Fed Cautious on Housing Recovery: The “On the Street Translation”
Posted by shallis on June 25, 2010 · Leave a Comment
Bloomberg Businessweek staff report Michael Wallace says, “The Fed Sounds a Cautious Note on Recovery”
The central bank commits to ultra-low rates for an “extended” period amid Europe’s economic weakness and problems in the U.S. housing sector. The economic data have not prompted the need for any wholesale changes in the Fed’s outlook, though the housing outlook certainly weakened given the 2.2 percent drop in May existing home sales and the 32.7 percent plunge in May new home sales, to a record low this week.
For the full article, see Bloomberg Businessweek.
………………………
Now the Reality by Sean T Shallis, “Senior Real Estate Strategist” of Weichert Realtors and The Shallis Groups’ “On the Street Translation”
By the numbers
Existing home sales in the Northeast region were off by over 18% for the month of May 2010. New homes sales were off by 33 % and the “ever popular” housing starts dive 10%.
Ok Sean… “Do you have a crystal ball or something?” Sure, because only the “educated and informed” will win in the third and fourth quarters!
March 31 2010: US Government stops purchasing Commercial Mortgage backed securities. They are, basically, the life blood of the secondary mortgage market, outside of Fannie, Freddie, Gannie and FHA and even Veterans Administration home loan program, which is now making a strong come back.
Federal Reserve announces: Discount Window to return to “24 hour” repayment policy. During the height of the credit crisis the Federal Reserve eased the terms of repayment for banks and financial institutions to (30) days. “On the street translation”, when your account is over-drawn, you borrow from the bank. When your bank is over-drawn, they borrow from Uncle Sam!
Ben Bernanke basically said, “We’re tired of supporting the housing market. You kids need to go back and re-establish your own secondary market in the private sector. Uncle Sam can’t afford to keep everyone on the payroll or bankroll.”
April turns out to be an interesting month. Obviously the first and second time buyers tax credit expired on April 30th. Here is the rub on this…April sales volume surges 21% and May dives 18%. “On the street translation”, it’s pretty simple math ..I count this as plus 3%!
Sean, “on the street translations” are great… The real question is, “What about my home or personal situation?” Right. We’ll always have buyers and sellers, providing we can educate each side to a point at which they feel “confident and comfortable” in their buying or selling decision into a fair market transaction for everyone involved.
If you or someone you know is looking to buy or sell a home or building in this unique and ever changing real estate economy…Don’t do it alone…Contact me and let my group and I help your colleagues, family and friends be “confident and comfortable” in your decision making process.
As always, the call is “FREE”! Call me immediately at 1-800-295-5995 Ext. 911.
Sincerely,
Weichert Realtors and The Shallis Group
Our combined mission as a team is to provide our customers with a passionately motivated and committed team of highly skilled real estate professionals. We’ll work with you to understand and accomplish our customers short and long term goals both “in and out” of the real estate transaction.
![Regional Map [NJTransit]](http://www.njtransit.com/images/hb_final_1031.gif){kind=link}