US real estate market needs caution, expert warns

Creative Commons License photo credit: SeRVe61
The US real estate market is set to improve in the long run, but investors should avoid making “hasty decisions” a financial expert has said.

Michael Lombardi released a Christmas eve report saying he was cautiously optimistic for the future of the US economy and gave a thumbs up to interventions by the Federal Reserve.

But he warned against buying property or shares at the wrong time, noting there was more bad news to come from the current downturn.

Lombardi was writing in Profit Confidential, an investor newsletter popular with stock market and real estate followers.

He said:

“Great fortunes will be made in this recession by buying at the bottom – that goes for the stock market and real estate. The key is determining when that bottom is here.”

He also noted government intervention had been successful in aiding economic recovery during other events, pointing to the dot com crash of 1999 and the terror attacks of 2001.

Real estate advisory firm Zillow has confirmed other agency figures that interest rates on American home loans are now at historical lows.

The company noted many states are seeing below five per cent rates for the first time in recent memory, with weekly average rates for 30-year fixed mortgages at 4.96 per cent, down from 5.15 per cent a week earlier.

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