Angela Pernisco

What a month! Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, AIG...

Now on to some better news... Did you know that more millionaires were made during the great depression than any other era in U.S. history? Although many of us consider the Great Depression a bleak time in our history it was actually a pivotal turning point for our country both economically and innovatively.

Here is a little history lesson: The Great Depression actually began several years before the 1929 stock market crash and lasted until World War II brought the country out of it. In the years prior to 1929, greater and greater amounts of credit were extended to individuals and businesses. The economy was sliding over the edge from available cash to excessive amounts of credit debt. When the amount of extended credit reached a critical level, and companies could no longer pay their credit bills, the businesses crashed (the 1929 stock market crash.) When employees lost their jobs they could not pay their credit debts and the banking industries and housing markets crashed.

The difference between a depression and a recession is the length of time that they last; otherwise, they are essentially the same. A recession typically lasts about 2 years where the Great Depression lasted 10. I have always believed in making lemonade out of lemons and I suspect that many people will be making a great deal of money in the coming years. Do you think you could be one of them?

In order to successfully benefit from a recession; do not follow the crowd! You will need to be proactive and watch for opportunities. Many people will stop investing but this is the time that prudent investors build wealth! When it comes to buying real estate during a recession it is not a question of how low will prices go, but more so, how much can you buy before prices go up. The more you buy, the more you will make when the market recovers. This certainly is not a recommendation to go out and buy everything you can get your hands on. The same general investment rules still apply and in purchasing a home the number one rule is location, location, location. Next you will want to look at the condition and see if the price compensates for any deficiencies. I can help you to locate the best opportunities and negotiate the best possible price!

As we approach the beginning of the school year I am amazed at how quickly the summer has passed. I looked down at my calendar today and realized that I only have 2 weeks to purchase school supplies, clothes and back-packs. I have yet to figure out where the summer has gone and despite high hopes for a summertime market recovery, activity continues to be slow.

The good news is that the federal government is making efforts to resurge the Real Estate market by passing legislation that would benefit first time home buyers. The federal government considers a "first time buyer" to be anyone who has not owned a primary residence in the past 3 years. The newly passed legislation is offering up to a $7500 tax credit to buyers who purchase between April 9, 2008 and July 1, 2009. There are limitations which are described in detail at: www.federalhousingtaxcredit.com.

The best news about this legislation, if it is successful in its design, is that it will create the trickle effect. Much of the difficulty that we are experiencing is that many people need to sell their home before they can purchase the next. This may be enough to get the ball rolling in a positive direction if it motivates the buyers who are sitting on the fence. Once homes begin to sell at a steady pace again the rate of appreciation should increase and stabi-lize the market.

We certainly are not expecting this legislation to be a cure all for our current state of affairs. There is still the economy, elections and interest rates to take into consideration. However, it is encouraging to see our govern-ment step forward and begin to address the problem.

If you know of anyone who has toyed with the idea of purchasing a home please have them call me (no obli-gation to purchase). I would love to talk to them in detail about the process and help them to determine if it is something that would benefit them. I also have some wonderful books about the buying process that I love to give away.

As always, I hope that this letter finds you well!