 1/4 of a discount point. The Treasury auctions will set the tone for trading this week. Foreign demand for dollar denominated assets will be the focus. The bond market will close early Wednesday ahead of the Christmas holiday Thursday. Trading will resume Friday. This shortened trading week may lead to mortgage interest rate volatility.

Economic Factors this week:

2-year Treasury Note Auction
Monday, Dec. 22, 2008
Consensus Estimate: None
Analysis: Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.

Q3 GDP final revision
Tuesday, Dec. 23, 2008
Consensus Estimate: Down 0.5%
Analysis: Important. The aggregate measure of US economic production. A larger decrease may lead to lower rates.

Existing Home Sales
Tuesday, Dec. 23, 2008
Consensus Estimate: Down 1.0%
Analysis: Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates.

U of Michigan Consumer Sentiment
Tuesday, Dec. 23, 2008
Consensus Estimate: None
Analysis: Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.

New Home Sales
Tuesday, Dec. 23, 2008
Consensus Estimate: Down 3.0%
Analysis: Important. An indication of economic strength and credit demand. A decrease may lead to lower rates.

5-year Treasury Note Auction
Tuesday, Dec. 23, 2008
Consensus Estimate: None
Analysis: Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.

Durable Goods Orders
Wednesday, Dec. 24, 2008
Consensus Estimate: Down 3.1%
Analysis: Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates.

Personal Income and Outlays
Wednesday, Dec. 24, 2008
Consensus Estimate: Income unchanged, Outlays down 0.8%
Analysis: Important. A measure of consumers' ability to spend. Weakness may lead to lower mortgage rates.

Revised GDP

The Gross Domestic Product (GDP) is one the most important reports during any given quarter. GDP is a measure of US economic output and spending. The report is significant in that it provides investors, analysts, traders, and economists with a comprehensive report of the direction of the economy. In addition, it also influences the decisions of Federal Reserve policy makers, Congressional budget employees, and corporate financial planners. GDP is the sum total of goods and services produced by the United States. The four major components of the GDP release are consumption, investment, government purchases, and net exports. The initial report is often based on incomplete data. Therefore, additional revisions are released over the following two months. There are often substantial differences between the initial release and the revisions. The mortgage-backed security market generally responds favorably to weaker GDP growth. The revised third quarter gross domestic product data this week has the potential to move mortgage bond prices, especially amid the thin trading that is likely

Holiday Fun Facts

(Enjoy this fun facts courtesy of Martha Stewart's latest issue!)

MISTLETOE has long been valued for more that its ability to elicit kisses. The ancient Celts believed the plant had medicinal uses, including the power to heal injuries and boost fertility.

14 - The number of Social Security cards issed with the name Santa Claus since 1900, according to the Social Security Administration


"JINGLE BELLS" was originally composed to celebrate Thanksgiving. Weitten in 1857 by American songwriter James Pierpoint for his church choir, the sond proved so popular, it was performed again at Christmas services.

8,962 - The number of people who made snow angels simultaneously on the grounds of the North Dakota Capital in Bismark, setting a world record in 2007.


REINDEER are the only deer species in which both sees grow antlers. Adult males shed their antlers every fall; females and adolescents, every spring. Therefore, any reindeer you spy pulling Santa's sleigh are either female or young males.

Economic Factors this Week:

Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading remained volatile with wild swings in both stocks and bonds. The Treasury auction of 3 and 10-year bonds was met with reasonable demand helping to support the overall interest rate markets. The economic data released was within the estimated range and indicated the US economy continues to weaken. For the week, interest rates on government and conventional loans fell by about 3/8 of a discount point.
The meeting on Tuesday of the Federal Open Market Committee will be the most important event this week. Look for rates to be potentially volatile Monday as traders position themselves ahead of Tuesday's meeting.

Industrial Production

Monday, Dec. 15, 2008

Consensus Estimate: Down 0.5%

Analysis: Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.

Capacity Utilization

Monday, Dec. 15, 2008

Consensus Estimate: 75.9%

Analysis: Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates.

Consumer Price Index

Tuesday, Dec. 16, 2008

Consensus Estimate: Down 1.3%, Core up 0.1%

Analysis: Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.

