Real Estate - Interest rates & the San Diego Market

The Fed - Rates & REAL ESTATE

By
Bob Schwartz, CRS, GRI©2005 www.downtown-san-diego-real-estate.com

Two important measures of inflation will be released this week. The
producer price index (measures prices at the wholesale level) will be released
on Tuesday, and on Thursday, the consumer price index (CPI) numbers for August
will be released. The Fed meets tomorrow (Tues.) and will boost the Federal
Funds rate .25 if it believes that rising energy costs will cause overall prices
to increase. Alternatively, if the Fed thinks Katrina and energy costs will
simply slow down the economy, it will probably pause in its systematic rate
hikes. My guess is that the Fed will bump rates .25 as a conservative move.

With the San Diego real estate market already having entered a major reversal, continued rate
hikes will only accelerate the trend. It's still hard to discern by the layperson, but soon all the

San Diego real estate talk will be about price depreciation vs. the just concluded multi-year double digit housing appreciation.

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ABOUT THE AUTHOR
Bob Schwartz, is a activeSan Diego real estate broker and certified residential
specialist with over 27 years experience in residential real estate. Bob is a
published author with real estate articles appearing in local & nation real
estate publications. Bob is also a expert witness in real estate litigation
matters for a number of San Diego legal firms. Bob's background as a committee member of the
San Diego Association of Realtors, local homeowners president and co-owner of a
San Diego real estate management company specializing in San Diego condominium management gives Bob in-depth insights into the San Diego real estate market. Bob's main San
Diego real estate site is: www.brokerforyou.com and bob can be emailed at: bob@brokerforyou.com