Is there any downside to any signs of real estate market recovery? — or any other business that relies on financial institutions to operate? Is there a such thing as a “bad economic or real estate recovery”? Unfortunately yes — At least that’s my humble opinion. The concept seems like a paradox or trick question, doesn’t it? But think about interest rates…the fed is basically borrowing money to give us the ability to acquire “cheap money”. But once there are signs the economy is “on the mend”, I propose that the fed will begin to get tighter with their money quickly — because they simply have too much compounding dept from too many other sources to do anything else. I wrote a post over at a premier Austin real estate blog owned by a good friend. There, I elaborated on the concept of of “Bad Financial Recoveries”.
From What I’ve learned from an authority on the subject (in my family no less); to conversations with other economists, it seems Washington already has too much of its plate to delay much longer with interest rate inflation. My one fear (that I didn’t articulate well in my post) was the “taking of cheap money” before enough can be used “to absorb enough area inventory”. And where would that put us? My guess…back to where we started.
Even in the case of a close-in Bethesda homes for sale, I know many potential buyers who are just a couple points (if that) away from renting or looking elsewhere. It’s the volatility and complexity of different real estate markets that makes me a little uneasy about my own speculations — and again, this is just speaking strickly from the real side of the crisis. It’s a quandary that is far more complicated than I pretend to fully grasp.
Regardless, I think you’ll enjoy the read >> “Why Interest Rates May Rocket and How You Can Protect Yourself”
I go into some details about other variables that will inevitably push interest rates considerably (again, just my humble opinion). Hopefully you’ll draw your own conclusions or engage in conversation with me over there if you wish. I’d love to chat through the issues.
And oh yes, you’ll be happy to know (as the title indicates) that I also give some general advise about how to take advantage of today’s distressed yet “incentivized market” – for better or worse, it may be a fun read!