because I can

Time to move on...

I have moved my blog to www.realtorahead.com. Hope to see you there.

Brian

Man it's dark at 4 in the morning

It’s 4:08, feet hit the deck and my Saturday is beginning. Friend and client Bodo Schmidt and his very understanding girlfriend Cristine has opened his home to the tri club to watch the live webcast of the US Men’s Marathon trial taking place in New York. Start time 4:35 pst.

Bodo has an awesome home theater set up and the athletes were darn near life size. The webcast was awesome with mile split times and very good commentating. We had hopes up for local runners Josh Cox and Meb Keflezighi, but it became apparent fairly early that Josh didn’t have it as he struggled to try to bridge the cap on the first break of about 6 runners and just could not make it.

The sad news of the day came with the announcement of the death of Ryan Shay at about mile 5.5 of the race. Watching the webcast we could hear the siren and after about a minute there was an ambulance trailing the lead group. In puzzlement we were all looking at each other wondering what the heck they were doing on the course. It didn’t seem to disturb the athletes at all and after about a minute and half more the ambulance left the course. It wasn’t until later in the day that I heard the news. Here’s more on Ryan Shay.

The excitement started at about mile 17 with American half marathon record holder Ryan Hall putting the hurt on the lead group. There was not one runner that had the legs to go with him and his winning time of 2:09:02 is not indicative at all of his true time as he spent the mile and a half or so celebrating and high fiving as he about a 2 minute lead.

With the pajama party finishing about 7:00, I headed to the office to do some paperwork and then it was off to Poway to do the Second Annual TCSD Ramona Ramble.

Ramona was founded in 1886 after Amos Verlaque built a store and post office in 1883 on the wagon road to the  mining town of Julian. Ramona was known as the as the “Turkey Capital of the World” when turkey production flourished during the 1930s, and the industry was featured with popular annual Turkey Days celebrations. After the decline of the turkey, Ramona transitioned in to egg production and still is home to the 1,100,000 bird Pine Hills egg ranch which is the 5^th largest in the state. Today Ramona is facing growing development and the agriculture heritage is transitioning to grape production for wine. For information on the current real estate market, go here.

The ramble is an out and back ride with two starting points. One starting from Solana Beach which is about a 60 mile ride with 3000’ of climbing and one from Poway which makes the ride about 30 miles with 2500’ of climbing with the turn and carne asada lunch at Dos Picos Park. There is a 6 mile run up Iron Mountain sandwiched in the ride for those wanting the full monty.

At about 9:30, once the Solana group showed, we rolled out of the shopping center and headed for the climb up Scripps Poway Pkwy. The climb is about 1.6 miles long and starts at approximately 850 feet and climbs to 1500 and is just a touch more difficult than Torrey. After the climb we made the turn on to 67, rode a couple more miles and stopped at Iron Mountain for the runners to their run. Myself and Jessica did not bring running gear so we went off for more riding. Once arrived back at the trailhead there was a small group done with their run, so we headed on to Dos Picos park for some lunch.

Zarah, Denise and a friend of Zarah’s(apologies) had an awesome lunch of grilled veggies, carne and pollo asada, flour and corn tortillas, guacamole, salsa, rice, beans, sodas, water and some of Mike Larson’s homemade brew. While I did not have any, everyone that did gave it a solid two thumbs up. The park was full of old oaks and was empty. It was great to have lunch and  just relax and chat as we laid in the sun.

After about an hour or so, it was back on the bikes, a nice tail wind and we were back in no time. Living on the coast it was nice to ride on nice open shoulders. I have become so accustom to dodging all the pedestrians in the bike lanes on Saturday mornings that I really appreciated just being able to ride.

I would like to thank Mark Kenny for organizing this and again to the surrogate moms that made sure we had plenty of lunch, bars and beverages!!               

