I’m no economist but seeing that the LIBOR rate has been rising and now the Canadians are raising their rate as well shows That things are changing. it could be that things are looking up in Canada but the rise in LIBOR rate does come at a cost to anyone holding an Adjustable Rate mortgage. Not to mention anyone who indexes their mortgage rates to the LIBOR for new mortgages.
This could add to downward market pressures that the US real estate market already has due to the expired $8,000 federal subsidy for first time buyers to buy a house. This real estate mogul would suggest that prices in areas with stagnant job growth (almost anywhere) and excessive inventory (both real and shadow) you might see some hard bargains being driven where sellers are being asked to come up with $8000 (It’s only Fair right?). More than likely the general population of potential sellers will be in wait and see mode in areas where jobs are not actively being lost and where unemployment is not running out yet. Things could still get ugly in other areas where the jobs are going away and unemployment is running out and where the 5 Year Arms from 2006 sales have yet to adjust).
That’s the problem with giving advice on real estate online. it’s a local business. Find a Broker who you has been in the business for more than 15 years and you will have someone who can guide you to avoid major mistakes. Unfortunately I can say for sure in your market that the bottom has passed but it’s likely if the commercial vacancy rates are down and builders have resumed building. look around. it’s not just the price of comparables because their might not be any in over a year and these will be unreliable.
Foreclosures are not necessarily a bargain either due to vandalism that outgoing owners might have done out of spite. Tread carefully on these and never pay more than 33% of potential Market value if bought sight unseen, remember that if you are diligent yourself or have the right people seeking out deals you should have 3 or 4 out of a hundred properties reviewed to bid on. Just move on and keep up the search. (action)
If you are holding an ARM mortgage and are in a position to refinance it makes sense to do so now as most ARMs utilize the LIBOR rate to index the interest rate charged on those mortgages and will likely head higher.
So while the US Fed is holding rates low for now the rest of the world is not and in the case of Adjustable Rate mortgages this is not a good thing since the Foreign rates are the ones used to set the rates.
It’s time to be careful but if you are deliberate in your investing you will be able to make good returns and have great year, just don’t be buying to hold unless you buy at well under 65% of market value or 33% for foreclosures. Get looking for those deals.
Today is a tough time for anyone who wants to be a success.
But no matter what the economic climate is it’s always tough. So what can we take from this? After all look at Dubai, $60Billion (US) in debt that had been or is near default. In case you are not aware the UAE economy is not based on petroleum exports. Oil accounts for only 6% (probably less now) of their total economy. Sheik Mohammed bin Rashid Al Maktoum the Mogul who is personally respinsible for anyone outside or the middle east to even have heard off Dubai is faacing the same crisis’s that you will continually face in your career as a real estate mogul. Ok his invetments are all being dragged down by the global real estate collapse this much is true but the fact that Dubai Worlds $60billion debt has had such a profound effect over all of the regions stock markets is the kind of reaction that takes down global economies. the point is there will be back up funding found. this is just the knee jerk reaction to an announcement during the US thanksgiving holiday and with other days where the news was delayed the worst-case scenario that will not likely happen has been growing in investors minds. it’s a self fulfilling prophecy really. if they are having a problem i better get money out of there and so it grows until everyone is selling and prices drop so low that another group seeing an opportunity to make a killing on cheap stocks and inventory buys up the depressed issues only to sell them back to the same investors in 9 months for 40% more than they sold them for in winter. if they had just stood by the strength of the companies they own and not panic they would have saved themselves a ton of cash but maybe lost some sleep and probably a few arguements with family members who are your worst enemy in investing if they don’t share your mogul mindset.
Who else is being taken to task in the news today. Tiger Woods arguably the greatest golfer in the history of the game is being speculated about his personal life on every Radio and TV channel and online. Why? because he has what so many others don’t have. Success. Human nature was described to me with this analogy that we all are a lot like crabs. If you’ve ever seen crabs in a crate together they are always pulling one another back down inside the crate. From a quick look at TV or the inner city or even in high school humans are constantly doing this too. I have no doubt that Tiger woods will be back because his mindset and his close circle of advisors is on his side as evidenced by the fact that nobody in 4 days has been talking to the media. So thats the heart part of it. The brains is taking the time to know that you will be attacked for your ideas and actions and to plan how you are going to deal with the onslaught. What is key is to distance yourself from doubters who just doubt as a programmed reaction to new ideas. I’m not suggesting to be disloyal but be sure your loyalty is going to be reciprocated in the tough times that will come from being a mogul. There is so much inner game required to win at being the real estate or any other kind of mogul that few ever reach that level. with just the right idea you have an idea, add the right attitude you can move mountains. when the two are combined you can change the world. it truly is greater than the sum of its parts.