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A reduction in the mortgage rates isn't going to create a bottom, at best it will slow the declines and prolong a correction. The drop in rates will just increase demand a bit, but inventory is so high it won't have that much effect.
A reduction in interest rates doesn't magically make houses more extensive. Who is stupid enough to pay more for a house because the interest rate is less when there is plenty of such houses. If anything they will perhaps buy a slightly nicer home. But that isn't going to increase prices. A drop in interest rates would only effect prices if demand started to out strip the supply of homes. And in a normal market this can happen, but the supply of homes now is huge and will take a long time to burn off.
I'm not sure what they are thinking with trying to lower ates. But most likely they are trying to build support for some sort of button, I don't think they are deluding themselves into thinking they can keep prices inflated. Rather they want to prevent the markets from over correcting. Much the same thing was done in the depression. Interestingly, in most of the country real estate didn't decline much during the depression.
And Humboldt1, when you stop talking about buying investment properties then that is probably a good time to buy = ) Still not worried about losing your job? Rents declining? etc. Investing in real estate in the next few years is going to be a complete gamble. There are so many unknown variables its impossible to make any sort of meaningful projections on what sort of return you'll get. Those buying investment properties are drinking the Kool-aid of days past.
You are one of the last folks still in the denial stage in the Kubler-Ross model. Even the last of the real estate suckers have moved on to anger or bargaining.
No one really believes most of the anecdotal information offered by those in the real estate industry. That dog just ain't gonna hunt anymore.
Yeah, it seems even the Realtors here on city data are starting to change their tone.
Here in California many are starting to lose their homes. I know of a few personally. They drunk their own poison. I don't know...it sorta puts a smile on your face.
I think I'm tired of hearing about it. You won't change others minds just like they won't change yours. Life goes on, I've been incredibly busy the last week and a half with buyers. I see activity right now. I think my market will be back solid by mid to late spring.
Quote:
Originally Posted by ViewFromThePeak
You are one of the last folks still in the denial stage in the Kubler-Ross model. Even the last of the real estate suckers have moved on to anger or bargaining.
No one really believes most of the anecdotal information offered by those in the real estate industry. That dog just ain't gonna hunt anymore.
ViewFromThePeak, I don't know if you're familiar with where he is talking about, but I agree with Brandon. In Columbia, the university, U.S. military, state government, healthcare, professional law/accounting etc., are all clustered there, and the economy in that city has proven to be nearly recession-proof. Also, just as important, prices there didn't inflate very much. Developers overbuilt one side of town, I think, but I know people who paid great prices in great neighborhoods, even in 2005-2006.
ViewFromThePeak, I don't know if you're familiar with where he is talking about, but I agree with Brandon. In Columbia, the university, U.S. military, state government, healthcare, professional law/accounting etc., are all clustered there, and the economy in that city has proven to be nearly recession-proof. Also, just as important, prices there didn't inflate very much. Developers overbuilt one side of town, I think, but I know people who paid great prices in great neighborhoods, even in 2005-2006.
All of the industries you mention are service based industries, including the military. The military WILL be contracting regardless of who was elected. Bases WILL close. Accountants/lawyers will lose their jobs or close their practices. Healthcare WILL contract, and state coffers will be running on empty. Anything related to services will be affected. Of course, not every practice/business will close, but SC has practically ZERO manufacturing to speak of and thus isn't properly diversified.
Even in the "invincible" Triangle area of NC the cracks have been appearing for about a year now, and are spreading.
Yeah, it seems even the Realtors here on city data are starting to change their tone.
Here in California many are starting to lose their homes. I know of a few personally. They drunk their own poison. I don't know...it sorta puts a smile on your face.
Even monetary inflationists like myself realize that assets like real estate WILL lose value in real terms. In nominal terms? Who knows.
Thanks for the info, what market are you located in? I forget. I seem to think you're in the Chicago area but don't remember. And I believe you, for what it's worth. But you're right, this info will be ignored, if not argued, by most on this forum. You're just a real estate agent, speading the "good, hopeful news" you know! But don't worry, some of us know differently! Take care and good luck with your buyers' search!
As it says next to my name I'm in Columbia, SC. Before you throw around accusations on what I post and infer that I am a liar perhaps you should look at my post history.
You are one of the last folks still in the denial stage in the Kubler-Ross model. Even the last of the real estate suckers have moved on to anger or bargaining.
No one really believes most of the anecdotal information offered by those in the real estate industry. That dog just ain't gonna hunt anymore.
Scroll on over to my post history and look up my reply to the market in the professionals forum if you want to find out how I feel (or continue to throw out baseless claims if you like, I care not either way). Oh, btw, my market was named as the 8th most recession proof market and likely one of the fastest to rebound. I don't care if you believe me or not, I've been very busy the last 2 weeks. I never gave an opinion or facts either way other than to say life doesn't revolve around the state of the market. People still buy and sell homes and I don't care if it's a buyers market or a sellers market.
If you want some hard data we as an office turned in 17 contracts last week. We probably turned in 17 all of October.
The real estate cycled is broken and until the first time home buyer is back prices will continue to fall. With the jobless rate and a poor jobs projection it looks like the economy has not bottomed out yet. To make matters worse 20% of all mortgages are now upside down. This country is in free fall and the bottom has yet to be seen.
The real estate cycled is broken and until the first time home buyer is back prices will continue to fall. With the jobless rate and a poor jobs projection it looks like the economy has not bottomed out yet. To make matters worse 20% of all mortgages are now upside down. This country is in free fall and the bottom has yet to be seen.
Two of my buyer clients w/ accepted offers are 1st time homebuyers. There are recession proof occupations and I am still busy w/ teachers, municipal, county, town and state employees not worried about their employment or income. Interest rates are in the mid 5's. Our market is surprisingly active for early winter season. Wait for the bottom and you are likely to miss it. Those who bought at the top thought it would go higher. Sorry, but it sounds like you are in free fall..........
I've been looking at rural homes around Lubbock, Texas now for a couple of years and, although there may have been some slowdown in sales, I have seen no discernible declines in asking prices through any of this. Texas home prices, probably due to the very significant property taxes, have been somewhat stable for several years. New Mexico, at least Albuquerque, has seen a slight decrease in prices in recent months.
I might only add that I am not a realtor, broker, or an investor.
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