Will this year show historical stock market reference to previous rate cuts during a slowing economy?
I say this because previous when are economy was slowing in the 1990’s the Federal Reserve did an emergency “surprise” rate cut early January and the market reacted by falling then a small uptrend peak. Then when the actual “expected” rate cut came out in late January/Feburary stocks fell off a cliff since nothing had changed in the economy. The effects of a major rate cut even if a full point won’t be reflected for months. Therefore many stocks got sold off after the expected cut because all the technicals and fundamentals were the same and nothing had really changed.
What this will do for home owners and buyers? If another cut it will help lower mortgages again so buyers will come in swarms, or at least the ones that still have money left. As for home owners interested in selling it could mean a possible intitial boost to housing prices rising if their is a demand again. So with home prices falling 10-20% over 2007 then by the end of 2008 it could actually turning into a very positive year for everyone.
I’m currently looking at single family 3bed/2bath homes in Austin, TX area. I keep hearing so much news on how thriving the area is and I have network contacts that live in texas that say this city is the best in the entire state. Also Austin, TX and San Antonio, TX are building a lightrail commuter system in between the cities to accelerate growth. Did I also mention that Houston is around 2 hours west too? This means likely this area will become a tri-city economic area and the space in between would be most likely for growth in between cities.
Similar to this is Richmond, Charlottesville, Lynchburg, and Virginia Beach, VA and Raleigh, Durham, and Charlotte, NC tri-city economic zones. I’m finding beautiful single family 1000-2000sqft homes for $95,000 to $130,000. If you ask me this is ripe for buying opportunity to hold as a long-term investment. I want to create a real estate partnership trust company which I will go into further detail in my next post. I don’t want to make another sour investment. If I put $10,000 towards something I want the $10,000 to grow not disappear.
Do you have any thoughts good or bad on the Austin, TX economy and future outlook of the city?