Bernanke’s speech today made it seem that the Fed it set to cut interest rates in the near future to prevent a slowing in growth and ultimately a (insert R word here).
This could be the perfect storm for us RE investors. Lowering prices compounded with lowering interest rates. I saw where many expect the Fed Funds rate to be 3.25 come late spring, which would set the Prime Rate at 6.25. I certainly would have no problem being locked into 6.25 for the next 20 yrs.
Thoughts???
By the Fed continuously lowering rates expect inflation to soar further,the dollar to sink further and consumer goods to hit all time highs…And you are concerned with your mortgage being cheaper?..Get used to $4 a gallon gas/diesel and anything that gets driven by a truck,shipped by a boat,flown by a plane will also go up…Food will be the hardest hit in the coming months amongst everything else…Every cost imagineable will escalate,except for your mortgage… :banghead
The market is expecting the Fed to drop 1/2 point this month. If the Fed starts dropping 1/2 point at a time, how long is it going to be before they’re out of ammo and then what do they do? Have I mentioned that I think the Fed is nuts?
Mike
It will be good for borrowers. Borrow cheaply and repay with devalued dollars.
But it also will feed a bubble in something or other.
It doesn’t get any better than dropping prices coupled with dropping interest rates.
You get to pay back your mortgage with devalued dollars.
We are staring down the gullet of massive inflation, and if The Fed permits it to take off and get ugly, real estate is one of the very best possible investment for inflationary times.
Investors see anything dollar based losing value rapidly and they move into solid physical goods that will hold their value. Real estate and gold are always the winners. They simply float right up with the inflation and keep pace with no problem.
As for food, it’s time to take some of that real estate and plant a victory garden.
The down side to inflation is it makes it very difficult for the tenants to pay their rent, because their salaries never keep up.
The down side to inflation is it makes it very difficult for the tenants to pay their rent, because their salaries never keep up.
Thankfully, everyone in the United States is a VICTIM. So, certainly the government will just print some more funny money and pay their rent for them.
Mike
and if The Fed permits it to take off and get ugly
IF…???..What planet are you living on taterot…Come pick me up and pass me what you are smoking…People are losing their jobs every day…Every industry is either slowing down or at a standstill…Real Estate for sale is languishing on the market forever with no bites unless given away…Banks are freefalling over each other and worrying about the next investigation into their lending practices…Gas is $3.75 a gallon (hi test)…Diesel is $4.00 a gallon…Food costs have soared %25 in the last year,restaurants and every mom and pop business is barely breaking even…Lanlords who pay utilities can’t give away their properties…The stock market has dropped %10 in one month…Bill Gross (Pimco bigwig) is even worried about how long this recession will last,not IF it began yet…And worst of all we have a puppet like Bernake who doesn’t have the brains to realize he is only making matters worse by showering the market with more false hope (liquidity)…And unless you mean stealing real estate for insulting offers buying any way else is like trying to catch a falling knife that weighs 100lbs…