             

High Pressure system causes carnage at Borrego a go-go

Borrego Springs 10/20- Sunny. Areas of blowing sand and blowing dust in the afternoon. Winds northwest 15 to 25 mph with gusts to 40 mph.

TCSD's first Borrego a go-go campout, based out of the Anza- Borrego State park campground, was met with a high pressure system in the area that brought some pretty tough conditions for the traditional ride as Saturday progressed. But more on that later.

Borrego Springs sits in the state park and is located in the north-east area of San Diego County. It maintains a year round population of approximately 2800 people and swells to roughly 10,000 in the winter. If you want to find a home for under $200k in San Diego county, Borrego Springs would be on your list. The most expensive currently for sale in Borrego is $1.35 million. Click here for more on Borrego Springs real estate.

I headed out Friday afternoon and after stopping to get a tankful of gas, a couple dogs and a Coke it was time to head out to the desert. The forecast had called for warm temperatures so I packed light, with just shorts and t's, some running and biking gear and the Bianchi.

The drive out was easy even though I had left after 5 and I arrived at the camp it was already dark. Checked in with Matt and offloaded what I had brought then proceeded to find the best spot to set up home.

There were about 30 to 40 people already enjoying the conversation and fire. I have to say it was great to the new faces in TCSD. I met so many people that I wish I could name them all, so I find myself hesitating to name any. But, Jennette with her astronomy knowledge stood out as she named off the constellations. As the night went on the crowd swelled and the fire pit was the place to be. About 12 most people went to bed and while all might not have been, I was entertained by the willingness to share opinions of the few left around the ring into the early hours of the morning.

Woke up about 7 to a beautiful sunrise, Karam G brewing coffee and Matt T and Dave B cooking breakfast. You will never go hungry at a Borrego a Go-Go and while Matt and Alison were rookie planners for this event they did an outstanding job!!! As the camp woke up had breakfast and more members drove in, we could already feel the possibility of how warm it might get and talk turned towards the weather.

The main ride got it together and rolled out to Christmas Circle at 8:45 for the 9:00 start. The wind was already starting to blow, so after asking for and seeing how any first timers we had we decided to have a quick talk. We stressed that the wind was going to be at your back on the way out and not to suckered in to feeling too good as once you made the turn, it was going to be a bear. I call these 'credit card' rides. On the way out it is nice and easy and you are lulled into feeling super strong. But then you make the turn and you are paying principal and interest to get back to the start.

The ride for me ended early as I flatted in the first couple miles. I fixed the flat and after about an hour decided to turn back and get ready to do SAG as the conditions were already starting to get ugly.

I made it back to camp and left with Eric and water to go out on the course. By now the temperature was getting in to the low 90's, so Eric and I stopped  and bought some bags of ice so that riders could have something cold. There was the Salton Sea Century ride going on at the same time on the route and I have to thank them huge for, possibly unknowingly, helping our riders. Once we got out of town and on the course, we could see how bad the situation was becoming.

The lead riders we left alone as they were close to town. We came across, Archie and Christy Fuston who are new members transplanted from Kansas City Tri Club, already picking people up. Then there was Kevin with bikes in the bed of his truck and after we stopped to give ice to some club members we were informed about members further back on the course that were done. Eric and I took off to the century aid station out by the county line. When we arrived we picked up two club members and our plan was to get back on the course and give ice and water to members on the course, drop those members off and head back out. Unfortunately, once we stopped we were informed of more members not doing well further back. So it was back to the aid station and unfortunately we had more people than cars. Fortunately, Gary who is a club member was working the aid station for the century, so we got his car also. Coming back into town, we had 3 SUVs, a van and a F250 full of bikes and/or people. The biggest contribution was the SAG van that was on the road in support of the century.

The wind now was up to a consistent 25-30 with larger gusts and the temperature gauge in Gary's SUV was reading 106. Kevin and I headed back out to drop off Gary's SUV, pick up who we needed to and head back to town. I think in all, of the 80+ that started, 25-30 needed help back in to town. It was ugly out there!!!

