All About Realestate

By Wantanee Khamkongkaew

Since July 2007, the U.S. sub-prime mortgage problems and the increases in credit spreads over government bonds have triggered concerns about a global credit crunch, and caused global stock market volatility.

However, financial institutions in Asia are in a relatively good position with respect to the credit crunch since they have less exposure to sub-prime mortgage instruments than those based in Europe or the US. Some foreign capital is being redirected to Asian property markets, seeking to benefit not merely from the natural appreciation of real estate in dynamic economies, but also from appreciation of Asian currencies against the US dollar, particularly the RMB.

Foreign investors have shown no sign of scaling back Asian real estate investment activity, especially given the relative scarcity of investment grade properties. The combined value of the quarter”s ten largest investment deals in Asia amounted to US$9.3 billion.

In Singapore, a total of S$15.69 billion worth of investment transactions was recorded in the third quarter, a y-o-y increase of 94%, reflecting continued strong local and global investor interest in office properties as well as Singapore”s positive economic fundamentals. The main market drivers were office transactions and continued activity by developers adding to their land banks. At S$40.95 billion, total investment sales in the first nine months of 2007 have already exceeded the total for 2006 as a whole by 34%.

Investment activity in the office sector more than quadrupled q-o-q in the third quarter, with the S$6.83 billion in transactions accounting for 43.5% of investment sales. With rents at an all-time high, REITs and foreign funds remained keenly interested in prime office properties. The sale of Chevron House (formerly Caltex House) to Goldman Sachs for S$630 million (S$2,783 psf) set a new benchmark for office transactions. The sale ranked tenth in the list of the top ten largest investment deals.

CapitaLand divested its interest in Wilkie Edge, a mixed development including office space, to Capital Commercial Trust for S$182.7 million. CapitaLand also acquired the remaining 50% stake in One George Street and The Adelphi from its partner in Eureka Office Fund Pte Ltd for S$715.75 million. K-REIT and Suntec REIT each paid S$941.5 million for one-third stakes in One Raffles Quay. The deals took number 6 and 7 in the list of top ten investment deals in Q3 2007.

In the second quarter Japan”s real GDP growth fell 1.2% y-o-y, entering negative territory for the first time in three years. However, the consensus opinion is that the negative growth is largely a reaction to the high pace of expansion over the previous two quarters, and the economy is likely to expand at a moderate pace. Although the US subprime crisis influenced the Bank of Japan”s decision to keep the overnight call rate at 0.5%, the BOJ remains optimistic about the economy in most regions.

Despite some volatility resulting from the potential global credit tightening, investment market sentiment remained largely positive in Hong Kong, supported by strong economic fundamentals. Local investors continued to dominate the market while institutional players value the market”s transparency and liquidity. Notable en bloc office transactions in the third quarter included the sale of Oterprise Square for HK$2.07 billion and a 45% stake in AIG Tower in a structured deal.

Investment interest in Seoul”s major districts remained intense in the third quarter, with many investors seeking properties through transactions due to the limited supply of buildings on the market. However the sales of Seoul City Tower and Daewoo Center, both located in the CBD, established new benchmarks for capital values. With the steep rise in capital values in major districts, investors increasingly considered opportunities in secondary areas including Sangam Digital Media City, Pangyo IT Valley and Bundang-gu.

The series of macro-economic and regulatory measures introduced to curb investment activity through the end of June 2007 did not lead to any significant reduction in interest among overseas investors in China.

In Beijing, Singapore-based serviced residence management firm Frasers Hospitality bought a luxury residential project, Tower D of OFFICE PARK, located in the core CBD from Sino-Ocean Land Holdings for RMB 980 million. Czech real estate investor ECM bought the 768,485 sf Metropolis Tower, which is Tower C of the Zhongguancun Financial Centre, for RMB 1.06 billion.

