October 28, 2014 Real Estate Report - Happy Holidays

It must be the holiday season with so many gifts coming in. What else could explain good economic news combined with lower interest rates and lower oil prices? Even though the stock market is retreating, keep in mind that the Dow was below 12,000 approximately three years ago. Three years ago the unemployment rate averaged just over 8.0% and it is now just below 6.0%. Initial jobless claims were in the vicinity of 400,000 per week and now they are consistently below 300,000. We mentioned last week that it is surprising that rates and oil prices would fall in the face of relatively good economic news. As surprising as it is--we are going to advise you not to look a proverbial gift horse in the mouth. We are going to advise you to enjoy the lower rates and lower gasoline prices for as long as they last. That might be a few days, a few weeks or a few months. Or the markets might reverse themselves by the time you read this commentary. We do believe this week's meeting of the Federal Reserve Board's Federal Open Market Committee will be very interesting. The Fed is going to be reading signs of economic recovery with no inflationary pressures. They are also going to be feeling the worldwide turmoil going on and speculating whether events overseas will affect our recovery. Some are saying that they might extend their bond purchases to keep rates low. We don't think that an announcement of such will be in the cards, but the phrase "considerable time" when referring to future interest rate increases may stay as part of their vernacular. Of course, our speculation is just that -- speculation Keith Stewart 773-529-7000 http://www.newsletterproonline.com/newsletter/originationpro/?newsletter=true&nid=635&uid=9894