We're a resilient group and the weather and ride didn't bring anyone too down, once they got their shower, some food and had a beverage.

I personally had to leave early to get back to a sick dog and take care of some business stuff. I had brought the prizes for the Hill Top Challenge and would like to thank sponsors BnL and Nytro bike shops and Ironman coffee for their contributions.

Again, Matt and Alison did an outstanding job. I would also like to thank everyone who went out in support of the riders on the road and to all of you that brought food, gear or stuff to make this a great social outing!! I hope the challenge of the weather does not discourage anyone from our next trip. Lastly, if everyone could take a second and send a thank you to Larry Gitman and Jim Knight from Shadow Tours for not turning our members away that would be greatly appreciate by the club board.

See you in '08.

After this was first posted the fires started and are currently burning out of control. Our prayers are with the residence and emergency personnel.

You too can make $170,000 a year from home

In today's San Diego Union Tribune, they listed the 5 most appreciating neighborhoods in San Diego for the third quarter with Encinitas ranking #1 at 21.7%. If you follow their chart, the home you purchased in 2006 for $772,500 is now worth $940,000 which if my math is correct, is a cool 170 large for doing zip. They say real estate is the ultimate wealth builder.

The unfortunate thing with this article is anyone who works in real estate, has been trying to sell a home in San Diego County, and beyond, or has purchased in the last couple years knows this is crap. So to show you the value of my services and why working with a competent REALTOR is so valuable, I am going to do a quick breakdown for you.

First, north San Diego county went through a huge building period over the last several years and the impact of this is on overall statistics is where we need to start our process.

The home above is in Encinitas Ranch which was built after 2000. Many of these owners have realized their capital gains write off and have been selling. So much so that when looking at the third quarter of 2006 Encinitas had 21 homes out of 115 that sold for 1 million dollars or more which is 18%. IN the third quarter of 2007, 40 of the 114 homes sold were over 1 million dollars which accounts for 35% of the homes sold. That's our first clue that the the 21% appreciation is not appreciation but a difference in product. If Ford started selling Porsches under the Ford umbrella, does that increase the value of my Escort?

In order to look at the full impact of the newer homes on the resale market we should take a look at how the average home in Encinitas has performed for the same quarter. Searching for a 3-4 bedroom 2-4 bath home up to 2000 square feet built before 1995 we see the per square foot value in 2006 is $435. So with a 21% appreciation rate we should expect that value to increase to $526. Based on the average of house at 1768 square feet, the UT says you just picked up $161 THOUSAND dollars. Nothing short of brilliance on your part. But wait... the reality is in 2007 the square footage value is actually $416 and you just lost $34,000!!! That's almost a $200,000 hit and you're in trouble. The bright side is you only are taking a potential hit of 4%. Check out the heavy hitters who bought those million dollar new construction homes.

When looking at the 3rd quarter statistics for home built 2000 or later we find twice the home, average is about 3500 square feet, and twice the  misery. In 2006 these homes averaged to be a 4/4 3600 square feet and sold for approximately $447 a square foot. So let's plug this number into the UT fantasy creator and see how rich we are today; that's 1.6 million x 21% = 1.947 or $339,000 in pure PROFIT in a YEAR!!! That new Escalade is going to look so cool pulling the jetskis!!

But let's plug our numbers into the Brian Long fact finder before we buy that new car. When we take our same search parameters and apply them to 2007 we get a square footage price of $380. Yes,$380. So let's plug in $380 x 3600 sqft.= 1.368 million which is a 14.5 % loss.

I do not know why a publication like the UT would print something like this when probably half of their staff knows it is not an accurate portrayal of the real estate market. I continue to believe there is value in purchasing within your means, just make sure you are working with someone who is ethical and willing and smart enough to take the time to research and educate you. If you do not have to sell get your home off the market. If you have to sell you need someone you can trust to get you the most out of todays market. If you do not trust them enough to price the home for you then find another REALTOR who you believe in, but you have to be opened minded and let the professional guide you through this market. Call me at 760-415-3329 or email me at brianalong@msn.com

Peace...........

