Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
again , the fed has little effect on long term mortage rates by using their powers of adjusting short term rates . even when they dabble in buying bonds the dollars they commit in the scheme of things influences little .
remember when the fed ended QE and instead of rates on bonds and mortgages sky rocketing as the talking heads predicted they plunged .
just ask bill gross about his former thinking about the fed influencing long term rates when the worlds investors see things differently . he lost a lot of money betting on that being the case.
Last edited by mathjak107; 09-27-2017 at 05:53 AM..
Low interest rates are good for the bottom. They are irrelevant to the top end of the market, which doesn't deal in mortgages because they're all non-conforming.
The problem in NYC is that useful, close-in real estate is being used as asset parking, driving up the cost of commuter areas and pushing prices up in a ripple effect. We should tax foreign buyers and LLCs until it hurts, we should have an extremely progressive real estate tax, we should have MTA funding tied into new development and there should be a new Mitchell Lama program.
Low interest rates are good for the bottom. They are irrelevant to the top end of the market, which doesn't deal in mortgages because they're all non-conforming.
The problem in NYC is that useful, close-in real estate is being used as asset parking, driving up the cost of commuter areas and pushing prices up in a ripple effect. We should tax foreign buyers and LLCs until it hurts, we should have an extremely progressive real estate tax, we should have MTA funding tied into new development and there should be a new Mitchell Lama program.
But it's not even just foreign buyers. There is a legit demand for New York City housing, obviously more on the affordable end. Demand drives up pricing. According to many studies 70% of the world are going to live in urban cities due to automation. We have a reverse effect happening, before people fled to surburbs now it's the opposite
Interest rates of 8 or 10 percent would crash the coastal real estate market. So would the loss of tax incentives. The government is keeping this afloat.
Real estate prices grew dramatically each time the fed lowers interest rates in response to a national recession. This happened in the post 9/11 recession and this happened post /008 recession. Of course there are other factors like tax credits for developers, weakening on rent stabilization laws, etc. But it could not happen or maintain itself without low interest rates. If the fed were to raise interest rates substantially the market would crash.
Suddenly hiking the interest rates by a large amount would probably crash or stall several things. The interest rate is a factor in the sense that its one of manh factors at play, but this factor is present throughout the country but doesn’t end up in the same results everywhere. Oddly enough though, several cities in developed countries that are desirable and are at least somewhat foreign investor friendly seem to share in massively inflated housing prices despite not having the same borrowing interest rates.
Again, the interest rate is a factor as are many, many things. However, it doesn’t look to be the dominating or differentiating factor for whether housing prices are out of whack. Your analysis in that sense seems wildly off the mark.
Last edited by OyCrumbler; 09-27-2017 at 08:14 AM..
Suddenly hiking the interest rates by a large amount would help crash or stall several things. The interest rate is a factor in the sense that its one of manh factors at play, but this factor is present throughout the country but doesn’t end up in the same results everywhere. Oddly enough though, several cities in developed countries that are desirable and are at least somewhat foreign investor friendly seem to share in massively inflated housing prices despite not having the same borrowing interest rates.
Again, the interest rate is a factor as are many, many things. However, it doesn’t look to be the dominating or differentiating factor for whether housing prices are out of whack. Your analysis in that sense seems wildly off the mark.
I wonder how many companies employing millions will it take down in the process. I came across a headline on how it's boom time for leveraged loans especially cov lite deals that have fewer constraints, but higher rates than traditional loans. The overwhelming majority of these loans have a floating rate component to them. Just think what would happen if you suddenly triple the floating rate component. I would guess you can instantly say bye bye to millions of jobs. What good would it do if that 2 mil apartment is now selling for 750k when people don't even have jobs.
But it's not even just foreign buyers. There is a legit demand for New York City housing, obviously more on the affordable end. Demand drives up pricing. According to many studies 70% of the world are going to live in urban cities due to automation. We have a reverse effect happening, before people fled to surburbs now it's the opposite
Yes but the empty developments in the center of the city are putting extreme pressure on what used to be affordable areas of Harlem, Brooklyn and Queens. Foreign buyers are holding thousands upon thousands of square feet of prime real estate that is totally empty. This city needs to make it clear that if you want to invest here then you need to live here and pay taxes here.
If North Korea launches a nuke, and good old Russia and China backs North Korea. NYC real estate market will take it a hit due to Chinese and Russian investors pulling out of NYC real estate. Not only NYC, but Miami and San Francisco as well. A war with North Korea ultimately means war with Russia and China. So many Russian and Chinese investors have their assets parked here, that the US Fed will confiscate some, also plenty of these assets in real estate have not been fully paid as of yet, thus sellers will loose out on rest of their money if such scenario happens.
I due feel that interest rates have an affect on high price of real estate in NYC, but they are also other factors at play such as taxes, NYC real estate taxes are low for those in top brackets, the demand to live in NYC is another reason why real estate here is out of wack, tax brakes and tax abatments which are lucrative to investors and builders alike. All of which makes NYC rent and buying too damn high.
Yes but the empty developments in the center of the city are putting extreme pressure on what used to be affordable areas of Harlem, Brooklyn and Queens. Foreign buyers are holding thousands upon thousands of square feet of prime real estate that is totally empty. This city needs to make it clear that if you want to invest here then you need to live here and pay taxes here.
Just put a refundable annual surcharge that's roughly equivalent to what a NYC resident would pay in income taxes to afford the property. E.g for a 1 mil apartment a household should really rake in about 300k to live comfortably. On that 300k roughly 10k would go towards NYC income tax, so you just put that type of surcharge on every single property in NYC and fully refund it once the tax payer files their income tax as a NYC resident. This would guarantee that everyone that owns property in NYC puts in their fair share. We can throw in 1 year of free zoo admission just like the NYC id does to make them feel better. It's either this of just scrap the NYC income tax entirely and put in a 2% annual property tax on all properties based on purchase price with increases capped at 3%-6% annually depending on if it's a primary residence.
i always love the ideas people have for fixing things that always involve that idea kicking in after a point that does not effect them or something they don't partake in .
anytime a solution is given by an economist wanna be you know there is nothing that negatively impacts them much whether it is a tax ,a surcharge or a law
Last edited by mathjak107; 09-27-2017 at 09:22 AM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