Despite additional government measures to curb foreign investment in real estate, Shanghai”s investment market remained buoyant in the third quarter. China Real Estate Opportunities invested approximately US$708 million to acquire a portfolio of mixed-use projects including City Centre in Changning and Central Plaza in Huangpu, and Hong Kong-listed Tian An China Investments and Capital Strategic Investment established a JV to acquire Novel Plaza for US$105 million. Other major deals included Grosvenor”s acquisition of 28 duplex apartments at the Lakeville Regency and Pacific Star and SEB”s purchase of Cross Tower.

Despite continuing macroeconomic control measures, positive sentiment prevailed in Guangzhou”s investment market in the third quarter. Attractive investment yields underpinned investor interest in the city”s office and retail sectors. Increased overseas participation in land acquisition and development and the growing financial strength of domestic companies have resulted in escalating land prices, as record accommodation values were paid in a number of districts over the quarter. A villa project adjacent to Nanhu Lake was reportedly transacted for RMB 2 billion on an en bloc basis.

About The Author

Wantanee Khamkongkaew is an independent author evaluating and commenting on leading International Property Consultants in Asia and Greater China, especially CB Richard Ellis – http://www.cbre.com.hk

By Shaun Parker

For those who earn that little extra the idea of a second property abroad is becoming evermore realistic, the options of where to move are endless but Spain is proving a very popular choice. For the last ten years the Spanish property market has been in a bubble, prices for villas and houses have shot up at an extraordinary rate and those with the funds to afford holiday homes seem also to have increased.

Spain has benefited greatly due to its early participation in the tourism trade. The recognition that the small fishing towns of Spain could be transformed into bustling resorts for Northern Europeans was a piece of outstanding entrepreneurship. It turned Spain from a relatively poor country with little exports but olives and wine into a nation with a bustling tourism trade that brought a steady stream of finance into the Spanish economy.

Today the holiday market has changed, more people looking for bespoke vacations to suit their needs but Spain has adapted to the changes. In the early nineties some realised that those who liked to holiday in Spain would also appreciate cheap housing in the country so they could carry on holidaying in Spain for a fraction of the price.

Villas and houses cropped up everywhere and resorts built to totally suit foreign markets were constructed. The ability of marketers to be present these villa complexes as bits of Britain (or Germany), but with better weather was a masterstroke as customers bought the idea wholesale.

This was the start of the Spanish property market, and for a decade and more it has steadily grown. The original idea of creating a home away from home in the sun is still popular for many types of people. As long as weather and climate remain the same in Northern Europe there will always be some who wish to escape and grab some sunshine in the depths of winter.

The idea has changed somewhat, modern villa resorts include leisure complexes, gymnasiums, restaurants and golf courses. Those buying property can now totally isolate themselves within an artificial community whilst still enjoying the 300 hundred days a year of sunshine.

Personally I see this as sad, for me holidaying was always about sampling other cultures. The mass tourism of the eighties and early nineties removed this element and replaced it with a Saturday night on the tiles but abroad. The ramifications of this are vast, now thousands who buy property in Spain will never experience what Spain has to offer. Instead they will stay in their complexes surrounded by their countrymen.

This is all well and good for those who like it but if I were to buy a property in Spain it would be a remote villa in the mountains where I could grow olives and grapes. I would integrate myself with the locals and soak as much of the culture up as possible.

This however is just personal preference, I can understand why many appreciate the security that living in an ex-patriot community can bring, I also understand the need for a prime golf course on your doorstep and see that Spanish villas offer a fine retirement option for the rest of Europe.

Whatever the opinion you have of property in Spain there is no doubt it has bolstered the Spanish economy since the decline of mass tourism. Whether or not the Spanish property market bubble will last much longer remains to be seen but as long as there are Northern Europeans looking for somewhere warm to purchase a second home, Spain will provide villas for the purpose.

About The Author

Expert Shaun Parker knows the foreign property market intimately and uses Procoal for all his Spanish property requirements. To find out more please visit http://www.prleap.com/pr/105616/

By Charles W. Moore

As a creative real estate investor, it is essential that you expend only the money necessary to invest in real estate property, and that means finding good deals and working with individuals who will agree to your terms. Finding motivated sellers is crucial to your success in this matter, since a motivated seller will be less demanding and more likely to conform to your less than traditional methods of purchasing the home. How can you identify a motivated seller from the average individual looking to sell a home?

