April Home Sales Up 28% YOY (Chicago, Lincoln: apartments, loan, unemployment rate)

[trailblazer33]

There Are Two Housing Recoveries Going On in Chicago | Chicago magazine | December 2013

[Lookout Kid]

At this point, I'd be happy to just own a home that isn't dropping in value since my mortgage is locked in at 3.5%. And I think I've reached that point.

[trailblazer33]

1 in 3 Chicago homes "deeply underwater:"
1-in-5 American Homes ‘Deeply Underwater’ - Truthdig

[im_a_lawyer]

Originally Posted by Lookout Kid

At this point, I'd be happy to just own a home that isn't dropping in value since my mortgage is locked in at 3.5%. And I think I've reached that point.

It's hilarious watching the news and listening to people as they talk how right now is the time to buy because the interest rates are so low! Apparently none of you realize that low interest rates = high housing prices. As interest rates rise(which they will soon!), housing prices will go down. This is economics.
Your best bet is to lobby your local government for 'protective' zoning laws to artificially restrict housing supply then maybe then your shack will be worth half a million dollars. Just that is happening around where I live and is the only reason why housing is still expensive after crash. You're playing in the game in which only a few will win.

[jdiddy]

Originally Posted by im_a_lawyer

It's hilarious watching the news and listening to people as they talk how right now is the time to buy because the interest rates are so low! Apparently none of you realize that low interest rates = high housing prices. As interest rates rise(which they will soon!), housing prices will go down. This is economics.
Your best bet is to lobby your local government for 'protective' zoning laws to artificially restrict housing supply then maybe then your shack will be worth half a million dollars. Just that is happening around where I live and is the only reason why housing is still expensive after crash. You're playing in the game in which only a few will win.

You might be a lawyer (doubtful), but you're definitely not an economist. Just this year, interest rates rose significantly...and housing prices continued to rise! Its not to say that there is no relationship, just no where near what you seem to think.

Calculated Risk: House Prices and Mortgage Rates

[Ace Rothstein]

Originally Posted by jdiddy

You might be a lawyer (doubtful), but you're definitely not an economist. Just this year, interest rates rose significantly...and housing prices continued to rise! Its not to say that there is no relationship, just no where near what you seem to think.

Calculated Risk: House Prices and Mortgage Rates

Exactly. The biggest factor, besides the house itself, in regards to the price is the demand for the location.

[Attrill]

Yeah, demand for the location is one of the biggest drivers overall. The general economy also plays a large role. Interest rates? Not so much - even in the 80's when mortgage rates were in double digits there were significant gains in average housing prices. The bubble of 2000-07 wasn't even really driven by mortgage rates, it was driven by lax lending standards.

[im_a_lawyer]

Originally Posted by jdiddy

You might be a lawyer (doubtful), but you're definitely not an economist. Just this year, interest rates rose significantly...and housing prices continued to rise! Its not to say that there is no relationship, just no where near what you seem to think.

Well of course the prices will go up eventually especially when they were at a very bottom just few years ago. All those 4 bedroom houses for under 100K got snatched up pretty fast especially when government was giving away $8,000 to every new home buyer.
With low interest rates, people borrow more money = everyone having more money, the prices of whatever these people demand will go up. It's as if you gave everyone a million dollars and expect that Ferrari will cost the same amount of money.

Originally Posted by Ace Rothstein

Exactly. The biggest factor, besides the house itself, in regards to the price is the demand for the location.

Well home prices went up even though the city has demolished many more properties than it has built. You would think that more available land = cheaper housing but no... Location is not the biggest factor here as Chicago has plenty of land.

[Vlajos]

Originally Posted by Attrill

Yeah, demand for the location is one of the biggest drivers overall. The general economy also plays a large role. Interest rates? Not so much - even in the 80's when mortgage rates were in double digits there were significant gains in average housing prices. The bubble of 2000-07 wasn't even really driven by mortgage rates, it was driven by lax lending standards.

Agreed.

[jdiddy]

Originally Posted by im_a_lawyer

Well of course the prices will go up eventually especially when they were at a very bottom just few years ago. All those 4 bedroom houses for under 100K got snatched up pretty fast especially when government was giving away $8,000 to every new home buyer.
With low interest rates, people borrow more money = everyone having more money, the prices of whatever these people demand will go up. It's as if you gave everyone a million dollars and expect that Ferrari will cost the same amount of money.



Well home prices went up even though the city has demolished many more properties than it has built. You would think that more available land = cheaper housing but no... Location is not the biggest factor here as Chicago has plenty of land.

Uh, you just said low interest rates = high housing prices. Now you're admitting housing prices bottomed in a period of historically low rates, "of course". Those are two contradictory statements.

You're also assuming because interest rates are low, everyone can access these low rates. But while credit has eased, its significantly more difficult to obtain a mortgage than it was 5 years ago when rates were higher, on top of that, the amount of credit worthy borrowers is lower as well. Then of course, there's location, demand, everything else. You're Ferrari analogy just doesn't work.

So, you're wrong. I'd recommend you read through the link I provided and do some learnin.