There’s a holiday shortened week ahead, as the financial markets will be closed on Friday in observance of Independence Day. But…there could still be lots of action this week, particularly with the Department of Labor’s Jobs Report scheduled for Thursday, just ahead of the long weekend. A positive report could be good news for Stocks, but bad news for Bonds and home loan rates, so it will be especially important to watch all the fireworks that follow the headlines.

Remember when Bond prices move higher, home loan rates move lower…and vice versa. The chart below shows how the action in the Bond market improved last week, helping home loan rates to improve as well. So as always, I will be watching closely during the coming week.

If inflation continues to shake up the markets or if the news on employment is surprisingly good…the action for Bond prices and home loan rates could change direction and worsen.

Patrick Dunn, Westwood Mortgage Inc. & MMG Weekly
patrick@westwoodmortgage.com / http://www.certifiedplanning.com

Come spring 2009, AvalonBay Communities will begin building an apartment complex on the west side of Lower Queen Anne between Harrison and West Thomas St. on 3rd Ave W- Avalon Queen Anne. The building is slated to accommodated approximately 200 units, 247 parking stalls, 5,000 SF of retail space and will be designed by GGLO. After construction starts the building will take about 18 months to be completed and cost about $60 million to build.

AvalonBay had been building about one apartment complex in the Northwest every three years, but are wanting to create a larger presence in our market. Avalon Queen Anne is one of 3, possibly 4 apartment buildings that will be built in the next two years…the others will be built in Kirkland, Bellevue and Ballard! Click here to read more.

Here is the latest from Lacie Doman, the Marketing Manager of AVA Hotel & Residences:

PROJECT SCHEDULE
With our Master Use Permit now in hand, the AVA development team is in the final design and entitlement process. As we prepare to submit for the final building permits from the City of Seattle, we continue to work closely with our contractor to secure the best possible construction pricing for our future owners. We anticipate receiving final project costing and entitlements by the second quarter of 2009, and will be in position at that time to finalize the construction schedule and occupancy date.

PRIVATE PREVIEW APPOINTMENTS
Later this summer, private preview appointments will be available for all interested homebuyers to tour the sales center. You will be among the first to preview the contemporary and sophisticated design palettes which have been custom created for AVA as well as explore home décor options. The sales center is located at the corner of 8th Avenue and Olive Way, just one block away from the AVA site (open by appointment only).

PRIORITY RESERVATION OPPORTUNITY
New homebuyers will be invited to entertain a Priority Agreement, which provides a preferred opportunity to select from the new release of homes once they are officially released for sale next year. Priority Agreements are offered in exchange for a fully refundable deposit of $10,000 and are a convenient way to secure your purchase position with preferred selection and introductory prices.

Click here to read more on AVA Hotel & Residences!

What was to be the site of 1 Hotel & Residences will remain a desolate gaping hole on 2nd Ave and Pine until Starwood Capitol Group can secure a construction loan and proceed with a newly designed 23-story hotel-condo building.

Not only has the construction been delayed for nearly a year now, but most recently Avalon Holdings, a Portland-based firm headed by Paul Brenneke, has sold their interest ($45 million) in the $250 million project. Avalon will continue to develop the 18,800 square feet of retail space at street level of the Macy’s parking garage and it was announced that Columbia Sportswear Company is planning to operate two retail stores in the space as early as this fall.

Click here to read more!

What once was Expo62 Condominiums is now Axis Apartments! Located on the border of lower Queen Anne and Belltown at 123 2nd Ave, Axis is just steps away from the Key Arena, Seattle Space Needle, Pacific Science Center, The Experience Music Project, Boeing IMAX Theater, Marion Oliver McCaw Hall and the Pacific Northwest Ballet. If you are looking for easy access to the waterfront-Myrtle Edwards Park, Olympic Sculpture Park, HWY 99, I-5 or downtown by bus- this location will be perfect for you!

Axis will soon be BUILT SMART certified by Seattle City Light and BUILD GREEN certified from the Master Builders Association. There are 7 stories and floorplans range from 459 square foot studios to 1,762 square foot 2 bedroom/2 bath penthouses. Studios are priced starting at $1175, 1 bedrooms at $1450 and 2 bedrooms at $1810, most offering granite countertops, stainless steel appliances with gas stoves, hardwood floors and fireplaces.

