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Old 04-22-2013, 04:14 AM
 
Location: Sunrise
10,869 posts, read 13,638,218 times
Reputation: 8987

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Quote:
Originally Posted by Trader Joe99 View Post
Higher interest rates will kill real estate or housing interest AND will kill our baby recovery. When will housing reach a bottom: when interest rates are around 20%. Keep your powder dry.
I cannot believe that interest rates will hit 20% when the Fed is simply printing monopoly money. I'd be very much surprised if they hit 5% in two years. Or even 6% in five years. What are you basing your predictions on?

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Old 04-22-2013, 08:53 AM
 
Location: ( ͡ ͜ʖ ͡) (╯□)╯︵ ┻━┻ ̡
7,112 posts, read 10,852,083 times
Reputation: 3866
Quote:
Originally Posted by Trader Joe99 View Post
Higher interest rates will kill real estate or housing interest AND will kill our baby recovery. When will housing reach a bottom: when interest rates are around 20%. Keep your powder dry.

Higher interest rates will force prices down rapidly.

The best time to buy is when interest rates are at the top of their arc and prices are at the low of their arc. Buy a house at the bottom with a high interest rate — and then begin to refinance as interest rates fall.

It is INSANE to buy an overpriced house when interest rates are low. Where do you refinance too? You can’t refinance when interest rates start rising and housing prices fall.

We have another big leg down as far as I can tell.
Ok...

You are finally starting to make some sense, at least when talking about interest rates. I am currently at 3.1%. I know that I will NEVER EVER be able to refinance any lower than that(except to 2.7% if I switch to 15 years, which I may soon do)...

Anyway, IF interests rates climbed to 20%(which I don't think will happen) but lets say it did. How will this affect people like myself that purchased near the bottoms or investors? Investors will still receive their rental income and primary home owners still have a low mortgage. So what if properties are worth $30K?

20% interest rates would price a lot of people out of the market. Better to get in now than later.


Motorola DynaTAC 8000x
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Old 04-22-2013, 09:09 AM
 
Location: really close to Mount Si
391 posts, read 864,225 times
Reputation: 339
Quote:
Originally Posted by von949 View Post
" In 2006, Las Vegas had 112,000 workers employed in construction, a rate three times the national average. Today that number is under 35,000."




I don't think construction based employment will ever be that high again out here.


Motorola DynaTAC 8000x
I believe the home interest rates going the way of a Latin American country is a straw man's argument. One heck of a what if. More than the housing market will be having issues if something so radical occurs.

As for the linked article, the key point within it (on housing) is the effects of AB 284 and how the market may or may not be affected by it. "Shadow inventory", what have you. If that spigot opens up, the artificiality will go like APPL stock, which currently isn't good for those that bought at $700. Oops, lol? Now, how big a manipulation and whether or not all that inventory will open up and cause a sudden devaluation in the next five years (five years is my event horizon, others may be one year, etc) should be a concern for any smart homeowner or speculator. It definitely is for me and I'm neither.
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Old 04-22-2013, 09:51 AM
 
9,952 posts, read 8,441,593 times
Reputation: 5826
In the end most people buying houses to live in are payment buyers. Some have cash, but most need a mortgage. Given that, housing prices will inversely track interest rates. Assuming a buyer can afford the payment they bought the house at, they can always refinance to a lower rate if that's available. So basically a buyer is better off buying when rates are high. They'll pay a lower price. If rates drop, they can then refinance to a lower payment. If you buy when rates are low, and then rates pop, the value of the property will drop, and there's nothing you can really do about it.

Quote:
Originally Posted by von949 View Post
Ok...

You are finally starting to make some sense, at least when talking about interest rates. I am currently at 3.1%. I know that I will NEVER EVER be able to refinance any lower than that(except to 2.7% if I switch to 15 years, which I may soon do)...

Anyway, IF interests rates climbed to 20%(which I don't think will happen) but lets say it did. How will this affect people like myself that purchased near the bottoms or investors? Investors will still receive their rental income and primary home owners still have a low mortgage. So what if properties are worth $30K?

20% interest rates would price a lot of people out of the market. Better to get in now than later.


Motorola DynaTAC 8000x
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Old 04-22-2013, 10:25 AM
 
244 posts, read 285,939 times
Reputation: 204
Manipulation?

Las Vegas: a case study in successful housing market manipulation OC Housing News

"we have been here before and the market itself is not what is driving the price increases."
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Old 04-22-2013, 11:02 AM
 
244 posts, read 285,939 times
Reputation: 204
Manipulation?

Housing Recovery: Statistical Manipulation - Foreclosurepedia

"When the prices go back up; prices with respect to the mortgage backed securities (MBS)/toxic assets, we are going to see this new bubble burst. Smoke and mirrors folks; just another dog and pony show."
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Old 04-22-2013, 11:41 AM
 
26,886 posts, read 38,133,169 times
Reputation: 34831
Quote:
Originally Posted by von949 View Post
Ok...

You are finally starting to make some sense, at least when talking about interest rates. I am currently at 3.1%. I know that I will NEVER EVER be able to refinance any lower than that(except to 2.7% if I switch to 15 years, which I may soon do)...

Anyway, IF interests rates climbed to 20%(which I don't think will happen) but lets say it did. How will this affect people like myself that purchased near the bottoms or investors? Investors will still receive their rental income and primary home owners still have a low mortgage. So what if properties are worth $30K?

20% interest rates would price a lot of people out of the market. Better to get in now than later.

Motorola DynaTAC 8000x
We'd love to see this if the corresponding drop in prices would follow. Loan? What loan?
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Old 04-22-2013, 12:01 PM
 
12,973 posts, read 12,137,944 times
Reputation: 5398
Whole discussion based on the connection between interest rate and price.

However such a connection does not actually exist. Certainly an interest rate increase would tend to drive prices higher - but there are many other factors.

Here is a discussion of the subject including a Shiller chart showing it is not a very strong correlation.

How Rising Interest Rates Affect Home Prices - Daniel Indiviglio - The Atlantic

Las Vegas pricing continues to increase at a very high rate. Inventory remains low. So the probability is of a maintenance of the present trends.

There are a number of people out there projecting a downturn this year. No sign of it in the present data.
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Old 04-22-2013, 12:07 PM
 
5 posts, read 3,833 times
Reputation: 33
Default What about wages going up w/ inflation?

If we get some inflation then most wages will go up with it. So if you buy a home now with a mortgage at todays low rates you could pay it off sooner with the higher wages you would be making as long as the other goods you need to live off of do not get hyper inflated.
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Old 04-22-2013, 12:15 PM
 
Location: Sunrise
10,869 posts, read 13,638,218 times
Reputation: 8987
Quote:
Originally Posted by mrlocksmith View Post
If we get some inflation then most wages will go up with it. So if you buy a home now with a mortgage at todays low rates you could pay it off sooner with the higher wages you would be making as long as the other goods you need to live off of do not get hyper inflated.
Agreed. The reasons for "buy a house" or "buy a house quick as you can" and even "buy many houses" are compelling. This entire thread appears to be a debate between "people who have taken an economics course at some point in their lives" vs. "those who haven't."
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