LYNNE FRENCH – REAL ANSWERS
Q. How is the problem with the fiscal cliff going to affect the real estate recovery and interest rates?
A. The so-called “fiscal cliff” is a combination of tax increases and massive government spending cuts that will hit the U.S. economy in 2013 unless Congress takes action before the end of the year. Most economists see the result of the fiscal cliff as something that will hurt the U.S. economy, with too many tax increases and spending cuts. I discussed this with one of my mortgage advisors, Jay Voorhees. He reminded me, first of all, that when stock prices go up, bond prices go down. And when bond prices go down, rates go up. With the fiscal cliff, such a threat to economic growth actually reduces interest rates. If an actual compromise is reached in Congress to avoid the fiscal cliff, stocks will rally and bond prices will drop. As he said, when bond prices drop, rates will go up. Voorhees says that the increases in stock prices and interest rates will be temporary though because the Fed will continue to buy up bonds in what they call their QE111 program, which is a pledge to keep interest rates down. So if nothing is done about the fiscal cliff, rates will probably go down. If something is done about the fiscal cliff, rates will probably go up, but only temporarily. It will help the real estate recovery because people will feel the confidence they need to make a move. I say this as long as they don’t mess with the mortgage interest deduction.
Q. We are almost ready to move into our new house. What are some moving tips?
A. It is never too soon to start planning the move. To-do lists are great so you don’t forget something critical. This is a great time to sort and get rid of things that you really don’t need. It feels good to start fresh with a lighter load.
When packing your boxes, put heavy items in smaller boxes. Try to keep all boxes under 40 pounds. Color-code the boxes for each room and label them on all sides. That way you won’t have to move boxes to see the label. Wrap every fragile item separately and use a packing material such as bubble wrap. You can purchase these at moving stores.
Back up your computer files before moving your computer.
Decide what items you are going to move on your own. You might want to carry valuables, breakables and items with sentimental value with you; also, items that the movers won’t take, like plants. Keep a bag with you that has necessities for that day such as snacks, tissue, medications, etc. Keep all documents pertaining to the move with you including the movers’ name and contact information in your phone or phonebook. Try to make arrangements for your children and pets to be away on moving day. This will spare them the stress of the move. When the movers arrive, inspect all boxes and furniture right away.
Send your question and look for your answer in a future column. Email Lynne@LynneFrench.com. French is the broker/owner of Windermere Lynne French & Associates and a Clayton resident. For any real estate needs or questions, contact her at 672-878 7or stop in at 6200 Center Street, Clayton.