[Mike Peterson]

Originally Posted by nychiefsfan

What makes you believe the prices won't drop more than that?

Why would interest rates continue to climb during a housing recession?

Fed Reserve Chairman Bernanke recently expressed concern regarding the housing slump and it's affect on the economy.

I'm pretty confident that the prices will drop more than 250k for what I'm looking for. If they don't, I'm okay with that too.

Demand is still there, though not as great a demand and there is an over supply but as prices stabilize or come down slightly some of those waiting on the sidelines will buy.
I also believe a good amount of people in Florida who had issues with taxes and were moving for that reason may decide to pull their homes off the market now that there is the possibilty of much lower taxes.
This will ease the over supply somewhat.

As far as that and the interest rates we are all working with "ifs".

Remember "If the Queen had b&$$s she'd be the King"

I'm ok with you being ok with it.
We will have to agree to disagree.

[rstate]

Originally Posted by nychiefsfan

Why would interest rates continue to climb during a housing recession?

Fed Reserve Chairman Bernanke recently expressed concern regarding the housing slump and it's affect on the economy.

There are many factors that drive long term interest rates including several global influences. A "housing slump" isn't going to keep interest rates down if other factors are driving it up. If you're going to project buying a house in a year from now, you probably want to run several interest rate scenarios and not just think that the rates will stay flat.

[afghan67]

Originally Posted by kort677

Like I described in an earlier post, you are ignoring the math and the facts and acting irrational over what should be a simple mathematical transaction.
At your price point, we'll call it 200k, lets' say that you're partly correct and that house goes down to 160k, do you realize that your payment would be a whole $40-50 a month less on a 30 year mortgage? how much are you currently pissing away in rent? If you did the math I'd think that you like most people would be better off owning.

Even under your scenario, if the buyer had to sell quickly (e.g., job relocation), that person just lost $40,000.

[afghan67]

Originally Posted by Mike Peterson

I have to disagree with you here.
If rent did not cover a landlords mortgage, why would anyone ever buy property to rent out?
I understand there may be some owners out there now that just bought and are renting temporarily waiting to see what the market does. They may not be covering their note but for the most part landlords cover their note and make a profit.

Not the speculative investors in Orlando, Florida. They bought houses in the 300s and 400s that they are now renting at well under $2000 a month. With a mortgage, taxes, insurance, HOAs and maintenance, that math doesn't work.

It's all about minimizing losses for them.

[afghan67]

[quote=Mike Peterson;923083]Demand is still there, though not as great a demand and there is an over supply but as prices stabilize or come down slightly some of those waiting on the sidelines will buy.
QUOTE]


Demand is there for luxury houses and houses that have had drastic price reductions. The current demand is not enough to ease the glut of houses on the market.

And prices will not stabilize until the inventory goes down. You are putting the cart before the horse. If inventories stay high, prices will continue go down because of all the sellers competing against one another.

[Obrero]

written by my friend:

I have reiterated many times why home prices will take a tremendous beating for the next 3+ yrs. Rising interest rates, tightened lending standards, slowing economy, and decreased demand (due to less speculation). Any ONE of those things could cause price declines, but all three leads to the possibility of one hell of a downturn (especially considering the recent run up, and considering all these factors were working FOR real estate for yrs). If someone can explain to me how interest rates won't rise, how the economy is actually doing great, and/or lending standards aren't being tightened then I'd say you have a case. All the current issues will lead to home prices dropping, definetly not rents rising dramatically. I find it amazing that there are any housing bulls still out there. It's funny to hear the ex-head cheerleader Lereah bad mouthing housing now that he's been dethroned as head housing cheerleader of the NAR

[Mike Peterson]

Originally Posted by afghan67

Not the speculative investors in Orlando, Florida. They bought houses in the 300s and 400s that they are now renting at well under $2000 a month. With a mortgage, taxes, insurance, HOAs and maintenance, that math doesn't work.

It's all about minimizing losses for them.

Yes, but you are talking about the exception then, not the norm.
The majority of homes that are rented out are not owned by speculators

[nychiefsfan]

Originally Posted by Mike Peterson

Demand is still there, though not as great a demand and there is an over supply but as prices stabilize or come down slightly some of those waiting on the sidelines will buy.
I also believe a good amount of people in Florida who had issues with taxes and were moving for that reason may decide to pull their homes off the market now that there is the possibilty of much lower taxes.
This will ease the over supply somewhat.

As far as that and the interest rates we are all working with "ifs".

Remember "If the Queen had b&$$s she'd be the King"

I'm ok with you being ok with it.
We will have to agree to disagree.

You seem pretty cool. You, obviously, tell it like it is. I respect that, even though we may not agree on this topic.

Time will tell.

[afghan67]

Originally Posted by Mike Peterson

Yes, but you are talking about the exception then, not the norm.
The majority of homes that are rented out are not owned by speculators

Doesn't look like the exception to me. Look at all the rentals for houses under $2000 per month. Then take a look at representative asking prices in these neighborhoods:

Rental Properties

[Mike Peterson]

Originally Posted by afghan67

Doesn't look like the exception to me. Look at all the rentals for houses under $2000 per month. Then take a look at representative asking prices in these neighborhoods:

Rental Properties

Ok, so I looked at them and the majority were built before 2003.
This seems to prove my point.
It does not matter what the asking price is, it matters what the owner of each particular house paid for that house and what their mortgage is.