Ben Bernanke Spoils the Urgency Argument for Home Sellers

Reblogger Lenn Harley
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

JOHN GIVES THE FED TOO MUCH CREDIT.

I'm not so sure that prospective home buyers determine their buying schedules by the action or inaction of the Board of Governors of the Federal Reserve and what Chm. Bernanke says.

I suspect that their buying motivations are job transfers, family needs, don't want to rent, move for family, move for schools,  and their personal budget which takes a hit each time they buy a gallon of milk.  etc.

Real estate market is fueled by consumer need and ability.

Real estate market is slowed when folks are scared to death that the country is going to Hell in a hand basket.

Grocery Shopping

 

Well, after buying groceries this week I believe we should cancel our home buying tour this weekend.

Original content by John Mulkey

woman thinkingJust when you think the housing market can’t get more difficult, Ben Bernanke spoils the urgency argument for home sellers. The Fed’s recent commitment to maintain historically low interest rates for the next two years has erased hope for many who were waiting for buyers to purchase due to concerns over the potential for rising rates. Additionally, concern over falling home prices has many buyers confident that playing the waiting game is to their advantage. And with conditions as they are, it’s hard to disagree. 

 

Overall, this is not good news for sellers—and not good news for the rest of us either—but it appears that “fence-sitters” can relax in the knowledge that super-low interest rates aren’t going away in the foreseeable future. In fact, rates could get even better, with some predictions that we might soon see rates for 30-year fixed loans in the 3’s.

 

What this tells us is that the Fed is very much aware of the weakness in the economy and the significant potential for another recession. (It’s my opinion that we’re already entering that the second recession.) With the economy continuing to weaken—increasing job losses, stagnate or declining wages and consumer confidence virtually erased—the future of the housing market in many areas remains bleak. Yet while the Fed’s actions were intended to aid the economy, the end result for housing will likely be additional slowing of the market.   

 
 

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Topic:
Mortgage / Finance
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Comments 9 New Comment

Rainmaker
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Nicholas Goglucci
The Listing Whisperer
South Florida Real Estate & Development, Inc.

Congratulations - This post is now featured in Silent Majority Group of Active Rain!

August 23, 2011 08:30 PM
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Lenn Harley
Real Estate Broker - Virginia & Maryland
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

Nicholas.  Thanks.  This was only a reblog, but made a point.

August 24, 2011 05:53 AM
Rainmaker
1,169,462
Jay Markanich
Home Inspector - servicing all Northern Virginia
Jay Markanich Real Estate Inspections, LLC

I felt it real time and didn't need a news report to tell me that July had stalled from the previous month.

August 24, 2011 07:12 AM
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Charlie Ragonesi
Homes - Big Canoe, Jasper, North Georgia Pros
AllMountainRealty.com

I guess there are winners and losers with any action the Fed takes. persoanlly I think it was a good decision and willlead more people into the home market. As they recover low rates will keep homes affordable. So the trick is to recover

August 24, 2011 01:55 PM
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Lenn Harley
Real Estate Broker - Virginia & Maryland
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

Jay.  In my experience, real estate usually goes fairly dorment in August.  This is worse.

Charlie.  We'll see.  We'll see.

August 24, 2011 02:07 PM
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Lenn Harley

Real Estate Broker - Virginia & Maryland
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