Market Watch Report March 2008

You have to like this, while Bear Stearns was going down last week, its former CEO and current non-executive Chairman James Cayne was what right on top of the situation. He was playing in the North American Bridge tournament in Detroit. He fared much better than his company, coming in 4th out of 130. And you wonder how we found ourselves in this financial mess. By the way, if you haven’t heard, Bears Stearns is being taken over by JP Morgan. I guess James is out of a job. The good news is, he can play more bridge. My only hope is that someone wakes up in our government to corral these cowboys because they have certainly created a stampede.

Earlier this month we experienced a barrage of unsavory news. The Bear Stearns meltdown was the highlight. The stock market’s volatility still sends out waves of uncertainty to the public. This in turns makes those contemplating buying a home more cautious and reticent.

We are nearing the midpoint of this cycle. For the first time in many months we are seeing articles that are focused on the opportunities that exist in this bear housing market and that the word recovery is now entering the discussion. I have attached two such articles one written by Jonathan Clements of the Wall Street Journal outlining buyer opportunities in a sinking real estate market and the other by Eileen AJ Connelly of the Associated Press discussing that even given the present instability of the stock market, there is light at the end of the tunnel.

The Jonathan Clements article points out that for the move up buyer, the second home buyer, the parent thinking of helping their children with their first home and for those first time buyers who have been waiting for the right time, that time could be now.

Continuing in the same vain, Connelly states that while volatility isn’t going to disappear overnight, some experts suggest the market may be near the beginning of a recovery. Further she goes on to quote Brett Hammond the chief investment strategist for TIAA-CREF Asset Management, saying while it might take a few more quarters before the markets show signs of real strength, “ the chance of there being a much further downturn from here are less than there’s going to be an upturn.” Illustrating that we could be beyond the mid-point of the current cycle.

This is a good sign when the press begins to talk in these terms. We still have some pain to endure, but this market offers real opportunity for knowledgeable buyers and there are plenty of them out there.
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