The building itself offers a lobby with a mezzanine and library, a theater room, 24-hour fully equipped fitness center, business center and a rooftop garden with a pet care center!

Click here to visit the Axis Apartment website!

After recently placing the site next to the Cristalla (NW corner of 2nd and Virginia) on the market FOR SALE, The Justen Company and Columbia West Properties just released their latest designs for the proposed condominium project…guess they have changed their minds!

The Design Review Board will be having a meeting tomorrow, 5:30pm at City Hall. If you are interested in attending, here is the scoop:

City Hall
600 4th Ave/ 601 5th Ave
Boards and Commission Room L280
* After 6pm, you will need to use the 5th Ave entrance. If the 5th Ave entrance is locked, press red button for security guard and use the center elevators to access L280.

For those of you living at the Cristalla, there is a rather large packet at the front desk for you to view renderings and the specifics about the project. Will keep you posted!

The coming week is chock full of economic reports that will likely have a big influence on the financial markets. We start off on Tuesday with a report on Consumer Confidence, and also the beginning of Fed meetings which will culminate in a Rate Decision and Policy Statement on Wednesday afternoon at 2:15pm ET. It is widely believed that the Fed will keep the Fed Funds Rate at 2%…but what will be most interesting is the wording of their carefully crafted Policy Statement. If it gives hints of their intent to hike rates in the near future to help fight inflation, it could actually be good news for Bonds and home loan rates.

A look at sales numbers in the new and existing housing markets will come Wednesday and Thursday, and Friday will wrap up the week with a bang as the Fed’s favorite gauge of inflation, the Core PCE (Personal Consumption Expenditure) data will be released. Since this will be following the Fed’s announcement on Wednesday – will the Fed look smart if they’ve held rates steady, or perhaps come under criticism if the inflation numbers are super-heated? Could be a greasy few days for the Fed, so stay tuned.

Remember that when Bond pricing moves higher, home loan rates move lower – and then take a look at the chart. You can see how in recent days, Bonds have moved higher, but are now battling an overhead “ceiling” of technical resistance. If Bonds and home loan rates are to improve in the near future, it will take some very Bond-friendly news to help crash through the ceiling that has stopped progress in its tracks for the time being.

Patrick Dunn, Westwood Mortgage Inc. & MMG Weekly
patrick@westwoodmortgage.com / http://www.certifiedplanning.com/

This coming week, one economic report in particular bears inflated significance…Friday’s release of the infamous monthly Jobs Report. It will reveal, among many other things, the number of jobs lost or gained during the month of May. Last month’s Jobs Report indicated that 20,000 jobs were lost in April, and while this was better than the expected job losses of 75,000, it is possible that the reported number understated the actual number of jobs lost, due to how the Department of Labor averages their count. And part of each month’s report is “revisions” to the several prior months’ numbers…which this could be quite a wild card for Bonds and home loan rates.

Last month’s Jobs Report, which was indeed more positive than expected, caused Bonds to fall a whopping 134bp in a matter of minutes, and home loan rates worsened quickly. Why? Because even though the news wasn’t great, it sure was better than anticipated…and this caused money to flow out of Bonds, and into Stocks…which caused Bond prices and home loan rates to worsen. This week’s Jobs Report could sure be another mover, and if the report or revisions indicate positive news on the jobs front, home loan rates will likely worsen in response.

Remember when Bond prices move higher, home loan rates move lower…and vice versa. And as you can see in the chart, Bonds moved lower for most of the week, and actually closed below an important technical level at the 200-day Moving Average. This is a very important level, as it can act as either a very strong floor of support helping Bond prices not to fall below it…or as an equally strong ceiling of resistance, preventing Bonds and home loan rates from improving above it. And with Bonds currently having fallen beneath it, I’ll be watching closely this week to see if Bonds have indeed fallen and can’t get up…or if they can break above that tough level later this week and help home loan rates improve.

Patrick Dunn, Westwood Mortgage Inc. & MMG Weekly
patrick@westwoodmortgage.com / http://www.certifiedplanning.com/