Good times and Sad times as 2007 Aquathlon season come to a close

It's never good when you start a post with a tear in your eye and a heavy  heart. Looking back through the pictures from TCSD's 2007 aquathlon series and searching through the memories, keeps bringing me back to the loss of Jim. For me personally the strongest memory I have is the day Jim spoke to me about starting these races and asking if I would buy the pizzas as part of my sponsorship. It wasn't the money for the pizza, it was his reply to, "how much are we going to charge for the races"? After knowing Jim for a couple years, I should have known the answer, nothing. "But what if they're not members of TCSD"!? Not a word was spoke. Just the wry smile and a chuckle that suggested I should know better. I miss you and will always be blessed to have had you as a friend.

May's race was greeted with cool temperatures, a coastal eddy and alight chop. Jim had 85 people, I was at 75 and I believe Dave was close to me with 70. We were all not even close with about 115 participants suitin' up for the swim. We`saw some fresh faces at this race and a podium that turned out to be one of the few that was led by Caue Suplicity, pictured above and collegiate stand out Amanda Felder, who are both exceptional athletes.

We rolled into June and the normal 'June Gloom' was non existent. The gods were shining early on our race. Unknown to anyone, there were dark clouds forming.

The race had perfect conditions with sunshine, light surf and the water temperatures breaking in to the mid 60's. Caue Suplicity started his reign of dominance at the events and is pictured above with Jim in what would be Jim's last Aquathlon.

Two weeks after the June race, my phone rang early in the morning. It was a message from Bill Gibbs and I knew it couldn't be good, but would have never guessed what he had to say. I immediately returned the call to be told of Jim's passing the night before. As we did all things necessary and that were asked of us, we finally turned our attention to the club and the races.

  Initially the July Aquathlon was going to be canceled. We, myself, Bill who was now acting TCSD President, Dave Huff and many others were just drained. But as time went on and with some encouragement from funky dude and Competitor Magazine editor Bob Babbitt, we knew the right thing to do was hold the event. Bob Babbitt came up with the McMannman concept and it took off from there. Shirts were made, food was  ordered and it was time to celebrate!! Really, in order to honor Jim there just had to camaraderie and food. We had an abundance of both with close to 400 people and a boat load of Italian food and NY cheesecake. Jim's favorite.

Cresting the hump we headed in to August with Dave and myself running the events. Our mantra was and remains, don't scew this up :-).

To be quite honest with you all, I don't recall much of the August race. I think I was still spinning with the new responsibilities I was assuming with the club. Additionally, Bill's mom was very ill, it was just a moment of time that passed  and didn't really leave a mark. Which is actually quite good considering. I do know that the August aquathlon produced the one picture that encapsulates the whole Aquathlon TCSD scene for me. It is this picture of super cool and amazingly warm and gracious Ironman champ Kate Major. Here she is going toe to toe with a male member and he's about to be chick'd at the finish by one of the greats and she is just loving it. She gets it, big smile tongue hanging out, and this is what it's all about, friendly spirited competition.

September's aquathlon was scheduled by the national weather service to be a washout. Fortunately they maintained their streak of well, being not so accurate.

We had about 110 athletes show up for the start and the men's field was stacked with pros Emilio DeSoto and Jim Vance. The top women featured Amanda Felder as well as club members Laura Kephardt and Robin Grandl. The biggest difference for this race over the others was that the sun was going down much sooner and it was getting cooler. We finally broke out the stove and start serving clam chowder to help everyone warm back up.

This brings us to the end.

October's race was defined to me by all the dogs, I think I counted 9  total, and the athletes scrambling to get to the start because we had to start on time with the time change looming.

