BURNSONIAN THEORY: Did the Fed do right?

fburnsblog — Fri, 14 Dec 2007 20:19:39 +0000

Earlier this week the Federal Reserve Markeing Committee (“Fed”) lowere the Federal Fudns Rate by 25 basis points (“BP”). The Market expected a 50BP reduction. They, also, created a28 day auction with the EUC for the U.S. Dollar (“$”). They beleive that this will slow or stop the recent declinein the value of the $. this is a 2 way street. By loosing value it made the cost ou U.S. made good to be cheaper in other countries. This would have the effect of creating manufacturing jobs here. However, the Auction is created to support the $. And, therby continuing the debtor nation trend of the last seveeral decades. In my. over, 35 yeas as a Real Estate (“RE”) professional, I have observed that when people are working the buy RE. Therfore, I’m no sure of how good the Fed move is going to be for RE in the U.S.

What do you think?

Mean time the Commercial RE Market is strong. With Cap Rates up approximately 10% this year over last. Beleive it or not, the Residential Market is showing signs that the Buyer are out there looking for deals. Open Houses are reporting moderate to good traffic. However we beleive that the prices of Residential resales is down approximately, 20% over the last 30 months, with at least another 10% to go by mid February, 2008.

Because of the low interest rates on home loans, the overall price paid for a property is low than what we “guess, it will be in mid next year. We expect the banks to increase rates to cover their loses from the S-bPrime debacle.

Call me, toll free, at 800-897-0006. I’d enjoy speaking with you about these & othere RE related topics.

Welcome to my new blog!

fburnsblog — Wed, 12 Dec 2007 17:14:38 +0000

Hello and welcome. I am a Real Estate professional in Southern California. I specialize in the San Fernando Valley.Here are some links you might find useful…
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Frank Burns Real Estate Blog

BURNSONIAN THEORY: Did the Fed do right?

Welcome to my new blog!