As we approach the summer season it is time to look at where the market is. Inventory is just about the same as last year. It appears we may not see a big run up for the summer season. It definitely is a buyer's market and they are looking for deals. The lending environment is still very challenging, firstly to get a loan and then to actually have them fund. Escrows are taking longer to close due to lending issues.

Most buyers are still sitting on their hands afraid to jump in. The fear is that prices could go lower. Yes they could and yes they may not. Last month we offered an article featured in Time Magazine that showed the folly of waiting if interest rates went up. You actually could pay more in a rising interest rate market even if prices fell another 10%. Well, as we mentioned there were strong signs rates could rise and they have.

Here is a recent post in the Wall Street Journal, "Interest rates on mortgages have spiked in the past 10 days, and there's a serious risk that they're going get a lot higher. If you act quick, you can still find some good deals." With inflation accelerating the chances of higher rates increase. Long term rates are function primarily of expected inflation rates. Currently we have negative real short term rates and a very high level of capital formation in the US market (printing money). These two functions have always led to higher inflation and higher commodity prices. Hence the strong current commodity markets. The interesting thing to note is that the biggest commodity is real estate and since it is in a down cycle it currently is not rising with other commodities. Could this change?

Keller Williams is pleased to announce exciting news, O'Neal brokers in Lake Tahoe is now part of the company. O'Neal is long established company serving Lake Tahoe and Squaw Valley. This will provide you greater access to the Lake Tahoe market area if that is your focus.