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it is all the other factors which negates it as a rule . prices either fall in a rise or they don't . if they don't the rule is a bust and false .
it is like saying i am a multimillionaire because my income over my lifetime is a few million but my bills make me not one since i have less than a million dollar net worth . .it is all the other factors that make something true or not .
it does not change the fact that an increase in rates does not mean a thing as far as prices on homes going up or down .
if lower rates or higher rates determined home prices we all should have seen higher home values everywhere topping 2007 levels .
The only impact is the pool of potential buyers is decreased because fewer people can afford the payments at the higher rates. They will shop for a cheaper home.
depends on the area and local market . our market has just seen buyers step in from other country's with no problem paying the costs as they went up . this is why you can't have a rule .
The outer suburbs are usually the first to fall. They have the most oversupply of new homes and new buyers. The exception to the geographic observation is when there is a big condo boom in the city such as occurred with Las Vegas and Miami during the previous bubble. DC and NYC close-in were just starting to be affected in 2008. They're highly dependent on financial markets which were bailed out. The outer suburbs in DC were starting to be affected in 2006 and continued to be weak until the end of 2010 and 2012 in some cases. There was essentially a freeze on foreclosures at the start of 2013 due to the MERS scandal. State legislatures and courts forced the banks to give occupants at least two more years to work their way out of foreclosures.
it is all the other factors which negates it as a rule .
Fire is hot and can ignite nearby things that are combustible. That you can add water or chemicals to a fire so as to diminish or extinguish such effects does not alter the underlying nature of fire. The inverse relationship between interest rates and asset prices is a basic precept of financial economics. It is simply unassailable.
The outer suburbs are usually the first to fall. They have the most oversupply of new homes and new buyers. ......
Not where I live or other housing markets I know. The great recession greatly curtailed construction and now there is an under supply almost everywhere. There are a few exceptions: areas which were greatly overbuilt at the start of the recession and areas where the economy has been dropping for years with little hope of recovery. I can name several of those areas but they are still the exceptions.
Rude.....really? It's called reality check.........he will find out very quickly how lucky he really is by taking mortgage debt on hyped and overpriced real estate in Phoenix, AZ (speculator driven market) + being lured into debt with artificially low interest rates.
We have been protecting DEBT ADDICTS and DEBT LOVERS in America for way too long now. The FED has doubled our national debt trying to inflate housing bubble 2.0. and save over-indebted individuals and companies. Not to mention lowering interest rates to ZERO and punishing responsible Americans = SAVERS while protecting, bailing out + rewarding irresponsible Americans - debt junkies, broke and over-indebted individuals and companies.
I say let them all go BANKRUPT, allow interest rates to go higher and higher and allow bankruptcies and defaults to run wild. We need to cleanse our economic system, we need to destroy all this bad debt, especially debt taken after the end of a Business Cycle.....2001 and after.
Debt taken after the end of the Business cycle is CANCER. Cancer needs to be cut and taken out. How do we do this? We allow higher interest rates and strong US Dollar to crush and destroy all that bad debt.
Yes. Really. Even if your theories were correct, your statement would be no less rude.
Prices in a typical DC exurb fell by about 24% between 2007 and 2009, but have rebounded by about 26% since, creating a near break-even situation for the decade. In the background of course has been a dramatic yuppification of the city center alongside development of major tech and other job centers set in the suburbs. There is a lot going on. Things may not be susceptible to simple explanation.
Not where I live or other housing markets I know. The great recession greatly curtailed construction and now there is an under supply almost everywhere. There are a few exceptions: areas which were greatly overbuilt at the start of the recession and areas where the economy has been dropping for years with little hope of recovery. I can name several of those areas but they are still the exceptions.
There were bulk REO sales in 2010 to 2012 to take them off the market. Large private equity funds snapped them up and turned them into rentals. The understanding was that they would be kept off the for-sale market for at least five years.
The only impact is the pool of potential buyers is decreased because fewer people can afford the payments at the higher rates. They will shop for a cheaper home.
No that is NOT the only impact. There is another impact that you all are afaid off and that is LOWER HOUSING PRICES. But, our fellow Americans need lower housing prices our consumer based economy needs lower rents and lower housing prices so that our consumers can keep some of that hard earned money and save it or spend it on goods and services to support our economy.
Housing prices today are overinflated in some areas of the country by 50%-70% becuase of ZIRP and Fed's manipulations. ZIRP invited more speculators this time around then during our first housing bubble. Mom and Pop speculators from the first housing bubble were just replaced with professional speculators, Wall Street Crooks and Hedge Funds who bought entire neighborhoods in speculator driven markets like Phoenix, Las Vegas and etc. We are in a massive bubble and when this bubble implodes you won't see those crazy valuations in your life time again. The Fed won't be able to pump and inflate housing bubble #3 again. Many Americans will be left holding the bagg and end up poor for the rest of their life.
Higher interest rates will whipe out all phony paper valuations and gains from housing and will bring housing prices back to earth so that our fellow Americans can afford to buy a house again in their own country and not take massive amount of mortgage debt and be debt slaves for the rest of their lives.
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