The water temp was a perfect 64-66 and visibility was a solid 35 feet. With about 115 athletes hitting the starting line we had the best year ever for participation. As usual Dave Huff was in the thick of it not only as the race director, but here he is getting ready to paddle to make sure everyone is safe on the course.

We also had Osamu of OPIX out in full force taking pictures of the athletes, so make sure you go to the photo gallery to see yourself in action. Also Daniel Derkas, who takes care of the beverages was there shooting.

Before the start of the event we took a moment to recognize two of the many great volunteers that make these events possible. They were Elizabeth Daubner who hand makes all of the desserts for the events, including awesome pumpkin pies for the October race, and Denise Pitre who is the food guru.

I would like to thank everyone who has helped make these races possible. I  know without a doubt it is the collective energy by everyone, the volunteers and the athletes, that make these events special. I wish I could name everyone, but the few names that I can come up with right now are Dave Huff and Cory Osth who are the race directors. Bryan Chadwell, yes the man pictured is in charge of saving your life if you swim in the ocean off San Diego, feel better?, who has helped with the swim and the city, Lynn Trimble who takes care of the timing along with John Hill, Zarah Lawson who has served along side Denise and sooooo many others. Again I apologize for not being able to name each of the great volunteers who have helped set up, break down, take care of the timing and more!! We hope to see everyone back next year along with new faces. If you have enjoyed these events or would like to become more involved with a great group of people go to the TCSD website and join. We have some great things coming in 2008!!

The end!!........

November duathlon to go off road in Carlsbad's Calavera Preserve

The first event of the Triathlon Club of San Diego duathlon series will be an on road/ off road event. The event will be centered around the Calavera Preserve. The preserve was the source for much of the rock that built the Oceanside harbor and the lake was the water source for the city of Carlsbad until the mid 1960's. Today the preserve only makes up part of the total open space that remains between Carlsbad, Oceanside and Vista.

TCSD duathlon race directors Suzanne LaRosa, Tyler Ives and I went for a course preview today.

The event will start in the parking lot of Calavera Hills middle school in  the new Calavera Hills community on the border of Carlsbad and Oceanside. The run will be a 2.2 mile loop around the lake on hard pack trails and is fairly flat. Here are a couple video showing what to expect on the course.

The bike course is a 13.8 mile loop that will take the riders from Carlsbad, through Oceanside, into the Shadowridge community of Vista and back in to Carlsbad. It is 99% right hand turns, except for one left, on great roads with shoulders and bike lanes. It is a challenging course however that is either going up or down. There are no real flats so be ready to do some work. The last climb coming back to the transition is Torrey Pines in quality. About the same elevation gain but shorter.

Here is Tyler's account of the preview.

This should be a great event to start the 2007-2008 TCSD duathlon series. See you there 11/10. Keep an eye on the email list and website for all the current information.

The real estate links update daily as new listings come on the market so please check back if you have any interest in those areas. Also feel free to contact me with your questions or if you would like any additional information.

2008 San Diego triathlon series season ends for 1600+ athletes

The 2008 San Diego Triathlon series came to a close today on a high note of great racing conditions and friendship.

Each year the race weekend starts with an off site expo at Paradowski's swim shop in Kearney Mesa and this year was no different. XTERRA wetsuits was offering a 50% discount on suits, Tobi from ART of TRI had his 100% organic cotton casual wear on display and there were many other vendors and businesses there.  It was especially nice to see my good friend Dee Dee McCann of wetsuitrentals.com back at the expos after the unexpected passing of her husband and the tri community's great friend, Jim McCann.

The race venue opened at o'dark thirty(5:00) with the wave starts beginning at 6:30 and going through 8:30. I believe there were 12 waves total. The water in the bay was a wetsuit perfect 65 degrees, super glassy and I loved the swim start. It was a water start done 'drag race' style. It was a  perfectly straight 500 meter swim and this combined with the water start made the swim tussle free.