Housing Starts

Tuesday, Dec. 16, 2008

Consensus Estimate: Down 7.7%

Analysis: Important. A measure of housing sector strength. Larger than expected decreases may lead to lower rates.

Fed Meeting Adjourns

Tuesday, Dec. 16, 2008

Consensus Estimate: 75 basis point cut

Analysis: Important. Most expect the Fed to cut rates. Volatility will likely surround the adjournment of this meeting.

Leading Economic Indicators

Thursday, Dec. 18, 2008

Consensus Estimate: Down 0.5%

Analysis: Important. An indication of future economic activity. Weakness may lead to lower rates.

Philadelphia Fed Survey

Thursday, Dec. 18, 2008

Consensus Estimate: None

Analysis: Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.

Fed Meeting

The United States central bank, the Federal Reserve, coordinates the borrowing and lending activities of federally chartered banks. The principal reason the Federal Reserve was created was to reduce severe financial crises. One way of accomplishing this goal is to control the amount of money that flows through the economy. By manipulating the US money supply, the Fed influences inflation, unemployment, and the level of US economic activity. The Fed has a variety of tools that it uses to control the money supply, but its chief policy tool is the manipulation of short-term interest rates.

All eyes will be focused on the Fed meeting Tuesday. Most analysts predict another rate cut as the economy continues to struggle. As of trading late last week, futures contracts showed a greater than 80% chance of a 75 basis point cut.

Keep in mind that a Fed rate cut does not automatically mean mortgage interest rates will improve. The Federal Reserve has direct control over the level of short-term interest rates. The Fed's influence over longer-term interest rates with rate cuts is less certain. However, the unprecedented recent direct purchasing of mortgage bonds is a strong effort to push longer-term rates lower as well.

Remember, rates are historically favorable. While there is a strong possibility rates could improve, there are no guarantees in these uncertain times. As a reminder, just a few months ago analysts overwhelmingly predicted gas prices would continue to rise. Conditions can change quickly.

Going Green

By no means have I reached tree hugger status, but I am definitely making more of an effort to "go green". In the past few months our family has really made more of an effort to be environmentally sensitive. I just wanted to pass on 2 small things that we have begun doing that may work for you and your family.

The first is the cheap investment in resusable grocery bags. After several grocery trips to Publix I broke down and decided to buy a few of the reusable bags they sell for $1 each. I mean, how easy is that? Now, I will confess that there have been plenty of times that I am checking out and realize that the bags are in my car, but I am getting better. I don't know what it is but I find great satisfaction in walking out with my 3 Publix bags vs. a cart full of plastic. It's a small step, but the least we can do. Not to mention the bags also bring endless hours of entertainment for my kids:

The other thing I have decided to do this holiday season has to do with the ALL the holiday catalogues we get on a daily basis. Seriously, how many times do I need to get the same catalogue or magazine in one months time span? Not to mention they are all selling the same toys! I have decided to collect all of the magazines and catalogues and bring them to a local recycling location. If you live in Kennesaw, Kennesaw Charter School has a dumpster just for newspaper and magazines.(http://www.kennesawcharter.com/)

If you would like to take additional steps to stop your junk mail here is another website to check out: http://www.ecocycle.org/junkmail/index.cfm

"Bring One for the Chipper"

Keep Cobb Beautiful is inviting everyone to "Bring One for the Chipper," and recycle your Christmas tree after the holidays.

As a part of a statewide effort to reuse Christmas trees, Keep Cobb Beautiful is hosting over 13 convenient sites at which area residents can drop-off their trees on Saturday, January 3, 2009, 9 a.m. to 4 p.m. Keep Marietta Beautiful, Keep Smyrna Beautiful and other affiliates will also sponsor Christmas tree recycling. In appreciation of your recycling efforts, participants will receive a seedling while supplies last.