First of all, avoid any homes that are being sold through a real estate agency. Individuals who are paying a real estate agency commission to sell their home and are demanding a certain price through the agent are not motivated sellers. Rather, look for homes that are for sale by owner. Many of these individuals have either already tried selling through an agent and failed or cannot afford the fees involved in hiring one and need to sell quickly for the best possible price. They will be more likely to work with you on the terms you put forth.

Do not look for houses in bad markets or old houses; chances are, these sellers want to move out of a less than savory neighborhood or have damage to the home that would require costly repairs, these are not the type of investment homes that you want. The reasons behind a sale by a motivated seller vary, but most have to get out from under a mortgage on a newer home in a nice neighborhood and have little or no equity in their home with which to work.

The best way to determine if you have a motivated seller is simply to ask. When you go to view a home that is for sale by owner, have them give you a tour of the house and ask the simple but pleasant question, “Why are you selling such a lovely house?” The response will tell you whether or not the person is a motivated seller. Perhaps they are behind on their taxes or lost their job and need to sell to try to catch up. Maybe they have large medical bills from an accident or illness and need to start over with something less expensive in order to work in that bill. Often, you will find someone in the middle of a divorce who wants the house taken off their hands at the lowest possible cost so that they can end the proceedings quickly.

These are by far not the only reasons a motivated seller looks to sell their real estate property. However, as a savvy creative real estate investor, you can see what types of problems can motivate a person to sell their home and work with you on a lease purchase option. Your job as the investor is to also investigate and find out why they are motivated so that you can be clear on how well you”ll be able to influence them to work with you on a creative financial option that will release them from their obligation as the homeowner, allow you to invest for hardly any money up front, and get a tenant buyer into the house quickly so that you help another individual get a fresh start while you begin profiting.

About The Author

Charles W. Moore is a U.S. Army Veteran who began Real Estate investing in 2001. He”s now a Successful Investor, Webmaster, Speaker and Author. Get a Free Report on Rent To Own Real Estate at: http://www.Rent2OwnExposed.com – Learn More about Real Estate Investing visit: http://www.REIeBooks.com

By Charles W. Moore

Once you”ve invested in a real estate property, you”ve completed half the work necessary to profit from your venture. Now, you have to find a way to sell the property and create a source of income. In order to do that, it is essential to build an aggressive advertising and marketing campaign in which you hit your target audience from several angles. The problem with advertising is that it can be quite costly and time consuming. You need to find ways to get your message out that don”t cost a lot of money and don”t take up all of your time.

As a real estate investor, you know that the target audience for your home selling opportunities is not the average buyer that qualifies for a standard mortgage loan. Rather, you are looking for a buyer with less than perfect credit who needs another means of getting set up in a home. Therefore, your target audience is looking at a different kind of advertising than what most mortgage and real estate companies are working with. You can use certain methods of aggressive advertising and marketing that are much less costly than television commercials or printed flyers for mass mailing.

Start with hand-made Bandit signs. These are the signs you see on the side of the road that say, “rent to own, easy qualify, no down payment,” etc. However, rather than paying to have them made, get some poster board, a stencil set, and some magic markers and create your own, saving you money. Put out 10-20 on a Friday evening and leave them out over the weekend, when the most people will see them. Do this every weekend, and you”ll be inundated with calls from potential buyers.

Put a short classified advertisement in the newspaper. This can be relatively inexpensive and reach a huge target audience seeking a good deal on a home without having perfect credit. Make sure you advertise that you have a 24-hour recorded message that the caller can listen to for more details and that a recorder will take the name and number of the interested party, letting people know they don”t need to be intimidated at the idea of calling and being asked a number of questions right away.

