“Why the Bubbles Aren’t Bursting” with Lonnie Glessner
Senior Loan Officer
This was the title of a great story I saw in a recent NAR email newsletter and this story was initially published by Steve Cook at www.RealEstateEconomyWatch.com. Steve discusses in his story the fact that scant home inventory levels and robust demand are driving up home prices at double digit levels in several large cities including Denver, which is what you would expect from the Law of Supply and Demand.
Steve says, “That simple ratios of income levels to prices do not paint a complete picture of buyers’ ability to afford to buy homes. Why? He cites a recent study by 3 Belgian economists that will soon appear in the Journal of Housing Economists that these 2 factors “significantly increase buyers’ ability to pay.” What are these 2 factors?
· The mortgage interest deduction
· Declining mortgage rates
These 3 economists found that “Abolishing the mortgage interest deduction would reduce borrowers’ ability to pay for their houses by 17.65% and would lower home prices by 19.94%.” Second, I know that a 1% increase or decrease in mortgage rates is equal to a 11% price increase or decrease in a home.
So, this begs a question—can mortgage rates drop further? I would say, “yes” if another recession appears soon. It seems that Janet Yellen and the Fed has already decided that negative interest rates are a possibility for them/us, which I expect.
I grew up in a very small town in eastern Washington on a large wheat farm where I learned the values of hard work, honesty, integrity, and the value of a Dollar. I graduated from Central Washington University with an accounting degree, but I quickly discovered that accounting was not a good fit for my personality (extrovert who loves to talk with people and help people). During my senior year of college I felt called into youth ministry and became a youth pastor instead for a few years. I moved to Denver in 1995 to attend Denver Seminary where I graduated from in 1997. After looking for a full-time youth ministry position for 9 months, I decided to go back to the business world of banking and I fell in love with mortgage banking where I have been working since 1998.
From the very beginning I decided I would work by referral and I discovered that if I did an incredible job for my clients they would refer me to their family and friends. 18 years later my entire business is from referrals and repeat business. For a couple years I also became a licensed financial advisor which has given me a far broader knowledge of money and finance and how your home and mortgage fit into your goals and dreams. I LOVE helping people achieve their dreams and goals.
For the last 6 years I have been voted one of Denver’s VERY BEST Mortgage Professionals by my clients and the real estate agents that I work with. This award appears in the September issue of 5280 Magazine each year. I am one of only about 20 Mortgage Professionals who have won this award all 6 years! Then, in September 2015 I was also featured in the Rocky Mountain edition of Top Agent Magazine as being one of the top Mortgage Professionals in our region.
I met my wife at Denver Seminary and we have been married for 16 years and have 2 kids of our own. Our son is 15 and our daughter is 12. In December 2015 we received permanent custody of our son’s best friend who is also 15 after his parents abandoned him. Nick has been living with us since September 2014 and he has been a great blessing to our family. But, at the same time it’s not easy adding a 3rd child to an established family especially when that child is already13 years old. But, we know that this is what God has called us to do, so we are raising Nick.
I have actively coached our son and his teams since he was in kindergarten in baseball, flag football, and basketball which has been a great blessing. When I have free time I love to go for walks or hikes and I often take my camera with me as I love landscape photography. I and my boys also LOVE cars and attending car shows. I recently bought my first show car, a Jag convertible.
My favorite clients are those who are eager to learn about money and how to build wealth using real estate. This can be a first time home buyer, a move up buyer, or a real estate investor like myself. I strongly encourage you to ask me questions as there are NO stupid questions with me.