Housing Rolling Along 2

Living in the same house but underwater by 50%.

QUOTE]Quote from lasner:

Where is this original poster now! Real Estate Rolling along...hahaha [/QUOTE]

 

[/QUOTE]

Real Estate is only going to get worse. Wait until we see 9 or 10% mortgage rates

 

I believe we are going to have worse inflation than the 70s, so that would mean we will have worse mortgage rates than the 70s. Since mortgage rates hit 17% back then, you can expect mortgage rates to hit 20% this time at least. If that happens....a house that is 200k today at 5% interest rates will have to go down to 50k at 20% interest rates to have the same payment. If wages get deflated on top of that, then expect a 200k house to go even lower than 50k.

 

That's a great point....I've been saying it all along.

The Fed is creating so much inflation eventually it's going to hit and you have to raise rates like they did in the 70's.

The really scary thing is that our whole country will go under if that happens. Banks aren't going to be able to sustain those rate increase.....it will put our whole country under.

The Fed has been suppressing interest rates ever since the dotcom bubble. They've been doing it to try to get us out of it....but eventually you have to raise rates and you have to take the pain.

 

Then your house should inflate in value along with everything else.

 

Stagflation is the fear of housing owners.
Not to say I know what to do.

I am about to lease a 3500 sq foot house in a good neighborhood in San Diego with an ocean view. The rent is a little below market but we were apparently the only applicants with great credit.

I am conflicted because I probably have enough to stretch and buy the house that I probably need for a family of some to be four kids.

Do I think that the banks can keep interest rates low for years. Or do I think the coming high interest rates and the future collapse of the commerical market will take prices down another big leg.

I have a feeling I will sign the lease on Monday. I would be pretty pissed at myself if I lost more money owning real estate.

I will say this this real estate market was not good for my equity but it has been great for my business.

 

but it's not that's the problem....oil has tripled and real estate has been cut in half

 

What's your business?

 

I am an attorney and a real estate broker.

I was a full time trader, but I lost most of my capital in florida real estate.

I moved back to San Diego. I had a blog that did so well, I was referring out 1-2 short sales a week. I eventually decided to negotiate and sell some of the short sales myself.

My brokerage has closed 40 to 50 short sales in the last 12 months.

 

Still waiting...