Low Interest And Fuel Costs Are Providing Relief For US Consumers

NuWire Investor:  Written by: Jacob Gaffney - Affordable mortgage rates should help the nation's economy avoid a double-dip by freeing up consumer spending money, according to Morgan Stanley. Although mounting European debt and a weak Euro could have global reverberations, a stronger dollar indicates improved fundamentals in the US. See the following article from HousingWire for more on this.

The US economics team at financial firm Morgan Stanley  (MS: 25.80 -0.58%) says in their latest research report that recent gains in the nation's economy point to a remote chance of a so-called double dip — where recent upticks in economic activity are only temporary — citing low mortgage rates as a key driver in drawing this conclusion.

"The dip in conventional 30-year mortgage rates to about 4.8% has triggered a minor refinancing boom; reduced debt service will further add to discretionary spending power for many mortgage borrowers," according to the report. "Taking these offsets into account, we expect net financial conditions to be roughly unchanged."

In their latest report, titled "Defying the Double Dip," authors Richard Berner and David Greenlaw look at several macroeconomic factors in coming to this result.  Lower fuel costs and greater infrastructure spending, for example, are providing relief to the American economy at-large, something they don't see changing anytime soon.

"To be sure, the recent surge probably overstates the new upswing, but there remains ample unspent Federal funding," the economists write, "and officials are unlikely to turn off the spigot in an election year when incumbents are threatened."

The report cites "powerful offsets" like the strong dollar, along with low mortgage rates, as potential hedges against the risk of a double dip. Indeed, they concede there are large market worries over growing sovereign debt levels, especially in Europe, where higher borrowing is expected to be favored over austerity measures in the short term.

Paul Ashworth, a senior economist for Capital Economics, did not agree totally with the Morgan Stanley assessment in a note on US manufacturing levels today.

"It is possible we will see a more marked decline in the coming months, as Europe's woes start to affect global trade and domestic inventory rebuilding begins to slow," he wrote.

Ashworth adds that the recent appreciation in the dollar, particularly against the euro, and lower commodity prices mean that over the next 12 months the rise in import prices over the past year will be largely reversed.

"This is another reason to suspect that both headline and core consumer price inflation is going to fall to 0.5% by year-end."

The Morgan Stanley economists recognize the concern that a stronger dollar in concert with the sovereign crisis may promote deflation, but aren't on-board with the theory.

"In contrast, we think the fundamentals for pricing power are gradually improving," they conclude, again with the view of stability in the short term. "Climbing rents, accelerating prices at the early stages of the processing pipeline, and rising import prices all are starting to signal that inflation is bottoming."

This article has been republished from HousingWire. You can also view this article at HousingWire, a mortgage and real estate news site.

Forecasts For International Real Estate Markets In Second Half Of 2010

NU Wire Investor - The global property market is moving in a positive direction, however, not all markets are on the upswing and investors should be careful to consider economic, political and other factors before buying into any market. While Latin America and the US overall offer strong upside potential, markets in Europe, the Middle East, North Africa and Asia have markets that are both up and down. See the following article from Global Property Guide for more on this. 

Rio de Janeiro, Brazil

The world's property markets are on the road to recovery, but investors will have to be careful about which markets they select. In a new report, the Global Property Guide makes recommendations for residential property investment during 2010 (download the full Global Property Guide Mid-2010 Property Recommendations report).


The world is no longer moving in one direction, as it did during the crash and the bull market of 2006-2007. Some countries' real estate markets are moving down (most notably Bulgaria, Ireland, Iceland, Slovakia, Spain, the Philippines, Greece, the Netherlands and, for political reasons, Thailand). Others are moving up (Hong Kong, Singapore, Taiwan, Australia, Israel, Finland, Norway, Sweden, and the UK) (see The World's Housing Markets at Q1 2010).


However, the general trend is up, due to lower interest rates and higher government spending.


Things are back to normal.


Well, not quite. The world's housing markets will surely be affected by a major long-term trend, the adjustment - deep and powerful - of economic forces which is now impacting everything we do.

   
• The leading developing countries are growing rapidly and are assuming much greater importance.
   
• Relatively speaking, the developed world is losing ground.

For 15 years the loss of momentum of the developed world was disguised by the housing pseudo-boom, but now the issues have become very apparent.