In order to save time on showings of the house, you can use the recorded message to advertise group showings, asking potential buyers to sign up for the show times and allowing 5-6 viewers to make the appointment. This assures that you will never waste time on a potential buyer who doesn”t show up for the appointment, and it allows you to get your message out regarding your terms and conditions to several people at one time. Using the recorded message to tell people about group showings also means you don”t have to repeat yourself with every caller. During a showing, if you have multiple homes for sale, you can offer to show some of the potential buyers the other real estate properties, in hopes of making more than one deal with a single appointment.

There”s no reason to pay large sums of money to handle aggressive advertising and marketing campaigns when you can be frugal and still reach your target audience. By offering group showings, using a recorded message, setting up a newspaper ad, and posting homemade Bandit signs, you”ll receive a huge response for minimal work and expense.

About The Author

Charles W. Moore is a U.S. Army Veteran who began Real Estate investing in 2001. He”s now a Successful Investor, Webmaster, Speaker and Author. Get a Free Report on Rent To Own Real Estate at: http://www.Rent2OwnExposed.com – Learn More about Real Estate Investing visit: http://www.REIeBooks.com

By Kari Shea

That dream home in California has become a nightmare. Interest-only loans provided a way for anyone to own a perfect little palace with all the trimmings, but after a few years the rates soared and the payments became too much to bear. Four of the top ten metropolitan foreclosure areas are located in California. But there is hope. While you”re in the pre-foreclosure stage, a real estate short sale may be the financial savior that you need.

The housing boom of several years ago in California caused many to get in far over their heads. What seemed like a steal for a home in paradise became a bid for a shack in the underworld once adjustable-rate mortgages shot through the roof. If you find yourself in this situation, the short sale may be your best friend.

Many times pre-foreclosure happens because of a sudden and drastic change in your financial situation. Everything”s been downsized, you”re bringing home less money and your payments have skyrocketed. Before you realize what”s happened, you”ve fallen a month or so behind on your mortgage and have been notified of the default on your loan. Your world is shaking, but there”s no earthquake being recorded. Fortunately, this financial hardship will most likely mean that you are eligible for a real estate short sale.

When the amount you owe exceeds the value of your home but you still need to sell, you are talking about a short sale. While still in the pre-foreclosure stage, a deal is arranged with the lenders wherein you would pay less than what is owed on the property. The difference is generally forgiven; though there are pitfalls to avoid.

It”s important to be well aware of any possible legal consequences before committing to a short sale. Be sure that every little detail regarding the release of debt is in writing. Make sure that the lender is not going to force payment of the remainder after the short sale, especially if you have other assets to protect. There have been instances when sellers have been notified that the lender will seek repayment of the debt after the short sale is complete.

Lenders will usually consider a short sale only when you are at least one month in default on your mortgage. It”s also important to have a buyer at hand who is financially able to take on the responsibility. Much documentation is required as proof of your inability to make payments because of your financial hardships. These may include tax returns with W-2s for the last couple of years, bank statements of the last few months and recent pay stubs. A copy of your ”deed of trust” and ”mortgage note” is also required. All of these documents will combine to form an image of your present financial state.

A home in pre-foreclosure need not be the proverbial financial guillotine that it appears to be. By choosing the option of a short sale you can avoid proceeding into the dangerous zone of foreclosure. Yes, it will affect your credit score. But it”s a far brighter way out of the dark tunnel of mortgage debt than a foreclosure. As always, when considering options such as this, do your homework and find out the best option for you.

About The Author

Mark and Kari Shea, of http://www.shea-realestate.com {Shea Real Estate & Investment Group}. Learn more about their services at: http://www.shea-realestate.com {www.shea-realestate.com}.

By Shaun Parker

Spain has been the largest absorber of migrants in Europe for the last six years. An estimated 2.8 million people have arrived increasing the countries migrant population fourfold. A major contributor to this increase in numbers is the desires of many northern Europeans to retire on the Mediterranean coast. This has made the Spanish property an extremely good business opportunity and investment.

