Buffett on Housing
Warren Buffet agrees with me! Buffett says housing woes to easy next year, barring explosions. It has seemed to me for a few months that the housing market had at hit bottom. Talking to local realtor’s the thing holding back sales most of all were unreasonable sellers. Property owners had a hard time accepting that the market has changed and that it will not be returning to the lofty levels of 2006 in the near future. Recently there has been some movement in my local market. Two houses went on the market and sold within the first month (at a 20% discount from the high) of listing. Both Seller and Buyer were realistic, with the seller taking the lead. Personally I have been involved with three real estate transactions in recent months. The first was the selling of the family’s summer vacation home. This house was purchased when I was eight years old. Thirty Five plus years later it was time to sell. Bring in the local realtors we found a vast difference in pricing. We choose the realtor who wanted to list the house the highest (typical huh?). Well little to know interest developed. This was also the summer of 2008 and the market was in the middle of its free fall. The lack of offers and interest did not surprise me. Come spring the house was re-listed (at a 20% reduction in price) and we received an offer within weeks. A few things helped this sale, a motivated seller (my Mom) a motivated buyer and the correct time of year to list the house. Few buyers will purchase a Summer house in September and then be responsible to pay for it over the next nine months when it really cannot be used. Overall a fair price was achieved for this house. The second was the purchase of a Co-op. Unfortunately for me, although the sellers were as motivated as I was to complete the sale I needed it to be done more urgently then them (also they needed extra cash to complete a sale on the other side, if they didn’t get it no deal would be completed). Therefore although it was a “fair’ price it was more “fair” for the seller then buyer. The third is the family home. This home, in one of the five boroughs of New York (the best borough). It was purchased about 60 years ago by my Grandmother. After passing away late last year it was time to sell this house also. This time when hiring an agent we did not pick the one who wanted to list it at the highest price. Well actually we did, but not for the reasons you would think. The Realtor was exceptionally confident that she could achieve her price point. Even after we expressed our desire to sell quickly and our previous history with selling real estate she was firm in her decision to list the house at that price point. We hired her and so far have been pleasantly surprised. Although she has not reached the listing price, she has already produced an offer above all of the other Realtors that we interviewed.
So from my personnel experience the housing market is loosening up. When Buyers and Sellers are realistic deals get done. I doubt we get back to 2006 levels anytime soon but movement in the market is what is most important.
Good Luck and Good Forex Trading.
Snow Day for the Markets
Well the Northeast was hit by another major snow storm causing getting to work to be extremely difficult. My office was particularly baron from Thursday afternoon till the end of the day on Friday. For people in Manhattan and others on major train lines (and a will to get to work) there was a way but it wasn’t easy. One quick story on determination and “wanting it”. As I have previously written we recently hired two trainees to work on the desk. The one assigned to Emerging Markets is not exactly a ball of fire. She is much more concerned with her lunch order and what the office gossip is rather then trying to learn and get ahead. This was confirmed when I was greeted on Friday Morning with the following conversation,
Trainee: Good morning, with all the snow do we get to leave early?
Me: Well, we need people in and since the markets do not close we are here for the duration.
Trainee: You mean that people will work even with all this snow?
Me: It isn’t snowing everywhere in the world and this is a global market.
Trainee: Oh, Yes, so that means I cannot leave early right?
Me: You can leave whenever you want, if you feel nervous about the weather or anything else I am certainly not making you stay.
Trainee: OK, Thanks, I am going to Philadelphia for the weekend and want to get an earlier start.
Me: Have a good time.
OMG, we certainly hired the wrong person.
Check back later for a market update.
Good Luck and Good Forex Trading.
How Low is Low?
The picture has no thing to do with this post. Mostly because the markets continue range bound. These markets are extremely frustrating. Basically going no where for now but for how long? Bernanke said that rates would remain low for a while. But what is “a while” and what is “low”. Is .50% low? How about .75%? I think there is certainly an argument that can be made that all of these rate levels are “low”. The same can be said for the time frame of rate changes. What is the definition of “a while”? To me where there is smoke there is fire. Emerging Market rates are set to move higher. This follows similar moves in Australia and New Zealand. I have been saying for a while that the U.S. will not raise rates in 2010. I still believe this but my conviction is not what it once was. I think Bernanke is preparing the market for the inevitable, higher rates. Overall this should be a welcome sign for the economy as is signals that we are coming out of the recession (although initially it may send stocks lower). For now I like a strong Dollar play and having payer positions in the short end of the curve. Those can be costly as the carry is very negative and as such any move into positive territory should be used as an opportunity to take profit.
Once again short term time horizons are optimal.
Good Luck and Good Forex Trading
Boring Day. but Merkel say is all….
*MERKEL SAYS EUROPE TO DO ‘ALL IT CAN’ TO SUPPORT
GREECE
The Euro had little reaction to this news. I think the market is getting used to all of these ridiculous statements. I have no positions of substance on going home tonight. The market seems to be totally range bound any I see little reason to get excited about it. This is one of the hardest thing to do as a trader, sit on the sidelines and wait for your opportunity’s.
Good Luck and Good Forex Trading.
Poll of the Week-Where will Fed Funds be at the end of 2010
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