KUNO Real Estate

Financial Market Up-Date

BOE (Bank of England) & ECB (European Central Bank) kept interest rates the same along with the FED. The 3 monetary entities are more worried about economic growth instead of inflation. Last report that the inflation rate in the U.S. rose over 5% which is the highest jump in 18 years. When does the FED start raising rates to cool off inflation? Oil is the number one cause of inflation. With oil prices continuning to go down from it's high of $147.00 this will be a good sign to slow down inflation. Oil is currently around $115.00 a barrel. If oil keeps going down and the dollar strengthing the FED may keep rates the same to keep economic growth on it's radar. The financial slow down is also being effected globally. A global recession is a possible concern to everyone because of the financial markets. As global investors had there share of investing in sub-prime mortgages. We will have to see each quarter how things play out. Based on data that I am seeing with more continued write downs from Investment & Commercial Banks the financial slow down will continue to the end of the year for sure. I will keep an eye on the markets and quarterly gains or losses and report accordingly. Lending institutions will continue to hold on to their money which means tighter lending restrictions for consumers. Do not listen to the media there is money out there for mortgages. It’s just harder to get. If you have good credit, down payment money and your debt to income ratios (28% to 36% guideline) are with-in the lending institutions guidelines than you can get an affordable loan.

Fannie Mae & Freddie Mac is also a big concern. The U.S. Government will bail them out if need be, so far that has not happened. Between the 2 they insure 5 Trillion Dollars worth of mortgages. President Bush signed off on the housing bill (July 30^th, 2008) which part of the bill is to help Fannie Mae & Freddie Mac if needed. The new bill will immediately help 243,000 mortgage holders from foreclosure and will eventually reach up to 400,000 mortgage holders. 

Also part of the housing bill first time home buyers will receive a $7500.00 tax credit. If you are a first time home buyer the credit is good even if you purchased your home before the bill was signed. The tax credit will be from April 9^th 2008 to before July 1^st 2009. Check out www.kunorealestate.com and go to mortgage/Housing bill page for more info.

The way we will come out of this housing slump/credit crisis is commodities (oil, gold, copper). The more oil drops the stronger the dollar, the stronger the dollar than investors will buy bank stocks and treasuries. The more bank stocks being purchased the more money the banks will have to lend. The more money the banks have then their lending restrictions become more relaxed. A strong housing market is the key to a strong economy! Investor confidence in our financials is a must! 

Interest rates have stayed steady moving up or down with-in 1/8% to 1% for the last couple months. 10 Year Note Yields have stayed around 4%. When the yield goes down so do interest rates.  

Home prices are staying steady in Northwest Indiana except for foreclosures. You are still in a great environment to buy in. Remember we are not California, Las Vegas, Phoenix and Florida were speculators inflated home prices. We are at the bottom of home prices (except foreclosures) or pretty close in are area. I do not see us going past 12% to 15% total loss since the housing slide began. We have come down 6% to 10% depending on the location of your property.

Remember that property taxes for 2009 payable in 2010 will be 1.5%. In 2010 payable 2011 taxes will be 1% and will continue to be (assessed value). This is for owner occupied homes.

Lake County may vary this by 2 tenths of a percent. Real Estate Investors and Commercial Business owners will also have taxes reduced. This should also help real estate sales. Pending home sales rose 5.3% for June which market annalists estimated a 1% loss. This is a good sign buyers are starting to come out.

The 3 combinations-lower home prices, lower taxes and historically low interest rates mean buy, buy, buy!!!!!!!!! Do not wait. Contact KUNO Real Estate the best buyer agent on your next purchase!!!!!