Well, there you have it! If you have been watching the news, you've seen what the Federal Reserve has been up to this past week. This is an example of what we were talking about in the previous post - a foreseeable unexpected twist.. All the gloom and doom types would have you believe the sky is falling and to head for the hills. If people actually listened, it would become a self-fulfilling prophecy and would lead to a world-wide depression.
Fed Chariman Bernanke derailed the market doomsayers by pumping into the credit markets billions of dollars. Finally, Friday, the bank-to-bank discount rate was cut by a half point and pay-back period extended to 30 days, again, improving the lending capabilities within the credit markets. Of course, the Dow Industrial average soared.
What does all this mean to you and me? It means that more money will be available for all types of loans than there otherwise would have been. This is outstanding news for the real estate market. With more money available, loans terms can be eased to include a wider pool of borrowers. This can directly, and favorably, impact real estate sales.
We believe more of this intervention will occur in the coming months.