REALTOR – Page 2 – CupOfJoeLuca

The FED Raised Rates – Is It Still A Good Time To Buy/Sell A Home?

As was widely expected, The Federal Reserve raised interest rates, and indicated that they will continue to do so throughout the year. This actually indicates that things are good in our economy… a positive sign that consumers are spending money, and prices are being pushed upward by the forces of supply and demand. Interest rates are like a “brake system” on a train, when things start moving too fast apply the brakes, to slow the train down. Likewise, when the economy starts to “move too fast”, prices are getting pushed higher (Inflation) so a slight increase in interest rates will temper, or slow down, these price increases. Inflation, like our debt, diet, and data, needs to be managed so it doesn’t become a problem. Which was why The Fed repeatedly lowered interest rates during the depths of The Great Recession – to spur economic activity (buying stuff.)

1st Home Mortgage

What will this mean for me? If you have a 30 year mortgage of $250,000, at a fixed interest rate of 5%, the monthly payment (not including taxes and insurances) would be about $1,342. A rate increase to 5.25% would raise your monthly payment by about $35. Most consumers spend more than that on coffee every month. Will that be detrimental for some consumers? Probably. However, rising incomes, should mitigate that affect. The US unemployment rate is 4.1%, and Full Employment is considered to be about 5%. Many economists believe that this dynamic pushes wages higher so (theoretically) more people should be able to afford the extra $35/month.

If you are considering Selling your house, you should act sooner and not later. Inventory is tight, so there is not much competition at this time; but more people may list their homes for sale increasing the competition. You best option is to contact a Full Time, Experienced, REALTOR® to get the answers to your questions for your situation. Feel free to call me, Joe Luca at 401-580-9797. All questions are welcomed and answers are free and without obligation.

GentryMoving

FUTSAL and Life in Real Estate

I was at a FUTSAL clinic with my daughter this evening and, among other things, the coach was trying to get these aspiring soccer players to understand that when on defense, the should be playing a “tighter” formation and when on offense they should play in a “loose” formation with more space between them. Which almost seems counter-intuitive, especially as a little kid. They want to run to the ball, steal it from the opponent and then kick/dribble/run it down the field to score a goal. What they need to do is play intelligently, watch the ball, but also read the opposing player to determine what his options are and anticipate where the ball is going to be after his next kick or pass.

There is a lesson that many adults in the business world could take from this clinic. It is an experienced, knowledgeable, and confident individual who understands “the game” of business (or real estate in my case) and intuitively knows when to play in a “tight formation” and when to back off and play in a “loose formation”. Sometimes you cannot force a transaction to consummation. It may fall apart if all parties are not ready to consummate, or you may get your wish but the outcome is not what was expected (that usually means you lose money). Life, business and real estate are not always as simple as offense and defense in soccer. However, it is extremely important to know when to play in a “tight formation” aggressively pursuing the “deal”, and when to back off, gain some perspective, and “see where the ball is going to be when it leaves your opponent’s foot.” Maybe this isn’t the “play” for you, maybe there is another opportunity to “steal the ball” or make the deal that you cannot see when in the middle of the “scrum” – to borrow a term from rugby.

So whether you are looking for that next house to “flip”, a “buy and hold” investment, or another big move, maybe you should consider taking a step back, play a “loose formation” and see if it helps score that goal.

Joseph Luca, CDPE
Associate Broker
Realtor
RE/MAX Preferred
The Mercurio Group
1417 Douglas Ave
North Providence, RI 02904

Congress Needs To Act To Ease Credit/Lending For Challenged Commercial Markets

Jim Helsel, the Treasurer of the National Association of REALTORS® testified before a House Panel on July 29th. He stated that a strong commercial real estate sector is vital to millions of U.S. jobs and helps keep the national economy afloat. Perhaps the esteemed members will listen to testimony “from the trenches” of small business. Tax credits and assistance to hire employees are of little value if there is no capacity to retain them. Businesses need access to capital when cashflow slows to maintain or increase inventories, acquire other businesses, or for new construction. Small business vitality is what would help “prime the pump” of our economy; it needs to grow from the bottom up, not the top down. Lending institutions are relucant to lend because of the presence of “Big Brother” and restrictive regulations.

Congress has acted to help address the situaton; the Small Business Lending Act of 2010 is greatly appreciated but we need more. We are not asking for money, or tax breaks; rather small businesses need access to capital (which is not a “handout” from the government) for QUALIFIED business borrowers. Hopefully they will hear us and respond positively.

Thanks for stopping by.

May you Be Healthy, Wealthy, and WISE.