This had been the case since the turn of the millennium as the Spanish property market has experienced wild growth and a constant rise in prices. There were however fears last year that the property market in Spain was going to crash. After years of steady investment the worry was that this investment would dry up and the Spanish property industry would be left in turmoil.

Such fears have recently been allayed, house prices in Spain are to continue to rise, be it not at the rate expected earlier in the year. Director General of Spain”s architecture and housing has given a 4percent rise instead of the 5.3percent rise expected in earlier official figures. This marks less of a crash for property prices in Spain and more of a levelling out effect on the market. Such trends have been seen across much of Europe this year.

A further half a million properties are to be completed in Spain during 2007, showing that the market is not in turmoil. It can be seen that sales figures for Spanish property are down this year but officials have been quick to quell any worries about the general health of the market. After a bubble that has lasted almost five years it was bound to slow down at some point, such growth is rarely sustainable in the long term.

If the property industry in Spain is in a slow down phase this should make it even more preferable for buyers. With property developers keener to sell their properties buyers have the option of holding out for better deals, surely keeping Spain”s predominance as the retirement capital of Europe.

The popularity of Spain as a destination to buy retirement property, such as Spanish villas can be attributed to the increase in communications technology allowing people to stay close to their families despite being in a completely different country. With home ties becoming easier to break it is becoming ever more tempting for those of retirement age to sell up, leave the nasty weather behind and go and buy a Spanish villa.

In recent years another temptation factor has been added to entice increasing numbers of northern Europeans to buy property in Spain. A huge rise in the creation of quality golf courses within close proximity of many of the Spanish property developments has given another reason for those wishing to retire to go Spanish. There cannot be much better in life than having good golfing weather and quality courses almost all year round.

When buying property in Spain it is easy to get carried away with the glorious weather and for those inclined to a round, the fantastic golf courses at your disposal. Something that must be remembered is when buying property abroad a reputable company must always be used. Horror stories of crooked Spanish property scams are rife in the press but these should not put potential buyers off. As with much in life, if you use a trusted service the outcome will in the majority of cases be agreeable.

The property market in Spain has recently done well to allay the fears of its patrons. Worries over a down turn in sales and a slow down in property construction have rapidly been explained by official sources. Subsequently the market seems to be in good health and still growing, granted this growth is at a slower pace than before but outlooks are still positive. As long as northern Europeans are searching for a place in the sun to call home, the Spanish property market will remain healthy.

About The Author

Shaun Parker is knowledgeable in the field of Spanish property and has worked with Procoal villas for a number of years. To find out more please visit http://www.highposition.net/procoal.html

By Peter Owen

One of the most important factors when choosing a home loans plan is making sure of the term. It makes sense when saying that if you choose a longer term to pay off your loan, the lower your monthly payments will get.

Some people prefer making larger payment so that their home loan can be paid off faster and because they believe that their property will increase in value. If you are planning to rent out your property the fact is true that you will more likely have a positive cash flow when you pay off your home loan in a short period. The other method is to increase the deposit you put down.

Advantages of Using Home Loan Brokers

Find the perfect home or property for an investment might seem to be the hardest part in the property transaction, but we believe that finding the best finance is much harder. The reason for this is because today we have so many options when applying for a home loan and there are so many companies claiming to provide the best and easiest home loans. A mortgage broker or bank can assist you in this process and save you a lot of time and probably a lot of money in the end.

Their job is to provide a service that makes it simple and lay out all the terms, interest rates, monthly payments and other factors which will suite your needs. You probably have already found your ideal home and now youre looking for financing, but it you havent it is a good idea to contact a home loans broker so that you can be advised as to what your price range are. You need to find a broker who has lender partnerships with at least 3 companies where they can find the best deal for you.

Risk vs. Reward

What are ARM loans? It is an Adjustable Rate Mortgage which might be perfect for you. With ARM home loans you are able to have a term where the interest rates are fixed. The term can be 2 months or 7 years. They are perfect for first time buyers or people who arent planning to stay in the property for more than 7 years.
It enables the buyer to have a lower initial monthly payment.

