Something to think about - The Fed is attempting to be savvy and creative in its
ways to
help the financial system get back on track. However, there is simply no
help the financial system get back on track. However, there is simply no one who can draw upon past experience to find answers here. This situation is historic...and we are living through it. It is almost comical to hear the zany ignorance that comes out of the mouths of some of the politicians who are paraded in front of the cameras...I can't help but think that we actually elected these people.
There is a lot of panic out there. People are very worried about their life savings. Is money in the bank safe? How about if it is in a life insurance policy? How about in bonds? Unfortunately the answer is no, no, no. Yesterday, the panic reached a level that caused such a demand on Treasuries, that the total return of some short-term paper went negative. That's right...the premium paid was higher than the return provided by the yield. So keeping your cash under the mattress is better than an investment in some Treasuries, and apparently safer than the financial market. Suddenly, guess what may become the most attractive way to protect your money?
There is a lot of panic out there. People are very worried about their life savings. Is money in the bank safe? How about if it is in a life insurance policy? How about in bonds? Unfortunately the answer is no, no, no. Yesterday, the panic reached a level that caused such a demand on Treasuries, that the total return of some short-term paper went negative. That's right...the premium paid was higher than the return provided by the yield. So keeping your cash under the mattress is better than an investment in some Treasuries, and apparently safer than the financial market. Suddenly, guess what may become the most attractive way to protect your money?
Think about it...you can touch it, get a tax break, and live in it too.
Yes, Real Estate is starting to look pretty good, especially since the pricing has become more reasonable.
The local and national media are having a field day with falling house prices in various parts of the country. But for the most part, what they are using to confirm their stories is the mediam pricing index distributed by the National Association of Realtors. They seem to forget that real estate is unique to the area, and sometimes right down to the neighborhood or street that we live on. So the big question is:
How are home priced holding up in Wake County?
The answer is that we are doing just fine! In the last 18 months, the average appreciation for a home in Wake County is around 4.8%. Any seller that purchased a home in 2008 and needed to sell has been lucky to break even, and most of them have. The luxury home market ( homes valued over $500,00) is oversupplied, but we all knew that. There is currently a ten month supply of these homes. But there is light at the end of the tunnel for this market. Building permits for these homes have dropped, so the supply should shorten within the next year to year and a half.
The Fed has come to the rescue lately, but all these bailouts and programs to help faltering companies are hard to sustain. They can't save everybody because money will run out. As mentioned, the Fed has been very creative. But eventually, the money and creativity could run out. And the Fed may need to actually print money - this would be highly inflationary. Let's hope it doesn't get to this, as that would be very bad for rates.
So history has proven once again that real estate is still a great investment. If you are considering adding real estate to your investment portfolio, please give me a call at 919-272-4754 or email me at LisaColeman@hpw.com . I would love to show you how to create a great cash flow with investment properties.
You can also search my website at www.LiveInRaleighMidtown.com for homes!
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