Most sites will be manned by various volunteer organizations from 9 a.m. until 4 p.m. Drop off will only be allowed on that date. No other items will be allowed to be dropped off at sites. Cobb County Parks sites will accept trees from Dec. 26 until Jan. 3. All Home Depot sites, and the Cobb County Vegetative Waste location will accept trees ONLY on Saturday, January 3. To find a site location near you, or to volunteer at a site location look on the web site at http://kcb.cobbcountyga.gov/chipper.htm. Or you may call Keep Cobb Beautiful at (770) 528-1135.

“"Bring One For the Chipper" is sponsored state-wide by the Georgia Department of Community Affairs' Keep Georgia Beautiful program Georgia Power Company, The Home Depot, The Davey Tree Company, Cobb EMC, WXIA-TV, and local Keep America Beautiful affiliates.

Davey Trees at 770-451-7911, as well as the Cobb Parks chipper locations will have free mulch available to citizens after January 6 th .

Market Comment - Week of December 8th, 2008

Mortgage bond prices rose last week pushing mortgage interest rates lower. Mortgage bonds were initially helped by reports the Treasury would try to get rates lower. Unfortunately, a lot of the gains seen mid-week were erased Friday following mixed employment figures. Unemployment was not as bad as anticipated and average hourly earnings showed a surprise increase. The payrolls component was bond friendly but it wasn't enough to overshadow the headline figure. For the week, interest rates on government and conventional loans fell by about 1/8 of a discount point. The retail sales data Friday will be the most important release this week. Look for any additional moves by the Fed, the US Treasury, and legislative developments to also result in mortgage interest rate movements. This will be the last full week of data before the next Fed meeting.

Economic Factors for the week:

Trade Data
Thursday, Dec. 11, 2008
Consensus Estimate: $54 billion deficit
Analysis: Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.

Producer Price Index
Friday, Dec. 12, 2008
Consensus Estimate: Down 1.8%, Core up 0.2%
Analysis: Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.

Retail Sales
Friday, Dec. 12, 2008
Consensus Estimate: Down 1.4%
Analysis: Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.

U of Michigan Consumer Sentiment
Friday, Dec. 12, 2008
Consensus Estimate: 58.0
Analysis: Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.

4.5% Rates Possible?
The news is abuzz about the Treasury lowering home loan rates to 4.5% to stem the foreclosure crisis but details have been lacking. The Treasury Department stated it is looking for additional ways to help the struggling housing industry and believes lower rates are needed. This idea is similar to the November 26th announcement from the Federal Reserve where they indicated the intent to purchase up to $500 billion in mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. In addition they would buy another $100 billion in direct debt issued by those firms. The November news caused bond prices to spike higher and forced mortgage rates lower. Just like any commodity, whenever tremendous buying interest exists, prices rise. Mortgage rates fell almost 1/2% in rate following the announcement. However, the following week market forces continued and rates spiked a bit higher from the recent lows. It is important to remember that there are no details to the Treasury plan as of yet. The Federal Government does not directly dictate home loan rates. Rates are determined by price movements of Mortgage Backed Securities (MBS), which compete for investor funds in the open market. The Treasury can buy mortgage bonds on the open market but remember that they are not the only entity buying and selling these instruments. The Treasury is in a very tough position in trying to manipulate home loan rates. Creating a new Federal mortgage program could be very risky. How would rates be set, who would qualify, and can the funds be used for purchases and refinances are just some of the questions being asked. The other critical concern is implementing such a program without destroying the current mortgage securities market. Doing so could have the unintended consequence of causing additional economic turmoil. Rates are not going to 4.5% with the wave of a wand by Hank Paulson or Ben Bernanke. As a matter of fact, the massive borrowing to fund the TARP program has a negative effect on rates. At this time, the announcement still leaves a lot of uncertainty. What we do know is that rates are at historic lows and house prices have moderated setting up a great scenario for people who need to refinance or are looking to buy a home. Waiting for rates to fall to 4.5% may leave people sorely disappointed.

Christmas Events in Kennesaw

Christmas Tree Lighting on Thursday the 4th!

Join Mayor Mark Mathews, members of the Kennesaw City Council, and other City officials as they "flip the switch" to light the official Christmas tree of Kennesaw. The Tree Lighting Ceremony will take place on Thursday, December 4th at 7:00 p.m. at the Depot. The program is free to attend and will include holiday choral music, a sing-along, free warm beverages and cookies and holiday cheer.

