housing inflation or flatuation?

Discussion in 'Economics' started by loza, Jun 8, 2009.

  1. loza

    loza Guest

    I just cannot see this happen in the next 5 years...
    If the rates go up drastically the worse off is the US frigging Gov. as they cannot refi/borrow money. In my view they will fight this tooth and nail as they core power is in printing and doling out money (besides the military)....Now this(inflation) will eventually happen but the results will be a complete and utter disaster. So my money is on deflation first/stagflation follow and abyss as the final of the 1-2-3 punch....
  2. Who has said anything about housing 'inflation?'

    Prices continue to fall almost everywhere.

    There was a spike in sales in May, probably because of super low mortgage rates were available w/highly deflated home prices, but this 'spike' was relative to the massive declines we've seen and we don't even have a clue if this will last as rates are rising and the economy is getting worse.
  3. loza

    loza Guest

    well there are SOME of those who claim that hyperinflation is around the corner. These are usually the ones who horde gold and silver and ammo. I agree that inflation is coming (slowly) but powerful forces are blocking, manipulating certain price sectors. For example as I see it oil is the example of something they cannot manipulate, food and other products can be deflated by artificial means...
  4. Gold seems to be a hedge against fear rather then inflation. If Gold actually kept up with inflation it would about $6500 an oz since it was trading at $800 in Jan 1980.

    Gold is for trading not owning.
  5. loza

    loza Guest

    good point....my friend is a buyer/trader of gold and he made money so far but he would not tell me his yield.... :)
  6. Was it a spike in closed sales or pending sales?

    I was reading somewhere that people were writing ridiculous offers, hoping 1 in 10 would be accepted.
  7. With the 10-year and mortgage rates creeping up, the FOMC meeting June 23-24 should be interesting. It looks like more QE on the way, and despite its modest recovery over the last few days, the dollar should continue it's rollover on the news. And with the USD/SP500 negative correlation recently, where do you think that puts the index by August? 1050? 1100? Green shoots!

    The question is, will the increase in the index's value and resulting increase in consumer confidence offset the damage done by higher mortgage rates in the interim? I say yes for this go around. It's what happens after this batch of QE (Q4-Q1) that has me concerned (not to mention $4 gallon gas on an already strapped consumer, if the dollar continues its slide).
  8. Not sure guys.

    I do not there a floods of offers (REAL lowball) on REOs, and banks are now again holding back a WHOPPING TON of additional foreclosures they have in the wings for fear of the effects releasing that would have.

    I did hear that there's an absurd number of offers from investors on REOs being refused.

    I have heard directly from a local bank president that there's growing animosity between small and intermediate or large banks about the state of affairs - smaller banks are livid.
  9. You're saying inflation averaged 7.5% over the last 29 years?
  10. Arnie


    I would not consider residential RE a good hedge against inflation, unless you need a place to live, too.

    If inflation goes up, rates will go up. Considering the majority of houses are purchased with 90%+ debt, rising rates will keep a lid on demand as more and more buyers get squeezed out the market by higher payments.
    #10     Jun 8, 2009