Federal Reserve Keeps Interest Rates Steady

I was waiting..and waiting..and waiting to write a post about what the Federal Reserve should do about interest rates and had to stop pending their announcement. I did not want to venture a guess and it’s a good thing that I did not. 

Although reducing the rate may help out some homeowners and borrowers, especially those with Home Equity lines, it could actually have an unwanted effect and result in higher mortgage interest rates for the rest of us.

Luckily, I bit my tongue in trying to hurry a post and make a prediction. In a statement that was released yesterday…

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.

Strains in financial markets have increased significantly and labor markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.

Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.

The downside risks to growth and the upside risks to inflation are both of significant concern to the Committee. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh. Ms. Cumming voted as the alternate for Timothy F. Geithner.

I guess the Fed needed to quickly make an announcement and move on to bigger and much more pressing issues. Like what in the world are they going to do with AIG?

I’ll keep you posted.

Analysts Call For Continued Housing Price Decline

If you are seeking to sell your home, you may want to take notice of what is going on in the financial markets. The pricing of your home will most assuredly be affected, that is if you have a real estate agent who has any clue as to what they are doing.

The collapse of Lehman Brothers Holdings Inc and takeover of Merrill Lynch & Co Inc will cause liquidity in the credit market to shrink, resulting in lower home prices, prominent U.S. banking analyst Meredith Whitney said.

The Oppenheimer & Co analyst also expects fewer mortgages to be available for prospective homeowners, as she sees no hope for the return of the mortgage securitization business.

“All this creates a recipe for meaningfully lower U.S. house prices,” Whitney said.

The magnitude of houseprice declines in the next few years could likely exceed expectations of both the markets and the companies, she wrote in a note issued late Monday.

“The fact that all banks under our coverage have unrealistic HPA (housing price appreciation) assumptions will in our opinion lead to a material and protracted writedown and capital pressure scenario for banks well into 2009,” Whitney said.

Since the onset of the credit crisis over 14 months ago, less than $100 billion worth of mortgages have been securitized and, accordingly, homeownership stands at 68 percent, Whitney said

Why Should You Ignore The List Price Of A Home?

So much is made of statistics saying one thing and real estate agents saying another. But the numbers don’t lie. They may tell a story that an agent doesn’t want to hear, but they most assuredly don’t lie. Sellers listen up. If your home isn’t selling you had better make sure that your agent isn’t ignoring relevant market data.

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The Deflationary Crisis And Its Affect On The Housing Market

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Mad Money’s Jim Cramer of The Street.com is saying that the Federal Reserve is ignoring the current U.S. deflationary crisis and is trying to “reinvent” the economy by actually destroying it.Those are some pretty strong words but then again, Cramer has not been one to be shy about stating his opinions.

“If the government used home prices in the CPI reading, you’d see the biggest deflation since the ’30s”

Cramer predicts another 10% to 15% decline nationwide, and 40% to 50% peak to trough declines in bubble markets. He calls the Fed “reckless” and actually goes further and says that the Fed is a “radical right wing” organization.

What does this mean for those in the real estate business and for those in the market for a new home.

Well, that depends upon who you talk to. Real estate agents who primarily “list” homes and do little else are in for a tough time in the near future if Cramer’s predictions hold true. Accordingly so will the seller clientele of these so called “listing agents”.

If prices continue to trend downward as Cramer and other economists feel is likely, it will become increasing hard for listers to actually sell homes. If the market continues to decline as Cramer says and it drops an additional 20% or more, you are going to find sellers wiped out and in order for them to sell they may have to bring large sums of cash to the closing table. Read more

The Top 10 Reasons You’re Not Getting Any Offers On Your Fort Lauderdale Real Estate Home

Have you asked yourself why you’re not getting any offers on your Fort Lauderdale real estate home or condo? Well the answer is really pretty simple. Either you as the Seller are not doing what your agent advised you to do, or your agent either does not know what to do in order to get your home sold. I don’t like to mince words. I like the direct route. It may not be popular, but it’s the truth.

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40% Or More Of Homes Sold Are Foreclosures Or Distressed Properties!

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While actual home sales may have had a modest gain this past month, the gain was bittersweet as it is attributed to the declining prices in many markets across the USA.At least a 40% or more of the homes sold nationally last month involved foreclosed homes snapped up at bargain-basement prices or homes sold at a loss by lenders or owners who had no alternative, according to the  National Association of Realtors.

These so-called distressed sales helped depress home values across the country, feeding into a downdraft that is making it increasingly difficult for many Americans to sell their homes for more than they paid. This “upside-down” phenomenon is being felt by many homeowners who now find that because of declining values their homes are now worth a lot less than they owe on them.

Nationally, prices of previously owned homes were 7.1 percent lower in July than a year earlier, the NAR reported on Monday, with the median value falling to $212,400, from $215,100 in June.

And there were signs that prices would continue to spiral downward for months to come. The number of homes and apartments for sale jumped 3.9 percent in July, adding to the supply glut that has bedeviled the housing market for months.

“It’s cold comfort to know that the banks are succeeding on selling their houses at prices that are pretty breathtaking,” Read more

Whaddya know? Pricing Your Fort Lauderdale Home Or Condo Right Actually Does Work!

While there may indeed be that speck of white light in the tunnel, I would not go out and make plans to celebrate just yet. Based upon numbers released yesterday from the Florida Association of Realtors the sales of existing homes increased in the Fort Lauderdale real estate market and throughout Broward County by 4 percent in July.

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Fort Lauderdale Homes : Absorption Rate Indicates 23 Months Of Inventory

If you are looking to buy a home in the Fort Lauderdale real estate market or if you are looking to sell a Fort Lauderdale home, there is a key stat that either party should avail themselves of. That stat is called the “absorption rate”.

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I Guarantee To Sell Your Fort Lauderdale Home In 30 Days Or Less

Do you know how long it will take to sell your Fort Lauderdale home in this current market via conventional sales methods? Are you prepared to wait 6 months or more to see the sold sign in your front yard? Well if you can’t answer yes to either of these questions, you may want to re-assess what you and your current agent are doing to get your home sold. In fact, you may even want to fire your current real estate agent…if you even can!

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How To Ensure That The Short Sale On Your Fort Lauderdale Home Is Approved

It seems that everyone knows at least one person in the Fort Lauderdale real estate market who is in foreclosure. It can also be said that if you know someone in foreclosure, the chances are someone has mentioned a “short sale” as the key to unlock the foreclosure prison.

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