Michael A. Caruso ~ Orange County Real Estate

Like ‘em or not, the Fed holds the strings to monetary policy and our eventual safety. So, most people in the real estate industry watch the Fed and its moves (or lack of moves).

On September 16, 2008 most waited anxiously for the news from the Fed on their position for a rate cut, or a hold.

Wall Street seems to show its approval or displeasure by the direction of the market after the Fed announces its intentions. And at 2:15Pm east coast time the Fed did just that. They announced a hold position...and Wall Street reacted but how can we let our personal opinion be known? I have my own opinion but just to be sure you have the Fed's position to help you form your opinion, here is their statement as published in the LA Times...

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2%. Strains in financial markets have increased significantly and labor markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction and slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth. Inflation has been high, spurred by the earlier increases in the prices of energy and some commodities. The committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain. The downside risks to growth and upside risks to inflation are both of significant concern to the committee. The committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.

It appears to me that in the first 3 sentences there were 6 reasons to lower the fed funds rate, so I guess you know my stand on this.

Your comments are most welcome. Please send them when you have a moment.

And thank you for making me Your Orange County Real Estate Connection.

Best regards, Michael Caruso Broker ABRM CRB CRS

2007 President, Orange County Association of Realtors

Recent horrors associated with back to back to back hurricanes had me thinking and praying for all those who could or would be affected in this type of tragedy.

It also got me thinking...if I were told by the National Guard, the Governor, my local government Leadership to leave my home would I do it? Would I leave my home, my belongings, my memories and run for safety? Run for safety and wonder what is going to happen to the worldly things that became a part of my very essence...

I can tell you right now...I would not leave. I'll put on a life vest and tough it out no matter what, but I would not leave.

What would you do? I'd love to hear your feedback on this one, so please feel free to leave a comment.

Thanks for making me Your Orange County Real Estate Connection.

Best regards, Michael Caruso Broker ABRM CRB CRS

2007 President, Orange County Association of Realtors

Most researchers will look at building permits to get an idea of future construction. For retail construction, Jeff Collins of the O.C. Register did some research and recently reported that that retail construction permits were down 61 percent this year. Apart from retail, this year's biggest drops occurred in hotel construction (down 77 percent) industrial construction (down 67 percent) and office development (down 55 percent).

Renovations of business and institutional buildings increased about 5 percent.

Nevertheless in "The OC", this year's January - July permit value is just slightly above the average for the past 10 years. Pretty resilient county...don't ya think?

Thank you for making me Your Orange County Real Estate Connection.

Best Regards, Michael Caruso, Broker ABRM CRB CRS

2007 President, Orange County Association of Realtors

There was a great article in the Orange County register this week by Shelly Banjo that outlined some great ways to control spending while times are tight. Not everyone has to talk on a third job or work twenty hour days when times are tough...

Sometimes a person can fall behind financially because they were the victim of a bad day at work, and they choose to reward themselves for just getting through the day. If the reward is something like an elaborate weekend getaway or buying a big ticket item on a credit card, it could spell trouble. Purchases such as these can feel great momentarily, but when the bill comes in the mail, buyer's remorse sets in.

Making major purchases becomes quickly addictive and therefore should be nipped in the bud as soon as one realizes it is a problem. These urges can come from feeling stress caused by work, family or relationship woes...Yet it is important to resist the urge to make impulse buys!

Instead, try setting aside funds for big purchases, which will prevent a person from paying interest rates on credit cards as well as running the risk of spending money one may not have. It is also essential to avoid letting bills pile up when spending gets out of control. Tackle the problem by setting aside time for paying bills, budgeting and setting up payment plans with your creditors (if necessary). Actions like this will help one avoid falling deeply into debt.

While many can relate to struggling with the matter of tightening the belt financially, not all of us have the solutions...So feel free to re-post!

Your comments are welcome.

And thank you for making me Your Orange County Real Estate Connection!

Best regards, Michael Caruso, Broker ABRM CRB CRS

2007 President, Orange County Association of Realtors

A columnist at the O.C. Register did a math equation that opened my eyes in an article he wrote recently. Jonathan Lansner said that in the first half of 2008 the typical Orange County house seller cut their price about $17 per hour.

That is an extrapolation from the figures showing about a 23 percent slide in prices for the first half of 2008. That is according to DataQuick math in what has been called by some as the ‘mother of all price corrections'.

At the time Mr. Lansner was obtaining his facts, our MLS records showed about 14,446 homes for sale in The OC of which about 4,400 were short sales and only 276 or thereabout were REO's.

But recent stats from the Southern California MLS show that inventory has declined about 10% off that big number and buyers are saying they are ‘sick and tired of chasing short sales with offers that take months in which to obtain an answer'... and that answer is generally the wrong answer in the buyers' eyes.

So what this can all mean is that if a seller has a good home and prices it correctly with the help of a professional Realtor and the home is not a short sale...well that property would probably be in high demand!

Imagine that!

Please feel free to comment if you have a moment...

And thank you for making me Your Orange County Real Estate Connection!

Best regards, Michael Caruso, Broker ABRM CRB CRS

2007 President, Orange County Association of Realtors