Fed leaves key rate unchanged

The Federal Reserve today announced it will maintain its target for the federal funds rate in the 0 percent to 0.25 percent range, and expects economic conditions to warrant exceptionally low levels of the federal funds rate for an extended period of time. “Information ... suggests that economic activity continues to strengthen and that deterioration in the labor market is abating,” the Fed said in a prepared statement.

“Household spending is expanding at a moderate rate, but remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software appears to be picking up, but investment in structures is still contracting and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability,” the Fed said.

To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve also said it will purchase a total of .25 trillion of agency mortgage-backed securities and nearly 5 billion of agency debt, and will gradually slow the pace of these purchases in order to promote a smooth transition in markets.

Source: California Association of Realtors

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How to Choose a Neighborhood - Wed, Jul 07, 2010

How to Choose a Neighborhood for Your Home Search

Narrow your home search by identifying neighborhoods that are right for you. This helps keep your search focused and efficient. Your local REALTOR® can offer neighborhood information to guide you in your search.

When evaluating a neighborhood you should investigate local conditions. Depending on your own particular needs and tastes, some of the following factors may be more important considerations than others:

• quality of schools
• property values
• traffic
• crime rate
• future construction
• proximity to schools, employment, hospitals, shops, public transportation, prisons, freeways, airports, beaches, parks, stadiums and cultural centers such as museums and theaters

Neighborhood Search Strategies for Limited Budgets

If you’re a first time-buyer with limited financial resources, it's wise to buy a home that meets your primary needs in the best neighborhood that fits within your price range. You can maximize your home purchase location by incorporating some of the following strategies into your neighborhood search:

• Upcoming neighborhoods: Look for communities that are likely to become "hot neighborhoods" in the coming years. They can often be discovered on the periphery of the most continuously desirable areas.
  Check for planned future development such as additional transit; new community services such as pools and theatres; and chain stores planning to move in.
  Look for a home in a good neighborhood that is a bit farther out of the city. If commuting is a concern, purchase a home that is close to public transportation.
• Neighborhood demand: Look at the neighborhood demand by asking your real estate agent whether multiple offers are being made, whether the gap between the list price and sale price is decreasing and whether there is active community involvement. You can also drive around neighborhoods and see how many "sale pending" and "sold" signs there are in a particular area.
• Co-ownership: Look into purchasing a condominium or co-op, rather than a house, in a desirable neighborhood. This way you still may be able to purchase in a prime area that you otherwise could not afford.