| # | Author | Message |
1
| mrichmondj
Tue 3/28/2006 5:41p | The Fed is still after the inflation boogeyman.
Anyone care to speculate when the tipping point will come that causes the real estate market to crumble? Home inventories have managed to quietly creep up to a 10-year high during the past year of rate hikes. |
2
| Jim in Merced CA
Tue 3/28/2006 6:42p | Well, with Global Warming inevitable, my home will still appreciate -- as ocean front property.
[rim shot -- ba-dum-dum!] |
3
| tiggertoo
Tue 3/28/2006 9:08p | ^^^ In Merced? More like a part of Sacramento Bay.
Of course, my home is a mere 6 ft. above sea level less than a mile from San Francisco Bay. I am currently in the market for large pontoons.
<<Anyone care to speculate when the tipping point will come that causes the real estate market to crumble?>>
It will take a year or so for late payments and foreclosures to show up on the macroeconomic scale. So if the housing market were to crumble, it would happen then.
|
4
| StillThePassHolder
Tue 3/28/2006 9:25p | Regardless of why the rate hikes are happening, if anyone out there is on an interest only loan or a three to five year ARM, refinance NOW. Get yourself a 30 year fixed before it's too late. The piper is going to start calling, soon. |
5
| mrichmondj
Wed 3/29/2006 2:29a | I think it's already too late for most of the interest only folks. |
6
| SuperDry
Wed 3/29/2006 4:52a | I can't *quite* tell what the tone of #1 is. I know that some people are overly focused on the fed's effect on one particular part of the economy that they may be focused on, but their role is much broader than that, as it should be.
If what the fed does ends the unsustainable run-up of real estate that we've seen in certain parts of the country, especially that part of it which is being driven by the insane financing packages that some are using, then so be it. Not that the fed should try to do this on purpose, but if what they are doing for other reasons happens to have that effect, then so be it.
I remember right around 2000 when the tech boom was coming to an end and the dot bomb was getting started, some people were absolutely livid at Alan Greenspan and his policy of continuting to increase interest rates to prevent an overheated economy. Their view seemed to be that the market owed them a 25% annual return, and were angry at anything and anyone that might get in the way. Now that we're in more sober times, I think most people realized that what was happening to the stock market in the late 90's was not sustainable regardless of what the fed did.
Similarly, I remember around 1990 when interest rates and inflaction had gotten under control for a few years, compared to the mid-teens that we had in the early 80's. There were some seniors that were mad at this because they could no longer get a CD at the bank that paid 15%. The notion that the only thing that really matters is how much the going CD rate compares to inflation (and that's not even taking into account income tax). |
7
| Fe Maiden
Wed 3/29/2006 9:40a | ^^^Ah, the real return of a CD. I've spent many a seminar explaining how getting 15% on your CD wasn't that great of a deal. |
8
| hopemax
Wed 3/29/2006 11:55a | My parents are in the process of selling their home in WA. They bought it in 1984, and their interest rate was 17%. They laugh and say, "good times." They are really hoping that they will find a buyer soon, and hold out for the market to drop and buy in Florida. |
9
| mele
Wed 3/29/2006 12:08p | People are still buying houses like crazy here (in WA). Good luck to them! |
10
| TomSawyer
Wed 3/29/2006 12:12p | I wonder how home sales are doing in WA. |
