Market Update

The Federal Reserve's announcement of a quarter-point decrease in the Federal Funds rate, it's seventh such cut since it began easing credit conditions in September, most likely will be the last in this series of rate cuts. While these cuts have benefited those with adjustable rate mortgages, they have had little effect on long term fixed rates, which remain in the 6% range. The cuts also haven't done much for investor confidence, which means that credit standards in the mortgage markets themselves will remain tight for the foreseeable future while the overall credit markets and housing markets work through their problems.

When I was in school, a professor that I "studied" under spent 13 weeks explaining to us how investments work. What I learned in that class could be boiled down this: buy low and sell high, and keep the cost of your funds as low as possible. The current residential real estate market presents opportunities that seem to fit both these criteria. Purchasing real estate as a long-term investment (so-called "flips" are another game) is a proven wealth builder provided you get a good price going in and can finance the deal at decent terms. This is true whether we are talking about your home or rental property, which are really the same investments with different cash flow structures.

Now may be the time to consider investing in residential real estate if that is something that appeals to you. If the thought of being a landlord turns you off, you can always use a real estate management firm to handle the details (for a fee, of course), and relieve you of the burden of the day-to-day operations.

The current combination of lower prices and low interest rates doesn't come around often. Consider the possibilities.

Carl Trawick is a Mortgage Specialist and Licensed Mortgage Broker with the firm Access e*Mortgage. He can be reached at 904-343-1145 or ctrawick@nefcom.net

www.carltrawick.com