The only risk you take is that when you decide to refinance your home loan the interest rate might be higher at that time. It is important to know when to refinance and make use of a fixed rate home loan so that that you can have more security in the long run.

Paying Off Your Home Loan Early

Home loans usually have terms of up to 30 years. That does seem like youll never be able to pay it off. Find a way to make a bigger gap in the principle amount. The most common one is to spend that extra cash you have on your home loan. Even if you have an extra R500 it will still make a huge difference in 3 years.

By making that small sacrifice youre reducing your term dramatically. Another way is to increase your homes value by spending that R500 a month on your home. If youre not sure where the house needs attention, the kitchen and bathrooms are usually the best place. Kitchens and bathrooms make a massive difference in a home.

Say No to Prepayment Penalties

When you choose one of the home loans you applied for, make sure that you ask the lender regarding their prepayment policy. When the day comes when you have enough money to pay off your loan or you would like to refinance it, you dont want to make another payment just because youre paying off your mortgage early.

Prepayment penalties are usually unavoidable when youre a high risk client or a first time buyer, but if it is not necessary then dont sign it. You can save thousands.

About The Author

Peter Owen owns a number of properties and teaches new and existing house buyers the importance of finding the correct home loan. For a home loan application you are welcome to follow these links http://www.loanshome.co.za or http://www.millionmortgages.co.za.

By Thomas Bladecki

Many new investors thrilled by the new idea to make money by buying and selling property, are convinced by the short sales or sometimes called “seizures”. Short sales of real estate are the equivalent of a foreclosure.

Occasionally, the owners are forced to sell their property for less than the mortgage it holds on it. This is a short sale. The main consequence of a short sale for the owner, in particular, is that the bank sets the final price and terms of the sale.
Banks and other providers of mortgages do not like to do short sales so it can take a long time for them to approve any offer made on selling the property. That habit can take up to six weeks for the mortgage providers and approval. During this period, in the current market, mortgages have changed. Interest rates have risen and it is possible that you will not buy the property, which you put an offer in on six weeks ago.

Obviously, for all kinds of investors, time is money. Even for personal-use property buyers interested in a house, it”s a lot of time on such a deal. Fortunately, there are other strategies, which allow investors to buy depending on the market conditions. Investing in a market like Las Vegas is sure to build a very positive portfolio in the coming years. There is no harm in buying property at a high price if you are sure that the value of real estate will increase. A real investor will usually avoid temptingly low selling price of property.

In fact, Las Vegas provides decent benefits for any reasonable investor real estate for reasons related to the current market situation. Constant developments and new job opportunities are a reliable market. You may find many examples from the sale of properties in Las Vegas because of the current market situation. There are many people who pay too much for property, or that have changed the status of property in a manner that is detrimental to its value.

The essential point of this article is short while sales are risky, and can be very profitable you have to have patience in the market. The key is to find a dynamic real estate market like the one that exists in Las Vegas. Sensible investment in a good market will repay you with a nice profit margin. I hope this has helped you in your efforts to make money in real estate.

About The Author

Thomas Bladecki is the author and can provide additional information about foreclosures and the current real estate markets visit http://www.home-foreclosure-help.org for more info.

By Sean Rasmussen

Property options are one of the best ways for investors to make a significant amount of money without investing a lot and definitely without risking too much. That combination of reducing risk and increasing profitability is essential in the investment world. Property options may be the ideal way for you to see your highest return on investment. Property investments are not always the best solution for everyone, of course, but for many, they are a solid way to building wealth. Regardless of where you are in the process of wealth creation, consider property options is a stepping-stone.

What Are Property Options?

Property options are a type of property investment where you do not necessarily own the property but do own the control of that property. You will make an agreement with the owner of the property. This agreement provides you with the ability to buy the property during a certain amount of time as decided in the agreement. You only need to purchase the property if you would like to. The agreement is made with a small deposit of your money, usually about $1000 or so. The only risk that you have, at this point, is this deposit of your funds.

