Fri, 09/21/2007 - 4:55pm
Downtown Orlando developer Cameron Kuhn, who built a portfolio worth more than $100 millionÂ saidÂ Thursday he expects another bubble before the market stalls and falls again.Â Speaking to gruop of small business operators and owners in a panel discussionÂ Kuhn said this weeks rate cut by the Federal Reserve by half a percentage point will probably help reinflate home sales and prices in theÂ short term. "You will have another residential bubble," Kuhn predicted, noting that the nation's central bank is planning on injecting more capital and liquidity into the market to prevent a possible recession, a downturn some economists fear might be sparkedÂ by the slowdown in theÂ housing marketsÂ nationwide. "There is no way to offloadÂ the current housing inventory," Kuhn said of additional homes and condos that will beÂ built and sold as a result of an easing of lending and credit restrictions. I strongly disagree with MrÂ Kuhn. Please Mr. Kuhn, explain to me how the recent rate cut will increase home values and reinflate home sales in the short term? The rate cut does not directly affect mortgage rates, however it will reflect lower rates for homes equity lines of credit and second mortgages which are tied to the prime rate. The mortgage rates have actually increased by a quarter of a point since the Fed's cut this week! Â What were you thinking Mr. Kuhn or maybe the question is were you thinking when you made those irrational statements? Now, regarding the statement claiming the existing and new inventorty of homes will be sold off as a result of easing of lending and credit restrictions however that is not the case in the current lending environment. Fannie Mae and Freddie Mac the nations foremost purchaser of mortagages has STOPPED buying loans over the amount of $417,000 which is considered jumbo status therfore requiring the originating lender to portfolio their loans. Does this sound like theÂ easing credit restrictions, certainly not Mr. Kuhn. So, Mr.Â Kuhn, tell me when this next bubble will begin to form? I can't wait to hear your responseÂ to this question! Â With over a recordÂ 26,000 exiting homes for saleÂ in the Orlando region and a challenging lending environmentÂ don't expectÂ anotherÂ housing bubbleÂ anytime soon....and you can bet on that!