Bailout Will Take Time to Have Impact
Published: October 07, 2008
By Anuradha Kher, Online News Editor, Multi-Housing News
New York–Days after the $700 billion financial bailout package was signed into law, the stock market continued to tumble. In the longest losing streak since January, U.S. stocks fell for a fifth day today.
Meanwhile, the Fed is now considering new actions to do some more damage control in the financial system. The Fed said in a statement this morning that it would begin to buy large amounts of short-term debt in an effort to stimulate the frozen credit markets. In addition, Chairman Ben Bernanke today hinted strongly that the Fed’s Board of Governors would probably lower interest rates at its next meeting, on Oct. 28 and Oct. 29, at least for the long term.
“There is no question that the market is moving sideways right now,� Lisa Maysonet, executive vice president, Prudential Douglas Elliman and founder, Group Maysonet, tells MHN. “But people on Wall Street have seen this coming for months, so it’s not a shock or a flood for them. The market has slowly been eroding, which is a natural healthy way of correcting itself. The tide comes and the tide goes.�
While many real estate developers complain that credit has all but disappeared, Maysonet is looking at the situation more positively.
“Our multi-housing inventory is down 8 percent from the last year. There is a glut of new development coming on the market and it remains to be seen how that will be absorbed. But basically, there are some indicators that are down and some that are up,� says Maysonet. She adds that for now, the multi-housing real estate market is pretty resilient. Activity is definitely down, 26 percent or so, condos are taking longer to sell, but there is still a lot of activity. Foreign buyers are still interested in New York.
“There is no doubt that people are affected psychologically by what’s going on in the stock market,� she says. But we need to keep in mind that “things are in the process of moving from crazy to normal and they are not as bad as they are made to look. Everything will work itself out. The financial bailout is like medicine and it will take time to make some impact,� explains Maysonet.
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