I’ve been thinking a lot about the core beliefs of serious real estate investors.  By “core beliefs”, I mean the fundamental truths about our business that are plain, clear and undeniable to the wise among us.

I’d love to have your thoughts about “core beliefs”.  Here are a *few* (I have many more ideas) of the core beliefs that may serve as good examples for you:

• I believe real estate investing is the surest way to achieve long-term, generational wealth
• I seek to establish transactions that are positive for all parties involved, even though the benefits may not accrue immediately to each party
• I seek financial independence and abhor the excessive involvement of government in my personal and professional life
• I believe that my biggest impact on my community can be had by realizing the greatest profits possible within the constraints of morality and ethics so that I can give back to my community in the manner that most resonates with my own inner guidance
• I reject the notion that virtue or praiseworthiness are achieved by being a financial failure

There are many more such thoughts I have in mind… my objective is to come up with something of a “Real Estate Investor’s Creed” to keep in mind as I further my own business, and to share it with you for your benefit as well.

So:  What other core beliefs/values should be a part of the serious real estate investor’s daily thoughts?  Please enter your suggestions in the comments area below - and thank you for reading http://realestate.BryanEllis.com!

This morning's jobs report is causing mortgage rates to rise, capping a week during which rates have already jumped 3/8 percent off all-time lows.

The government's November Non-Farm Payrolls report reinforced the notion that the recession is nearly over, if not over already.

Just 11,000 jobs were lost last month -- much fewer than analysts had expected -- as the Unemployment Rate fell to 10.0%.

If it seems strange to be talking economic recovery while Americans are still losing jobs -- 7.2 million since 2008 -- remember that data always needs context.

See, analysts view employment figures as a lagging indicator for the economy. This is because business owners tend to make hiring decisions based on how business has been -- not on how it will be at some point in the future.

The jobs report rarely reflects the "right now". As an example, job loss peaked in January 2009 -- 4 months after the height of the financial crisis.

We saw the same pattern during the Recession of 2001.

According to government data, during the last recession, job loss peaked in October 2001 but the recession ended the very next month. It wasn't until October 2002 that employment went net positive on a monthly basis.

And this is why investors are cheering November's jobs report. Better-than-expected numbers and a falling Unemployment Rate show that the economy is improving.

Unfortunately for rate shoppers, better-than-expected data is pushing mortgage rates higher. Rates are expected to open 0.250% higher versus yesterday's close.

This morning's jobs report is doing a number on mortgage rates, putting another dent in home affordability nationwide.

Despite the slightly flat Unemployment Rate, the government's July Non-Farm Payrolls report reinforced the notion that the recession may be ending soon, if it hasn't already.

Just 247,000 jobs were lost last month -- much fewer than analysts had expected.

Now, if it seems strange to be talking economic recovery while Americans are still losing jobs -- 5.7 million in the last 12 months, in fact -- remember that we have to take the data in context.

Job loss doesn't lead to economic growth, per se, but analysts tend to treat employment data as a lagging indicator. Business is often slow to hire and slow to fire, so the jobs report rarely reflects the "right now".

A terrific real-world example of jobs data as a lagging indicator is that the peak of recent job loss -- January 2009 -- occurred 4 months after the peak of the financial crisis in September 2008.

The same pattern was present during the Recession of 2001.

Government data shows that job loss peaked during the recession in October 2001, 1 month before the recession's official end. Meanwhile, job losses continued nationwide for the next year and didn't turn net positive until October 2002 -- nearly 12 months into the recession's subsequent recovery.

This is what we mean by lagging indicator and it's why investors are cheering today's jobs data. Strength in today's report may be signaling the end of the recession.

Unfortunately for today's rate shoppers, it pushing mortgage rates higher. As stock markets soar, bond markets sink.

Today’s Eeyore Award for most foolishly pessimistic news goes to the National Center for Credit Counseling (NCCC).

Recently, the NCCC released the results of a survey they commissioned.  Frankly, I think the results they’ve come up with are probably unreliable and not representative of the American public.  Nevertheless, the results were interesting, and can be summed up as follows:

• Half of the survey respondents no longer believe home ownership is a reliable way to build wealth
• One third of the survey respondents don’t think they’ll ever be able to buy a home
• 42% of former home owners think they’ll never be able to buy another one
• 31% of current home owners expect they’ll never get to upgrade their current home or buy a second home

Frankly, the National Center for Credit Counseling should be ashamed of itself.  I see a lot of great news here, yet to NCCC, the sky is falling.  So here’s the other side of the story:

• Half of the survey respondents do believe home ownership is a reliable way to build wealth
• Two thirds of the survey respondents expect they will be able to buy a home
• 58% of former home owners expect they’ll be home owners again in the future
• 69% of current home owners expect they’ll be able to buy a nicer home or even a second home sometime in the future

It does seem reasonable that the current economic situation may have soured some people on the notion of home ownership, but I suspect that opinion is based on emotional turmoil rather than a genuine understanding of the underlying real estate market and the long-term trends it embodies.

Nevertheless, it gives rise to an important question:  What real estate INVESTMENT strategies will make the most sense in the near future?  Let us know where you expect the biggest action in the coming years using the poll below:

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In another move displaying the utter idiocy of the federal government, Fannie Mae and Freddie Mac are now again authorized to offer 125% LTV refi loans.

Can somebody out there tell me why this makes sense?  Short answer:  It doesn’t make sense, and this is short-sightedness nearly at it’s finest. (The high-water mark for short-sightedness goes to the Obama stimulus program, which is clearly not working at all.)

It seems it should be obvious that lending significantly more than a property is worth would be a bad idea, particularly since our current financial crisis is due in large part to the overheating of the real estate market due to unwise lending guidelines, but apparently common sense isn’t so common after all.

So now we have 125% LTV refi loans from Fannie and Freddie - both of whom were bailed out to the tune of billions of dollars.  Does anybody else get this?  Apparently not.  I saw this comment about this new policy that was made by a real estate agent:  “why does there have to be a limit at all.  Are folks who are upside down more than 25%, which is millions, somehow less in need or deserving of help????”

This statement was clearly made by someone who is unwise financially.  Financial “need” has nothing to do with good lending guidelines.  Those who most desperately feel they “need” to borrow money are frequently the ones least qualified to do so.  And the notion that anyone “deserves help” from the federal government - which is funded by you and me - is not based in law.  The only way one can “deserve” a loan is to both want it and to be qualified to receive it…not to mention finding a lender willing to grant the loan.  “Need” isn’t (or shouldn’t) be a factor in underwriting, and real estate loans are not entitlements.

(But Barrack Obama’s administration disagrees with this.  It’s clear that the guy has never been involved in business or private industry of any type.)

Lest you think I’m being cold and heartless, remember this:  Our current financial crisis is rooted in poor lending guidelines made by lenders of all types as dictated by the federal government.  Without those errors in judgment, we likely wouldn’t be facing our current economic crisis.  Preventing more of those types of errors in judgments must be the foundation of ending the current economic stress our country faces.

So here we are again, wishing a faux congratulations to Treasury Secretary Timothy Geithner, President Barrack Obama’s hand-picked custodian of the economy.  Or, as Ronald Reagan once said… “There you go again”…

Your thoughts are welcomed, whether in agreement or opposition.  Please use our comments area below.  Thank you for reading RealEstate.BryanEllis.com - the Alternative Media for Serious Real Estate Investors.