Monday, May 24, 2010

INTEREST RATES (AGAIN)

The word is out (as of this morning). Interest rates will have to rise.....maybe as much as a whole percentage point (100 basis points). The amount of interest charged by reserve banks for an overnight loan has doubled in the last few days, so lenders have to raise their rates in order to make a profit.

Fannie Mae and Freddie Mac have actually lowered their interest rates in order to finance more purchases to those who don't qualify to buy. Another government bailout is inevitable.

The goverment now owns, or has control over, 92% of all existing mortgages in the United States. And some six to seven percent of all home mortgages are in one stage or another of default.

It is a myth that buying a foreclosure is less expensive (and safer) than buying a home that's not in default. And it is a fact that the hassle is far greater.

Trust your Century 21 realtor. Email me from my web site: www.johncmartin.com.

Thursday, May 13, 2010

GOLD AND REAL ESTATE

When you have this much uncertainty in the world, there aren't many alternatives. There's a lot of skepticism out there right now, and folks expect the sovereign-debt contagion to continue and escalate. The nations of the world are out of money, including US, and we are all incurring more debt and more obligations.

Gold is a hedge against inflation; and if you bought a year ago (or more) then you're fine. You've increased your estate - for now. But what can you do with it other than hide it?

On the other hand, real estate (the other "best investment") is usable and liveable, and it sustains life while providing security. Gold is satisfying to hold in your hand and look at; but it isn't usable; you can't live on it; and it can't sustain life and provide security.

My advice in perilous times is to use available cash to buy life-sustaining, usable, liveable real estate. Nothing else is like it.