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Agreed. I am glad you realize you are not making much sense.
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but I think people rushing to buy expensive homes due to low interest rates are
being foolish.
The foolish ones are those who wait and watch prices go up, and then buy. The smart one bought 1-3 years back, and it is still a good time to buy, but if you wait a year or two, you'll be looking at higher rates and higher prices.
Closed 5 years ago, that was perfect timing.. I'll be waiting another year before I unload and double my cash..
*chuckle*
Yep, sell it high, wait for the burst with high interest rates, let your money sit and make good return, then when the housing market flat lines, go back in and buy another home for an 1/8 of the cost.
The foolish ones are those who wait and watch prices go up, and then buy. The smart one bought 1-3 years back.
Actually, those people overpaid (though it depends on where they were at). Interest rates will not allow homes to stay in the 300-500+ range. People can not afford it. One of the reason home prices are so severely stupid is because people banked on "minimum payments" rather than looking at the homes natural value.
Barring Nanny Government trying to pick winners in the market again, home prices will drop dramatically with high interest rates. Look up the minimum payments for a home at 8% for 300k, its around 2200 a month and that is without property taxes or insurance. That is 26,400 a year, just for the home. Home prices aren't going to stay as such, they will drop.
Be my guest though, bet on your home holding value. We will see who wins out on this one. I said the same thing last time there was a boom starting. There is another crash coming.
Actually, those people overpaid (though it depends on where they were at). Interest rates will not allow homes to stay in the 300-500+ range. People can not afford it. One of the reason home prices are so severely stupid is because people banked on "minimum payments" rather than looking at the homes natural value.
You think people overpaid in 2009 when properties were dirt cheap? You are mistaken. I picked up properties then, and I can assure you I did not overpay. Since when is a car supposed to cost more than a house?
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Be my guest though, bet on your home holding value. We will see who wins out on this one.
I think I will keep the ones I have because they are bringing in good money in rent. Of course if the market overheats like it did in 2007, then I might sell and wait for another crash, but the values would have to increase a heck of a lot before we get to a "overheated" situation.
Sales and demand are surging but many were trying to beat the increase in Interest rates.
Rising Rates can cause inflation with people buying before rates increase.
Remember the 80's when rates went to 12-17% ?
It's back and the spiral of Inflation is real.
It sounds like the increase in interest rates is helping the economy.
It depends on their location, but if they live on the coast, it's likely that the value of their house is highly inflated anyway. Even if they don't, artificial interest rates, and things like HELOCs have caused housing to be overvalued.
So, how do you expect someone to be able to sell their inflated house when interest rates are rising, full time jobs are not being created, and wages are falling?
Who can afford to buy the house?
A foreigner? You should be so lucky.
The price is not inflated because they live closer to the coast. Location is 99.9999% of what drives real estate value.
Every home closer to the coast or closer to vast amanities and job oppurtunities will have a higher asking price.
No, we were not in middle of it in 2003, although things were starting to heat up a little. I bought my house in 2003, and by 2007 it had nearly doubled in value, and then things crashed.
The housing bubble started in the 80's. Obviously we weren't at the height of the bubble (as we were in 2007), but that doesn't mean the bubble wasn't already forming. I said we were in the middle of the bubble, not at it's peak.
There will soon be another housing buble burst. It is now better to wait for housing prices to crash again. We still export the good jobs and still encourage the very cheap foreign labor to come here.
The housing bubble started in the 80's. Obviously we weren't at the height of the bubble (as we were in 2007), but that doesn't mean the bubble wasn't already forming. I said we were in the middle of the bubble, not at it's peak.
OK. I was talking about the "surge" in prices which begun around 2003.
This chart shows the home price increase didn't really jump away from wage increses until around 2002, altough there was a trend which started a long ago. From 1990 to 2000 prices and wages rose at the same pace
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