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Surprised there are a few key details being overlooked in this thread, which I've stated before and will re-iterate.
Prices can still fall in inflation adjusted dollars, but are probably not going to fall much further in real dollars. Europe and Japan have publicly announced plans for QE-Infinity to combat deflationary pressures in everything except hard assets, and there is a war of competitive currency devaluation working at full steam.
Your average joe in the US has wised up to the fact their savings and investments are no more safe in stocks/bonds than it is in hard assets, of which real estate is the most accessible. The demand should not abate, even if rates rise, unemployment ticks up, and Congress limits or takes away the mortgage interest tax deduction.
You see the above on the high and the low end; guess what all those newly minted tech millionaires in SF are doing? They're cashing out their stock and buying homes in cash. They're doing so on the advice of the billionaires they know. Billionaires are buying everything they can eat, grow, move or collect around the world and dumping paper wealth, be in stock or currency to us average folks.
On the other side of the spectrum - I can't find a decent contractor to do a smaller (10k) home improvement, because most of those worth hiring are buying properties, mainly to rent but a few to flip.
Finally, the boomers are starting to hit retirement in droves, and they are cashing out their stocks, bonds and their homes. There is a lot of inventory which should hit the market soon, but it may not be enough to soak up demand from a growing population here in the US. Hard to say, but it is likely to keep any rabid price appreciation in check. Of course, that's just speculation. 2013 will tell us a lot.
So bottom line is what it has been for at least a year. If you want a house, can afford it, have job security, and want to buy in a desirable area, just jump in. Worst case, RE declines but it will still outperform the stock and bond market over the next 2-3 years, and most certainly over the next 5-10 years.
The United States has remained above most of the currency problems over the last 235+ years.
I work with people from around the world... many European currency was worthless as a result of wars... countries in Asia, Africa and south America have also had their share of currency problems...
My German friend's father had given him some US currency from the 1930's... about $200 in twenty dollar bills... he was surprised they could be spent just like a new $20 bill... because this has not been the case in much of Europe where the currency is gathered and re-issued of devalued to the point of worthlessness.
Another friend lives in Austria and when his Grandparents sold their little plot of land... the contract called for so many pigs, lumber, milk, cheese, etc for so many years... the old farmer was not going to be stuck with worthless paper money because he could either eat or sell the commodities... hope it never comes to that here.
A number of people I work with have been buying old farms for their plan B... mostly in Oregon, Washington and Idaho and Colorado... water, arable land, etc...
It will depend upon your region, as others have stated. Unemployment numbers are down but wages are also down. Taxes are higher, too. Do not expect a rapid growth but I think we're near the bottom...I think it's a good time to buy before mortgage rates start to climb. Amortization over the course of your loan by saving X dollars in sales price may be offset by the higher interest rate over the life of the loan.
Depends on your area. In my area, prices are up, demand is up, and inventory is down. The right time to buy was 12-18 months ago. I do not anticipate prices falling any time soon.
For other areas, maybe they will.
I will say this though...interest rates are rising. Even if prices drop in your area, you still might not qualify for any more house because of rising rate. Unless you are paying cash, I think now is better than later. And even if you are paying cash, in some areas, prices are already rising.
I suspect that prices are through dropping in my location. I'd suggest that you start to worry more about interest rates. It's no bargain to get a house for $10,000 less but have to pay 2% more interest. These low interest rates can't last forever.
That is exactly what I have been thinking. Had this discussion with hubby this morning.
Depends on your area. In my area, prices are up, demand is up, and inventory is down. The right time to buy was 12-18 months ago. I do not anticipate prices falling any time soon.
We ended up buying two houses (ours plus a rental) during that time period, LOL. Both have increased in value since then...
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I will say this though...interest rates are rising. Even if prices drop in your area, you still might not qualify for any more house because of rising rate. Unless you are paying cash, I think now is better than later. And even if you are paying cash, in some areas, prices are already rising
We've refinanced both houses twice already. From 5.25 (purchase), to 4.25, to 3.75. Working on moving both to 15 yr loans right now.... My husband would like to sell the rental house and our current condo and buy one larger house to live in over thenext couple years but I don't see it happeneing - I think interest rates will be much higher and I can't see making a larger payment not for more house but merely to pay high interest rates...
Goal with moving to 15 yr is to have houses paid off well before retirement and because we both think there is a chance that the gov't may do away with the tax benefit on interest (maybe not on our resisdence but the rental for sure)
Even out here on the thinly populated Texas high plains home prices, although still extremely reasonable as compared to most places in the U.S., have been rising. In this fairly rural Texas south plains county, we've seen a rise of over 12% in the past year. I've also been watching Albuquerque since I have a westside home there we plan to sell, prices have risen almost 6% in the last quarter for my neighborhood.
The United States has remained above most of the currency problems over the last 235+ years.
I work with people from around the world... many European currency was worthless as a result of wars... countries in Asia, Africa and south America have also had their share of currency problems...
My German friend's father had given him some US currency from the 1930's... about $200 in twenty dollar bills... he was surprised they could be spent just like a new $20 bill... because this has not been the case in much of Europe where the currency is gathered and re-issued of devalued to the point of worthlessness.
Another friend lives in Austria and when his Grandparents sold their little plot of land... the contract called for so many pigs, lumber, milk, cheese, etc for so many years... the old farmer was not going to be stuck with worthless paper money because he could either eat or sell the commodities... hope it never comes to that here.
A number of people I work with have been buying old farms for their plan B... mostly in Oregon, Washington and Idaho and Colorado... water, arable land, etc...
It is coming to that here. Since I'm lazy I just flipped over to this board's Iowa forum, and this is one of the first threads I saw: Iowa farms minting millionaires
I don't think all currency will be worthless, but some currencies most definitely will. The US stayed above these issues for much of its 235 year history by staying out of world affairs, backing the dollar with actual gold, and using its military to promote its interests from WWI onward.
My main point, and maybe it wasn't clear, is that land is a thing, and a house is a thing. A home is just sticks and bricks, but it costs a lot of money to build a new one, so a home does hold some amount of value, especially in the growth engine areas of the 21st century.
The really rich are buying every physical thing they can. They are unloading paper wealth at an incredible clip. Be like the rich. Own things which have intrinsic value. Don't worry about home prices falling because if they fall dramatically, the world will have much larger issues to address.
The really rich are buying every physical thing they can. They are unloading paper wealth at an incredible clip. Be like the rich. Own things which have intrinsic value.
I'm not rich but I agree. The so-called financial whiz kids in D.C. have not yet learned how to print land and real estate like they are printing dollar bills.
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