In the news: Rates were raised once again from 3.75% to 4%, where it had been since the last interest-rate raise on September 20. This is the 12th consecutive quarter-point increase since the Fed began gradually raising rates in June 2004. There is talk that Greenspan will increase a 1/2 point rather than a quarter point in their next meeting in December which may mean the rate increase may not be seen again in January. Nevertheless, even after Greenspan's departure, we can expect rates will continue to rise with the coming of the new Chairman Bernanke at a quarter of point each meeting, hopefully caping at 4.75.

What do I think may happen in California and Arizona's real estate which is where I do the bulk of my business and investments? These forseeable and expected increases may create to much of an anticipation in California among both sellers and buyers causing sellers to sell lower than the neighbor before buyers stop buying because they can no longer afford even an interest only loan. Another thing that could happen is another wave of foreclosures on recently purchased properties within the last year. Particularly the properties priced below the median price which were purchased with marginal loans by buyers who needed to get in before the rate hikes but may have been a little tight on making ends meet and stretched the numbers to obtain the loan.

In Arizona, on the other hand, buyers may experience an enhanced anticipation created by other out of state buyers that come from states with higher median home prices and CAN afford Arizona's median home price. This competition of buyers could create a bit of increased and favorable demand for sellers.

But then again - that is only an educated opinion. What do you think?