This week the Italian automaker Fiat agreed to take a 35 percent stake in Chrysler – the struggling automaker forced to seek a federal bailout in order to simply survive. From the New York Times: “The speed and terms of the Chrysler-Fiat talks illustrated the emergency facing Chrysler, which was willing to give away more than a third of the company, essentially free. Yet the deal offers assurance to the Treasury Department and to the auto industry that Chrysler is attractive enough to find a partner.”
“For Fiat, the deal could mark a return to the only global market where it does not compete. Once the largest automobile company in Europe, Fiat has faces a series of challenges there in the last two decades from stronger rivals like Volkswagen, although it has strong global operations, including plants in China and South America.”
So what does this mean for real estate? Consider this same scenario happening just five years ago. The idea of Fiat taking a 35% stake in an American automaker was almost laughable. Now think about the number of home buyers – first time or step-up buyers- who five years ago may have thought their dream home was nothing more than that: a dream. They were the Fiat of home buyers, if you will! But now, given the current market and the $8,000 tax carrot being offered, the Fiats of the world are getting the big break they could have only dreamed of a few short years ago. Talk about shifting the market into high gear! Fiats of the world: seize the moment!