Inevitably property markets will in future reflect these facts. Some ripples on the surface of the waters:


In Latin America:

   
• Interest rates are in long-term decline, due to better Central Bank policies
   
• Economies are booming
   
• Tourism is rising
   
• The residential property boom that began 3 years ago continues
   
• Rental yields - critical indicators of the health of property markets - are still high
   
• Latin currencies are rising

Our selections for investors: Peru, Panama, Brazil, and Chile

Possible: Colombia




In the US:

   
• The economy is recovering
   
• The dollar is rising
   
• Residential property valuations are attractive in some states, and are already attracting investors

Our selections for investors: states whose property markets fell dramatically during the crisis, beginning with Florida

In Europe:

   
• Property markets have not sufficiently adjusted from their 15-year rise. Residential property yields are poor throughout Europe.
   
• The panic over the Greek and other deficits shows no side of abating
   
• The Euro is falling. Currency depreciation should somewhat offset increased fiscal stringency - a positive.
   
• There are buying opportunities for opportunities for non-Euro buyers, but of themselves residential properties are not an appetizing investment in most of Europe.

Our selections for investors: Turkey, Hungary

Turkey, because of its young population, the opening to the East, and its competent government.


Possible: Hungary, because its incompetent government may provoke a crisis which would make its low prices and excellent yields even more attractive.


In the Middle East and North Africa:


The Middle East is in a cycle, led by the Gulf. Recovery may take a while, but the underlying dynamic of petro-dollars, pegged currencies, and high domestic inflation, which tends to push property values up. As yield-oriented investors, we are more interested in the marginal markets, but we expect investors to begin to be interested again in the Gulf soon.
Our selections for investors: Egypt, Jordan
Possible: Morocco, Egypt and Jordan's property markets have been hard-hit by the crisis. But in both countries' capitals, there are generous yields.  Morocco has less attractive yields, but a long term tourism trend.

In Asia:Property is over-valued in most countries in Asia, with two exceptions
Our selection for investors:
MalaysiaPossible: Thailand
Malaysia is very stable, and has reasonable returns

Thailand has excellent yields. Prices have been falling, because of the political uncertainty. Developers want to reduce risk by unloading stock. Opportunity knocks.

In the Pacific:

Avoid. Australian residential property is quite overvalued, and interest rates are rising. In New Zealand there is less overvaluation, but we do not see a strong investment case.Download the full report here.This article has been republished from Global Property Guide. You can also view this article at Global Property Guide, an international real estate news site.

REI BarCamp Provides Blueprint for Successful Real Estate Investing

RISMEDIA, June 10, 2010 - Real Estate Radio USA, a leading real estate multi-media company, is introducing a nationwide free training program, REI BarCamp, for individuals who would like to break free from the chains of what many have deemed a bad economy.

“Experiencing life-changing profits is not beyond anyone’s reach,” said Barry Cunningham, co-host of Real Estate Radio USA. “What has been missing for most people is the training and opportunity. REI BarCamp provides both.”


REI BarCamp is founded on the premise that competent training, coupled with open discussion and active participation from its attendees, creates the right environment for substantial profits.

“Anyone can make money in real estate,” said Barry Johnson, co-host of Real Estate Radio USA. “You just need to be given a blueprint that you can follow, and the support that you need when you have questions.”

REI BarCamp is the formula for successful real estate investing. Here is the information on the next REI BarCamp.

What: REI Barcamp – Fort Lauderdale

When: Saturday, June 19th (9 a.m. to 5:30 p.m.)


Where: Hyatt Place

91 Southwest 18th Avenue

Dania Beach, FL 33004

Who: Everyone and anyone who is interested in generating profits via the purchase and sale of homes and condos. Calling all Real Estate Investors, Realtors, Mortgage Brokers & Lenders, Title Agents, Appraisers, Home Inspectors, Virtual Assistants, Home Stagers and anyone else in the real estate world (or any other world) who wants to learn how to improve their income through successful real estate investing.

Experience Needed: No experience needed, but those interested in the camp who have successful experience should come and share their knowledge with all of the participants. A REI Bar Camp is designed to be an open forum for all.


Why: Everyone is there to help each other. No gurus or pompous experts. Just a group of like-minded individuals and business people who have an interest in networking, learning, and challenging each other to become better at what they do.

Cost: Absolutely FREE!

“The tips and strategies you’ll learn can benefit just about anybody. It doesn’t matter what your experience level is. Whether you are a stay-at-home Mom, a Realtor, or a new real estate investor, you’ll find REI BarCamp to be extremely valuable”, said Robin Sing-Cunningham, a Realtor with Access USA Realty.

Future REI BarCamps are being planned for Orlando, Atlanta and Tampa.

For more information, visit www.realestateradiousa.com.