Sep
29
Do We Understand this Financial Mess?
Posted by Charlene Hamilton under For Buyers, General Information, Bailout
For the past several days I have been watching all of the news channels and trying to get a handle on the financial sector of our economy and the pros and cons of the impending “bailout.” From a week of intense commentary on the subject the only thing I feel certain is that there is not a general consensus. As the “experts” are interviewed, each has a totally different view than the next, and no one seems to be able to agree. Are we being faced with a reality of the 1960s where we lived in a cash society? I have heard clients tell me the interest rates on their credit cards have doubled because they had larger than 50% loan to value, even though they are current on their payments. I have seen available credit limits cut in half “just because” even if that credit hasn’t been tapped. Of course mortgages are getting tougher to obtain as the criteria changes - and I’m all for that; but, are we really facing the possibility of no available mortgage money and no available credit? These uncertain times are causing people to pause.
I believe, like Warren Buffet, that right now is an opportunity for those with money. The stock market affords opportunities that we haven’t seen in a long time. The cost of real estate in Reno is, in some neighborhoods, at a 6 or 7 year low. As we all know real estate is cyclical, and it will rebound; if you have money to invest and invest for the long term, I feel you will not only get the deal of a lifetime but the value of that investment will rebound. It’s a win, win as I like to call it. I am now checking the number of homes available for sale twice a week, and we are still stable with the number of homes coming on the market being offset by those going under contract. I heard one analyst say this morning that when the bailout happens it will correct the real estate foreclosure situation more quickly, and he thought there would be a complete correction by late spring of ‘09. So, according to Jim Cramer of “Mad Money” this is your window of opportunity right now!
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