I personally have not raced in over a year and I was stoked when I came out of the swim towards the front of my age group. It ended there however. I was talked in to doing the race at the last minute and bought a new Felt B2 the night before.   We didn't have time to get it fit properly, so while it was super fast and stiff, I had trouble staying aero. That combined with spotty training had my race goal nothing more than a finish with a smile!! The bike course was very flat with a loop around Fiesta Island being the highlight. There are quite a few little weaving turns and some water in the parking lot of Sea World to pay attention to, but it is an incredibly safe and beginner friendly bike leg.

Hitting T2 we racked the bikes and headed out on a single loop 5k course with the Ingraham street bridge being the only 'hill'. It's a great course that winds it's way around the bay on concrete running paths. I have to say   that for all the people on the course, both running and biking, I saw no drafting and everyone seemed very aware of what they were doing and their fellow athletes. I had to stop during the run and have a friend document that I really do race, if only occasionally. Plus, I had to give my fellow age groupers some time.:-)

The after race expo featured a beer garden and some great calypso music by Bill Harris and his band. With the year ending, Stewart from Imaging Healthcare Specialist raffled off an Xterra wetsuit, won by TCSD club member Rick Laird, seen here sporting his McMannman shirt, while Erica Rios won the Kuota Kalibur frame.

Once the raffle was done the awards ceremony started and the Triathlon Club of San Diego was represented well in both the female and male age groups. I was hoping that I could steal a set of results sheets to keep all the names straight, but.. So here goes what I remember. I will update this post if I am made aware of my mistakes. Top finishers were Paul Todd, Clayton Griessmeyer, Brad Golden, Craig Zelent, Greg Zack, Anita Flagg, Bob Babbitt, Neily Mathias and husband and wife team, Barbara and Mike Olson. Think their kids  are fast?

The women's podium consisted of all locals. First place went to Susanne Davis with a 58:46 followed by perrenial local podium finisher Misako Win and  third went future club speaker Katya Meyers.

The men's podium had a very familar face at the top, Caue Suplicy who has now won this event for the last three years. His finish time was 50:56. Erik Nau and Luke Walton from Breakaway Training finished second and third respectively. All the results can be found here.

I am so very glad my friends pressured me in to doing the race. I had a great time and was able to go to my favorite restaurant in Pacific Beach. See many people think of Pacific Beach as a drinking college kid crazy place. It actually is a great beach town with some great neighborhoods, beachy  architecture, surrounding communities and, well, crazy drinking college kids.

But PB to me is Wienerschnitzel. See when I was a kid my gramma used to take for chili dogs, so they are  personal comfort food. Even though this a franchise, there aren't many in north county, so when in PB I get two dogs and medium Pepsi. Heaven!!

As a sponsor of the San Diego Triathlon Series, I would like to thank everyone who participated this year!! I love being affiliated with these events and getting to know and spend time with so many great people!!! 

Lastly, have to pay the bills, if you ever need help with residential real estate, even just needing a question answered, shoot me an email at brianalong@msn.com or give me a call at 760-415-3329.

How not to photograph the San Diego skyline

This is what the San Diego skyline looks like at 4:30 in the morning while driving down I-5 and taking a picture throught your windshield in route to the Superfrog triathlon.

Safe? NO. Worth trying? Absolutely!!

September storm no shows the Triathlon Club of San Diego Aquathlon

Thursday's aquathlon looked doomed when early in the week the weather forecasters were predicting a  strong summer storm beginning Thursday and lasting through the weekend. After living in southern California for 99% of my life you get used to the forecast being wrong, but my optimism was fading when it had rained over night and the forecast Thursday morning was still calling for rain and up to 20 mph winds.

Fortunately the forecasters were completely off base and Thursday turned out to be a beautiful day in and out of the water. There was a light breeze, air temperature was in the low 70's while the ocean temp was a wetsuit swim perfect 63-65 degrees with about 40' visibility. I went for a pre swim and could see the bottom all the way to where the shelf drops off. It was magical with the light rays filtering through the ocean!!

