Palos Verdes Source

Yesterday, rumors were swirling that Bank of America may be buying the troubled Countrywide. This is good news for the financial markets and ultimately for our local real estate. This piece of news will add some calm to the aura of uncertainty surrounding Countrywide and other lenders who have been impacted by the subprime mess.

With the calming of the financial sector and the increased confidence it spawns, the perception of “everything is okay now” will encourage buyers to come back into the real estate market. It is such a matter of perception and the press has been very negative last year which scared many buyers and sidelined them with a “wait and see” attitude.

In addition, Federal Reserve Chairman Bernanke hinted at another rate cut. Marion Duffy, of ERA Orange County, says “that this announcement will have a very positive effect on our market.”