Economic News And Impacts On Burbank And San Fernando Valley Real Estate

• Former Federal Reserve Chairman Alan Greenspan, who served as Fed Chairman for 18 years, said this financial crisis will probably lead to the failure of more firms. He went on to say, in his interview with George Stephanopoulos, that this is the worst financial crisis he’s ever seen.

• Treasury and Federal Reserve officials are working on brokering a sale of Lehman Brothers Holdings Inc., the 158-year-old investment bank that reported a third-quarter loss of $3.9 billion.

Given that the Fed acquired a $29 billion portfolio of mortgage-backed debt from Bear Stearns Cos. earlier this year, they are now trying to avoid using any government funds to rescue Lehman.

• Crude oil fell to a six-month low in New York, crude oil for October delivery fell $2.10, or 2.1 percent, to $99.08 a barrel oil has fallen 33 percent from a record $147.27 a barrel in July.

Thanks to falling oil prices and the resulting impact on consumer prices, Bernanke may not have to raise rates just yet, an interest rate hike had been rumored before oil started to come down and Fannie and Freddie were taken over.

As far as the Burbank and San Fernando Valley real estate market, we’re not out of the woods yet. The good news is that lower mortgage rates will continue to help buyers get into homes. We have yet to see the impact of the housing legislation passed in May, which is estimated will help about 500,000 homeowners facing foreclosure. Prices have edged up in some areas and days on market have stabilized or gone down, from last month, which in part, indicates that homes are being priced more reasonably. Some areas continue to be hard hit from the number of foreclosed properties coming up for sale.

Economic releases to keep your eye on for next week:

• Industrial Production
• Housing Starts
• Consumer Price Index

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