Once again, the Feds dropped interest rates another 0.75% today.
The U.S. credit crunch has sent financial markets swaying and stock prices to some new record lows. But the Federal Government’s priority has clearly become a balancing act to heal the nation’s real estate markets, which have been in recession for more than a year through most of the country, while simultaneously aid the financial markets. But the shift has clearly occurred as the nation’s economy has worsened away from real estate and into the overall economy.
Ben Bernanke has promised to use all the resources available to “fully employ” their authority to alleviate the foreclosure “epidemic”.
Japan experienced a real estate deflation for 16 years with little change. It’s difficult for analysts to determine whether the U.S. real estate market is in a similar free fall, but at least several housing markets remain relatively healthy.
Many seasoned real estate investors are actively buying property. They believe that we are near the bottom in many markets and are confident enough now to get off the sidelines and back in the game.
The Federal government is now in crisis management mode in an attempt to resurrect the markets. It will take three to nine months to measure any change from all the recent interest rate cuts, but analysts believe the Feds arrived too late to make a major difference. In the meantime, savvy investors are jumping in and picking up good real estate deals in healthy markets around the country.