[lvoc]

Originally Posted by BBMW

They MUST mean lower housing prices, because the higher interest rates collapse the buying power of the mortgage payment.

Think what you want. When it hits we'll see the results. But ask yourself this, why has the Fed been suppressing interest rates if this is not the case?

The feds have been suppressing interest rates to prevent deflation. Nothing more. And successfully, If you check the standard economic discussion we should have been into hyper inflation years ago. Did not happen did it?

The buyer simply buys a smaller house. Does not required less houses. In fact buyers are buying less houses now with the low interest rates.

So little if any correlation.

[logline]

Originally Posted by BBMW

They MUST mean lower housing prices, because the higher interest rates collapse the buying power of the mortgage payment.

Think what you want. When it hits we'll see the results. But ask yourself this, why has the Fed been suppressing interest rates if this is not the case?

No. It's not a "MUST" for lower housing prices if people are earning more money at a faster pace than their dollars are losing value. (The value of the US dollar is actually up lately!) Pay attention to headlines. Fast food workers were striking across the country last week... some asking for $15/hr! Minimum wage debates are being fought in multiple states. Expect more strikes. And that's just the lower wage workers. I don't know a single person who is making the same or less than they were making in 2008, do you? If so, they're far outnumbered.

2 minutes and a simple google search will prove that higher interest rates are not necessarily correlated to lower house prices. You are only looking at a small part of a much bigger, more complicated economy once interest rates rise. You have to ask yourself why they would be rising.

My entire point is that there is often an OPPOSITE effect on the market when wages are rising and the velocity of money finally picks up.

You're right about the Fed pumping money into the system and that actually proves my point. When the velocity of money goes up (which currently is at a standstill), what do you think the most important thing to do is? BUY HARD ASSETS. I'm just looking at historical, real-world data. This is nothing controversial.

If your point is that the Fed is stupid to do this, you'll get no argument from me. Everything is way out of balance and there will be big losers and big winners when we revert to the mean, but it may not play out the way you think it will.

M1 Money Multiplier - FRED - St. Louis Fed

[ND_Irish]

Originally Posted by ddrhazy

Put your money where your mouth is Irish. Sell your house and start renting if you believe the burst is looming.

There are other ways for one to put their money where the mouth is with regard to where the economy is heading. Further, I did put my money where my mouth was by buying a home in this area when everyone was negative about housing. I am perfectly happy with my house, and it serves its primary function quite well which is to provide shelter for my family.

[ND_Irish]

Originally Posted by logline

All historical data to the contrary:


Draw a line on that graph and extrapolate the long term trendline. Where does that line intersect with 2014?

Again... this has all been discussed here before.

Based on June 2014 S&P/Case-Shiller data, I would say it is doing exactly as I said. I think posting this graph is highly misleading. You ought to post one with up-to-date data. The index as of June 2014 stands at 135.12 which is significantly higher than the last data point on the graph you posted.

[logline]

Originally Posted by ND_Irish

Based on June 2014 S&P/Case-Shiller data, I would say it is doing exactly as I said. I think posting this graph is highly misleading. You ought to post one with up-to-date data. The index as of June 2014 stands at 135.12 which is significantly higher than the last data point on the graph you posted.

It was not meant to be misleading at all. I just can't find a current chart past 2013 when I search for "case shiller las vegas chart". Even so, extending the trendline to 2014 would imply the index should be over 150.

If there is a mean reversion, it's to the upside, not the downside.

[ND_Irish]

Originally Posted by logline

It was not meant to be misleading at all. I just can't find a current chart past 2013 when I search for "case shiller las vegas chart". Even so, extending the trendline to 2014 would imply the index should be over 150.

If there is a mean reversion, it's to the upside, not the downside.

I think that is being generous. I believe it would be closer to 125. In any event, we'll have to agree to disagree on this one.

[ddrhazy]

Originally Posted by ND_Irish

There are other ways for one to put their money where the mouth is with regard to where the economy is heading. Further, I did put my money where my mouth was by buying a home in this area when everyone was negative about housing. I am perfectly happy with my house, and it serves its primary function quite well which is to provide shelter for my family.

But if you believed that the housing market is about to burst again then the most financially wise option would be to sell your current place and rent till the burst happened.

[bayview6]

Las Vegas is not facing a real estate bust, even if interest rates creep up. The demand for ownership of a home is solid. Just read the pages of City-Data to see that plenty of folks want to buy, not rent.

The plain fact of the matter is that real estate for sale in the Valley is reasonable priced.

[logline]

Originally Posted by ND_Irish

I think that is being generous. I believe it would be closer to 125. In any event, we'll have to agree to disagree on this one.

The graph clearly shows the trendline was at 125 back in 2003.

[ND_Irish]

Originally Posted by logline

The graph clearly shows the trendline was at 125 back in 2003.

While not as dramatic as in later years, 2003 pricing in Las Vegas was above the long-term trend line, not on it.