Santa Parade on Saturday the 13th!

The City of Kennesaw's 2008 Santa Parade is sure to inspire delight and wonder for the young, and young at heart. This year's parade theme is "Our Hometown Christmas".
The Santa Parade will feature festive holiday characters, musical ensembles, marching bands, designer floats, live reindeer and the jolly old elf himself, Santa Claus. Other units will include dance troops, baton twirlers, boy and girl scouts, church groups, antique cars and more.
The parade will begin at 12:00 noon and last approximately one hour. The parade route begins at Park Drive and progresses through downtown Kennesaw to Sardis Street, looping around to finish near the Depot. Arrive early for a good viewing location and dress appropriately for the weather.

Following the parade, join us at the Depot for the annual Day with Santa event. From 1:00-4:00 p.m. kids and their families are invited to line-up and meet Santa Claus - for free!
Bring your own camera or let our professional photographer take your picture for you.

In addition to scheduled stage entertainment, a number of holiday streetmosphere characters, craft vendors, inflatables and attractions will be on-hand for the amusement of visitors. Food and beverages will also be available for purchase.

Market Comment - Week of December 1st, 2008

Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading remained volatile as trading was thin amid the shortened holiday trading sessions. Mortgage bonds rallied nicely following the announcement that the Treasury and the Federal Reserve will spend $800 billion to help the ailing credit markets (details in article below). For the week, interest rates on government and conventional loans fell by about 1.625 discount points. The employment report Friday will be the most important data this week. Look for any additional moves by the Fed, the US Treasury, and legislative developments to also result in mortgage interest rate movements.

Economic Factors:

Construction Spending
Monday, Dec. 1, 2008
Consensus Estimate: Down 0.9%
Analysis: Low importance. An indication of economic strength. Weakness may lead to lower rates.

ISM Index
Monday, Dec. 1, 2008
Consensus Estimate: 38.00
Analysis: Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.

ADP Employment
Wednesday, Dec. 3, 2008
Consensus Estimate: Jobs -173k
Analysis: Important. A measure of employment. Weakness in payrolls may bring lower rates.

Revised Q3 Productivity
Wednesday, Dec. 3, 2008
Consensus Estimate: Up 0.9%
Analysis: Important. A measure of output per hour. Improvement may lead to lower mortgage rates.

Fed "Beige Book"
Wednesday, Dec. 3, 2008
Consesnsus Estimate: None
Analysis: Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.

Factory Orders
Thursday, Dec. 4, 2008
Consensus Estimate: Down 2.7%
Analysis: Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.

Employment
Friday, Dec. 5, 2008
Consensus Estimate: Jobs -300k, Unemp @ 6.8%
Analysis: Very important. An increase in unemployment or a large decrease in payrolls may bring lower rates.

Consumer Credit
Friday, Dec. 5, 2008
Consensus Estimate: 2.7B
Analysis: Low importance. A significantly larger than expected increase may lead to lower mortgage interest rates.

$800 Billion
The US Government finally took a needed step to stabilize home prices and help lower mortgage interest rates with the announcement of a new $800 billion spending plan. While rates on Treasury bonds had pushed historically low over the past few weeks, rates on mortgage bonds were way behind. The housing market remains in peril and the demand for mortgage bonds is not as strong as the demand for Treasuries. Fortunately, the Federal Reserve announced it would purchase $500 billion of mortgage-backed securities and another $100 billion of debt from Ginnie Mae, Fannie Mae, and Freddie Mac. This spending is an effort to improve the credit markets so businesses and consumers can get loans. Treasury Secretary Henry Paulson said, "This lack of affordable consumer credit undermines consumer spending and, as a result, weakens our economy." The Fed will also make $200 billion available to help with the consumer debt market. The initial reaction to the plan was very favorable for mortgage interest rates. The financial markets were relieved that something was done to address the housing industry. Keep in mind that despite the recent improvements the housing sector still remains troubled. It will likely take more efforts to resolve the credit freeze. Expect more market volatility.