Interest Rate Update - FED

The Federal Reserve lowered its key interest rate by one-quarter percentage point but also signaled the seven-month easing cycle may be coming to an end. That brings the federal funds rate down to 2 percent and the discount rate down to 2.25 percent.

This could be the end to the declining interest rate cycle, if only because the FED now has to worry about our declining dollar, which is not helped by lowering rates. Inflation is now also a concern. We will see how all this plays out in the coming months.

The graph says it all...

Back in March of 2007, there were 1189 active listings, 353 homes in escrow and 464 sold... Now, fast forward to March of this year - 2008. There were 1558 active listings, 214 in escrow and 213 closed sales. In other words there were twice as many sales this time last year!

If you are looking to buy a home, now is the time. There is a lot to choose from on the market and deals to be made. Interest rates are very low historically and probable readt to start up soon. Call me for expert help, whether you are buying or selling.

Luxury Townhome in So. Redondo Beach FOR SALE

FOR SALE:

1206 S. Catalina Ave, Redondo Beach, CA., 90277

$1,339,000

This is a beautifully maintained Townhome walking distance to the Ocean, Riviera Village and Pier. It has two bedrooms on the street level and the master is on the 2nd level on the Living area. Up one more set of stairs is the mezzinine office area with access to one of the 3 balconies. This is a must see if your goal is to live near the water.

Call me for a private showing.

New Listing in El Segundo

For Sale: A beautiful Condominium located at

815 Main Street #302, El Segundo, CA., 90245

$509,000.

2 BR, 1 3/4 Bath in 1145 Sq. Ft.. Decorator perfect with remodeled kitchen with black granite counter. Master has walk in closet. Smooth ceilings throughout. This property is very open and bright with skylights in the 2 bathrooms. Elevator, Pool, and Spa. 2 parking spaces and generous storage in the gated subteranean parking. A must see!

Call me for a private showing.

FOMC Cuts Fed-Funds Rate by 1/2 Point

At about 11:15 pacific this news came out:
"The Federal Reserve lowered its key federal-funds rate by one-half percentage point, to 3%, capping an unprecedented eight-day period in which officials slashed rates massively to ward off recession risks. Officials signaled they're willing to ease still further in coming weeks. But they also suggested that the recent cuts may be enough to keep the economy on track. The vote was 9-1; Dallas Fed President Richard Fisher dissented, preferring no rate change."
WSJ.com

If congress also approves raising the conforming loan limits that could really help the housing industry in 2008, by refinancing to low rate 'fixed' loans.

New Listing in So. Torrance at 22420 Warmside Ave, 90505

SOLD in 5 days

South Torrance, area 129, has it all. This newly listed remodeled home is one of the nicest properties in the area. It will be open both days this weekend, Jan. 26th & 27th from 1 - 4pm. It has 3 Bedrooms, 1 bath and a 6500 sf view lot. Walk to beach. Excellent Torrance Schools. $809,000. call for info... 310 346-0391

Recession...

Everywhere we turn lately everyone is worried that we are headed into a recession. Here is the problem, by the time the government economists admit to it, we are already on the mend! The main problem with predicting a recession is that it all comes as a result of 'lagging indicators'. You know as well as I do, the government puts out statistics every month that immediately makes the stock market react and then a month later changes the previous months numbers to reflect something they forgot. How can we ever trust anything we read anymore?

I am going to cut to the chase! WE ARE ALREADY IN A RECESSION. Unemployment is going up, real inflation is up (just look at the price of gas, which is not included in the inflation stats) , consumer buying is down, car sales are down, and housing has slowed dramatically. Anybody agree with me?

Does a recession mean hard times? Not necessarily. Thankfully, the Fed has finally realized that they over did the interest rate hikes during the last two years and have to lower them even faster now. (Again, they raised rates based on "lagging inflation indicators'. I hope they learn their lesson this time.) We can look for rates to go down another full point during the next 6 month. Look for FED FUNDS rate to fall to about 3%.

Remember the old saying: " A recession is when a friend loses his job... A depression is when you lose your job"!

Nationwide Existing Home sales figures

"Existing-home sales managed a 0.4% gain during November, the first increase in nine months, but prices tumbled. Home resales rose to a 5.00 million annual rate, up from October's revised 4.98 million annual pace, the National Association of Realtors said. The median price of a previously owned home was $210,200 in November, down 3.3% from $217,300 in November 2006. Inventories of homes fell 3.6% at the end of November to 4.27 million available for sale, which represented a 10.3-month supply at the current sales pace." (WSJ)