You might be right for the frothy markets dropping another 25%. But this is the law of large numbers. I'm speakng about "most" locations. FWIW, I'm not trying to "scare" anyone. If anything, I'm offering a counterpoint to the drivel printed in the newspapers and giving an honest assessment based on what I'm seeing in my market and my experience. SM
Oh man, I gotta side with Pitz on this. High rates makes housing less attractive on a monthly payment basis, so people are less inclined to buy. Further, since buying is a substitute for renting, demand for rentals goes up. I think Pitz was talking about the mortgage rates, which are loosely correlated to the Feds rates. Also, Me and Pitz were not talking short term...at least I wasn't. SM
I agree with 90% of what you're saying here. I don't think it will bounce back like a dropped kitten in the short term (or for the long term), but I think payments are near a low. I was interested (and informed) by what you were saying about lumber prices...but I knew about labor. I believe that over the long(er) term, the eroding dollar will have to raise the costs of labor and materials because foriegn demand will drive it up. Prices on these goods will get relatively expensive to us Americans because our Dollar is weak, just like the laborers working in the Nike factories that couldn't afford to buy those shoes. Stupid anecdote, but I'm already seeing it in the classic car market....lots of cars that Americans can't afford are being shipped over to Europe right now because they can afford them. It is those type of market forces that will drive up the cost of our Lumber, and the laborers will eventually get fed up here and start demanding more money. So maybe in the short run there won't be a bounce, but I still think that if you're shopping for monthly payments, now is a good time to pull the trigger. From here, every successive month will mean higher and higher payments for the same houses. SM
This is the easiest myth to debunk; affordability, as a percentage of disposible income, is already non-existent. "higher and higher payments" on an item that is in surplus? Ummm, I don't think so . Unless, of course, you're referring to the removal from the market of products like option ARMs, and other 'innovations' that actually allowed people to make minimal mortgage payments, while their overall debt level remained the same or even rose. Then I agree .
And why do you assume it will be the same? You assume rates will go up - so what?You don't know that.You assume the real yield on T-Bonds is unsustainable but you don't know that either. It seems to me that you're predicting these things with huge confidence as if they've already happened but they haven't. Rates are low and there are some cheap deals out there,if that definition of cheap is outside of your budget then that's your fault.
I was countering the care-free comment that rates were "going up" - all you've pointed out is that rates in general have been cut.
Too early to scoop. That 350 will go to 280 soon. Time to bid at 280 and hope to catch a panic spike down early