Bernanke Predicts Swift Recovery on 60 Minutes

This past week our listings saw an average of 1.2 showings each.   It was a slow weekend but  that should not be a surprise since it was the 4th of July.   We have already seen a pickup in  traffic this week and have several showings already scheduled for this weekend.   The last few weeks have been relatively slow, so I’m expecting a pickup in the coming weeks to balance things out.

Today my business coach asked me if I saw the recent “60 Minutes” interview with Fed Chairman, Ben Bernanke.   It aired about three weeks ago on the prime time news show on CBS.   I didn’t see the first run so I watched via the web this evening.   If you haven’t already, I highly recommend carving out the 45 minutes required to watch.

Apparently, this was the first time that a Fed Chairman agreed to a public interview.   This is because the words of the Fed Chairman can sway the daily decisons that business people and investors make and can have a major impact on the short term markets.

Among other things, the Fed Chairman is responsible for setting key interest rates to help regulate banking and the economy in general.   It is said in the interview that he is one of the most  powerful individuals in the world with regards to an economic recovery.

The interview was excellent and helped to give some persepctive about  the country’s  current economic  situation.   Bernanke said in the interview that he expected the current recession to end later this year or early in 2010.   Part of his role as the economy improves will be to reign in the money supply and increase interest rates to prevent inflation that would otherwise  occur along  with recovery.    An overall economic recovery will clearly have a positive impact on the real estate markets.  

However, buyers of real estate should seriously consider that if the economy recovers and the Fed begins to raise interest rates, it is likely that mortgage interest rates will also rise.   If real estate prices start going back up due to economic recovery and interest rates rise with Fed efforts to curb inflation, housing affordability will begin to drop.   Calling all buyers:   take advantage now while both rates and prices are still low!!!

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