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Strategies & Market Trends : Real Estate home/investment -- Ignore unavailable to you. Want to Upgrade?

To: David Jones who wrote (1)	9/14/1998 12:37:00 PM
From: David Jones	Read Replies (1) \| Respond to of 73

My point for the previous post is this. When jobs here in California drop sufficiently to cause the population to stabilize or drop as it did in 91. Real estate here follows suit. Usually the larger homes are the first to feel the impact. For instance in 91 the $500k+ homes dropped some 15-20% where as you under 250k homes fell some 7-10%. Of course not all area's had large drops in values but it was a fact that the 500k+ homes were just not selling. I mention this because today this is a hot market here in the Bay Area of N California. There are buyers lining up to purchase homes in the Silicone valley area that have not even seen the house plans. Almost a frenzy of buying this past summer. This just so much reminds me of 89 when like today there was frenzied buying. And two years later the market just died. Today is a situation I have never seen in the real estate market. High real estate costs, low interests rates, and low unemployment rates. Yes any real estate agent will tell you this all points to a good market. But IMO it is undeniable that there has to be a correction if exports continue to drop of. And it has been my personal experiences that real estate, although a safe haven from inflation can drop in value very quickly. Dave

To: David Jones who wrote (1)	9/14/1998 12:48:00 PM
From: David Jones	Read Replies (1) \| Respond to of 73

9/10/98 Look For Further Downward Movement In Mortgage Rates Investor uncertainty regarding stocks and the Clinton Administration continued to drive investors into the safety of Treasury securities. Interest rates moved substantially lower as a result, which should lead to additional reductions in mortgage rates. Trouble in Latin American financial markets is the latest foreign event to aggravate investor concerns of shrinking corporate profits and the future health of the U.S. economy. As if this wasn't enough for investors to worry about, speculation is heightening regarding a possible impeachment of President Bill Clinton. This combination of events has investors once again scrambling for the safety and stability of U.S. Treasury securities. With Greenspan now expected to lower short-term rates by year's end, investors had few reservations about putting their money into Treasuries. The value of Treasuries surged as a result, putting substantial downward pressure on long-term interest rates. At 4:00 PM EST: The price on the 30 year Treasury Bond was higher by one full point and 14/32, pushing its yield to investors down to 5.17%. The price on the 10 year Treasury Note was higher by one full point and 2/32, pushing its yield to investors down to 4.75%. This downward pressure if maintained, will surely lead to additional mortgage rate reductions by week's end. Since Friday is not likely to produce any events to ease current concerns regarding overseas economies and Clinton's Administration, investment in Treasuries should remain active and promote some downward movement for mortgage rates.