Tuesday, July 21, 2009

Lockhart speaks to Nashville... Gives us the economic outlook

Dennis Lockhart (Top U.S. Federal Reserve Bank Official) spoke to the Nashville Rotary Club on Monday stating that we will soon emerge from our recession. His speech was a mixed bag of the current negative condition we are in with the hopeful and somewhat confident recovery.

A part of the "somewhat confident recovery" was indication that the interest rates were not going anywhere soon. "Certainly we have low interest rates today" and "I would expect that to continue for some time" Lockhart said at speech held before the Rotary Club of Nashville. He acknowledged that there are many stimulus packages in place and that there was no reason to take those away at the moment. He added that "the economy is stabilizing and recovery will begin in the second half ". He also suggested that the Fed has more tricks up its sleeve in order to give the economy a boost and that they will be unleashed whenever the time is appropriate.

What does this mean for the Nashville housing market?

#1 Interest rates should remain low. This should continue to encourage buying and leveling out the housing market a little more.

#2 Housing prices should remain steady. Sure we may see a few more drops here and there but all in all we should see home prices stay and in the future see some incline.

#3 We MAY see another stimulus like we have with the $8,000 tax credit. I wouldn't hold my breath on anything spectacular but you never know what's to come. For those of us that may be waiting on the "next big thing" it may be like waiting at a Roulette table in Vegas.... Sure, it's been landing on Red pretty consistently but I wouldn't wait until the next turn and throw all my money on black.

With housing prices starting to level out, the next few months may just be the right timing to get the best deals and incredibly low interest rates. November 30th is the golden ticket. First time home buyers must close by then to see the $8,000 tax credit.

Stephen Strickhausen

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