The agreement gives you the right to purchase the property if you decide to. You do not have any obligation to do so, though. The benefit here is the time that you gain by using the property option instead of outright purchasing the property. During this time, you can see added value to the property that you create when you use the property in some way to gain better use of or value from it.

The Benefits

There are many great benefits to a property investment like this. First, consider how easy it is for you to get into this type of investment. You do not have to have a large sum of money to make the purchase. This opens doors for many people. You also do not have to deal with the bank and being approved for a loan for the purchase of the property. In fact, this is one of the easiest ways to get into property ownership. Additionally, you do not have to deal with a real estate agent or haggle with your lender about interest rates.

While purchasing through a property option offers benefits, owning property in this way is always quite lucrative and beneficial to you. For example, if you own property like this, you do not have to worry about the tenants that live there or the many repairs that need to be done. You do not have to worry about the day-to-day running of the property. From a financial standpoint, you also do not have to pay a mortgage payment or handle the risk of purchasing a property and losing money on it (and therefore destroying your credit.)

As you can see, property options allow you to enter into property investment safely; something more people need to have to be comfortable enough to make an investment. With property options, more options are opened for you and more success is likely to be around the corner.

About The Author

Sean Rasmussen is a Property Investor and Stock Market Trader. http://www.propertyoptions.tv is about Australian Mark Rolton and Massland. You can locate Sean”s Property Options Blog at http://www.propertyoptionsblog.com.au

By Ki Gray

The Federal Reserve cut interest rates on Dec. 11th on hopes that the credit crisis would be tempered from 4.5% to 4.25%. Markets were on the upswing up until the cut was announced because many investors were under the impression that the central bank, under pressure from all sectors of the economy especially real estate, would deliver a heftier half-point cut, which would have made it significantly less difficult for banks to borrow money from the Fed for their day-to-day transactions.

While the rate cut was still welcome from all fronts, the quarter-point cut disappointed many investors, resulting in a 200 point drop in the New York Stock Exchange within a matter of minutes. Consumer confidence is at a five-year low, reflected in markets around the world. However, the extreme volatility of recent months has been as much a function of investor skittishness as of the credit crunch itself. While most of the sub-prime mortgage fallout has been focused within the real estate market, investors who are uncertain of market conditions will be less likely to invest more, thereby limiting growth.

If the Fed had taken a different approach to their sole mechanism for assisting economic growth, investors would, in all likelihood, have a much better disposition. Over three months they have cut the rate a total of one percentage point, each cut instigated by liquidity difficulties and the sub-prime woes. Now credit is barely more available, and the only plan offered to circumvent the housing slump is laughably inadequate and initiated by lenders. Nothing significant has changed, except that oil prices have fallen from their incredible highs to a slightly less incredible high, and that most Americans are worried even more about their homes.

A concentrated drop of one percentage point in one month could have signaled a much more decisive Fed, restoring faltering consumer confidence through a message saying that effective measures exist and will be taken. By diluting the interest rate cuts over a fiscal quarter, the potential gains to be made by the resulting rate are less impressive, especially on a spooked market.

Fortunately, another rate cut is on the horizon, probably in January. Thus they are able to reduce rates without making a serious statement in regards to the uncertainty investors feel, and in fact exacerbate its results on the market, as shown in the recent cut. Yet their course does ensure that change will occur, even if not in the form and timeliness one might expect.

Another concession to recent events comes in the primary discount rate cut, which helps boost the amount of currency available for banks to lend to each other, from 5% to 4.75%. With projected growth estimates all 1% down for 2007, and since the estimated 2 million defaults from sub-prime mortgages have yet to be realized on the marketplace, the Fed seem to be taking any precautionary measure they can, short of decisive action. By responding only when it appears like everyone else in this troubled financial climate, they don”t fully understand what the fallout could do to the larger economy.

About The Author

If you are interested in investigating the Austin real estate market http://www.escapesomewhere.com Escapeso can help in your search. Their site has a Austin MLS search http://www.escapesomewhere.com/realestate_searchthemls.html .