Now with summer winding down and school back in session, the beaches have been turned back over to the locals.  During the summer we usually struggle to find a place to put the gear because the beaches are so crowded. It's nice to have our beaches, freeways and parking spaces back!!!

Registration got under way and with about 110 athletes we started the event a little earlier than normal due to the change in sundown times. Our membership director Michelle Panik, seen here with her pal Louie from his view point, did the course talk and we were off for the walk down to the Marine room for the start. There were a couple athletes that missed the start, so here is fair warning that we will be starting about 6:10 for the last event in October on the 11th.

As usual the start went off without a problem and coming third overall out  of the water was club member and top age group racer, Laura Kephart who eventually went on to a second place finish behind Amanda Felder. Rounding out the top three women was Robin Grandl. Here is the womens podium proudly displaying the rice krispie medals. Remember, they may only be rice krispie treats, but you can say your trophy case contains at least one trophy shared with Kate Major!! Congrats!!

The men's field had some faces familiar with podium finishes. Jim Vance led the way followed by up and coming XTERRA`racer, following in the footsteps of his coach, James Walsh and San Diego's own longtime stud, active wear designer and wetsuit innovator Emilio DeSoto. Thanks guys for the great race and best of success at Kona Jim. I know, I know, you're only going for the experience this time :-)

As the transition, is this not the best transition area in the world!!, changed from remote setting to back to the athletes village the pizza and pasta Italian buffet began. Our special tonight with the cooling weather, was New England Style Clam Chowder and again,

                                                        Elizabeth Daubner killed it with homemade cheesecake and chocolate cupcakes!! In the Aquathlon tradition, it was a great night at the world's best free race venue topped off with outstanding friendship. Thanks to everyone from the volunteers to the athletes who make these events spectacular!! See you in October for the last event of 2007.

I will be adding more video clips. Have to get to work and pay the bills.

Diane Black and Dave B. out warming up

Here are the first swimmer finishing and getting ready for the beach run.

Here Stacy Peterson has made the turn and is heading back to the pier for her second lap.

James Walsh, the second place mens finisher is seen here running down Amanda Felder who won for the womens. Time to work on that swim James!!

Fed rate cut should have little impact on mortgage rates

Well the FED today lowered both the Federal Funds Rate and the Federal Discount Rate from 5.25% to 4.75%, but this should have little impact on mortgage rates. The reason for this is that mortgage companies have a liquidity problem. They don't have money to loan so therefore they are charging a premium for the money they have. Why don't they have the money? Without insulting anyone's intelligence let's take a quick look at how a mortgage works and how the companies make money

First, company A writes you a home loan for $100,000 over 30 years. At the end of the 30 years it is worth $285,000 from the interest being paid. The mortgage company write mortgages, not holds mortgages. So they sell their $100,000 mortgage on the secondary market for $150,000. This gives them their $100,000 back to write more loans, $50,000 for profit and the other company assumes the RISK and has the potential of earning $135,000 profit. Here's  where the liquidity problem lies. The secondary market is stuck with the risk, so they are not buying the loans the mortgage company is writing. So now the mortgage company doesn't get their $100,000 back. Now they can't last with out cash, because without cash they have nothing to loan. So they increase the interest rate making the potential pay off more attractive to the secondary market. This also allows for more money sooner, thus helping to off set some of the loss if the buyer defaults.

Here is the definition of the secondary market from ABOUT.com;

The secondary mortgage market allows banks to sell mortgages, giving them new funds to offer more mortgages to new borrowers. If banks had to keep these mortgages the full 15 or 30 years, they would soon use up all their funds, and potential home buyers would have a more difficult time to find mortgage lenders.

So there you have it. Hope this made`sense and wasn't too boring. If you have any questions or need any help call me at 760-415-3329.