SHARE THE WEALTH

So here we are, all wondering just where we are, financially speaking that is.  Some say we are teetering on the brink of a recession, some say we are already in a recession.  There are certainly some slow downs in different sectors of the economy, not so much in others.  I’m happy to report that our business here at Prudential Mike West Real Estate has been fairly brisk for the past few months.  I think it’s the combination of a good selection of quality homes and properties and savvy buyers.  The Seattle PI stated that prices of homes in the Seattle area rose 1.2% in February, a fairly strong indicator.  Time on the market of homes there was estimated at five months near the city and as much as eleven months further out, say in the Snohomish area.  That’s not bad at all, especially compared to other areas of the country, like Arizona or Florida, where foreclosures are rampant and spec builders overshot their market by thousands of units which now sit vacant.  A few days ago the Federal Reserve met and shaved another three quarters of a point off the prime lending rate.  This followed a release of two hundred billion dollars made available for banks to borrow at this new lower rate,  which is now at about two percent.  Thinking that great loan rates were imminent I called several lenders I do business with and they all had the same comment for me, “don’t count on it, kid.”   Okay, I deal with really old bankers.   But, let me get this straight.  There are Brinks trucks stuffed full of billions of cheap money and lined up in front of the Fed, ready to roll to a bank near you, and still no great rates?  Their explanation was thus:  ”We banks took a bath when we made a bunch of bad loans and now we have to recoup.”  They explained that their plan was to borrow as much as they could of the really cheap money and then purchase bonds which would yield big returns in order to replenish their own depleted coffers.  Call me crazy but I don’t think that was what the Fed had had in mind with their recent financial gyrations.  Not only are lenders not passing on loans at reduced rates, they are circling the wagons and creating lending rules which would deny a loan to Warren Buffet.  Come on you guys, share the wealth a little.  Sure you need to recoup from the tremendous mess you’ve gotten yourself into.  That will come with time and sound business practices.  Right now you need to let that money flow to those it was intended for.  There are good, credit worthy borrowers who deserve that reduction in rates which was put into place to stimulate the housing industry.  Thousands of people with ticking ARM time bombs are doing their best to hold on to their homes and counting on you.  So, come on, open those flood gates and let some of that money flow.  If we do it right there’s enough for everybody.    –Mike West