My Crystal Balls Say The Feds HAVE to Lower San Mateo County Interest Rates.

Why you ask?  Well, Ben Bernanke is worried about inflation and he’s worried how the housing market is dragging down the economy.  In fact, the housing market has been the engine that drives the US economy for some time, and unless something is done about this drag, we’ll see serious inflation hit us.  That’s not something this administration wants to see, for sure, and not something you and I want to experience again.  My crystal balls say the Fed will have to begin to drop interest rates again just to off-set inflation.  I also think a drop in rates might help to short-circuit the huge number of foreclosures hitting other parts of the country.

If they do drop interest rates, we will likely see a run on house purchases on our Fantasy Island.  What we won’t see is a drop in housing prices on the Island unless we see more listings.  We still have a shortage of listings on the Island.   If you don’t know about our Fantasy Island, you can read about it  here.

San Mateo County has been lucky to see few foreclosures.  At least so far.  Rumor has it that we are going to begin to see more of them in the City of San Mateo.  The majority of the foreclosures we are seeing right now are in portions of Daly City, South San Francisco and Redwood City.   What’s the average number we’re
seeing so far?  I’ve been tracking it from DataQuick for a couple of weeks and the most in one week has been 32 and last week there were 17.  Now, we aren’t a really big county, but even so, those aren’t
large numbers, are they?  I don’t think so.  But, I’ll keep tracking it for a while just to see what happens and comment on it again.

San Mateo County is in the middle of Fantasy Island.  This island runs from Marin County south to mid-Santa Clara County  (around Cupertino).  We are an Island of real estate that isn’t really affected by the rest of the Bay Area or the State of California.  We are in an area that has little new construction going on.  We are an area that was generally built out twenty to thirty years ago.  We have a strong economy, a very high cost of living, and because of this, high salaries.  If you live on Fantasy Island, and make a reasonable salary, you may either be a home owner already or soon be able to become one.  If you live on Fanstasy Island, but don’t earn above $80,000 a year, you’ll not be in the game.  We don’t have affordable housing here.  No one wants to have it in their town.  They fear it.  Read more about that here.

Those are the facts.  And I stick by them