analysts are 'predicting' a change in the market for 2005. interests rates are going to rise as of jan 1 and we will begin to see the affects (decrease in prices) in feb/march.
kpny622
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Re: For What it is Worth -> Real Estate
Well even if it's true and home prices decrease so loan amounts decrease...if interest rates are higher than the monthly mortgage payment shouldn't change all that much. Or am I missing something?
skew
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Re: For What it is Worth -> Real Estate
no you are correct. however, interest rates change ALL the time. personally i would rather buy at a lower price w/ a higher interest rate, knowing that when interests rates drop i could at some point re-finance.
am i making sense?
kpny622
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Re: For What it is Worth -> Real Estate
Yes you are right but then again, if interest rates are high, even if the home prices are lower it's all relative - the house you'll be able to afford is still less money than the house you could have afforded if interest rates are low. So that, when interest rates drop again, your house is still one of the more inexpensive ones.
Or maybe I'm trying to justify my frustration since we JUST bought a house and now prices will probably all plummett in the Spring!
skew
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Re: For What it is Worth -> Real Estate
i understand your point. however, for us it works out because if prices drop, we are still going to stay w/in our 'now' range (over-inflated) regardless of interest rates.
not to metion, we plan on well over 20% down which (in the grande scheme of things) may not be all that much now, but will be when prices drop, thus reducing our mortgage significantly.
maybe i am not making sense to anyone but myself.
KarenB
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Re: For What it is Worth -> Real Estate
I don't think the prices are going to drop all that much, as someone who just bought, I hope they level off and then start to increase modestly.
Skew: you do make sense.
skew
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Re: For What it is Worth -> Real Estate
i really don't think the starter price homes (400-500k) will decrease a fair amount, but i do think the higher priced homes 800k, will slowly begin to come down. in fact, i am seeing it already.
KarenB
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Re: For What it is Worth -> Real Estate
That works out great for you. Keep us posted on where the market is.
Good luck.
kpny622
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Re: For What it is Worth -> Real Estate
Posted by skew
i really don't think the starter price homes (400-500k) will decrease a fair amount, but i do think the higher priced homes 800k, will slowly begin to come down. in fact, i am seeing it already.
This statement, as true as it is, makes me so sick! Anyone outside of Long Island who saw 'starter home' and '500K' in the same sentence would faint! They must think everyone who lives here is super rich!
skew
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Re: For What it is Worth -> Real Estate
not to mention many of the starter homes (500k) are dumps. it is beyond sickening.
Sassyz75
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I wouldn't be suprised if the market corrects itself- if not necessarily in LI but other places. We are in an economically pretty crappy situation= the dollar is weak and inflation is going to rise... the fed is going to have to raise interest rather quick to combat this. No offense to you ladies that own, but I'm banking on the market crashing and I'm saving my $$$ to clean up on foreclosures.
skew
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Re: For What it is Worth -> Real Estate
although nothing is for certain, i do think that we will soon see a rise in foreclosures.
KarenB
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Sassyz75, not very nice to look forward to capitalizing on other people's misfortune. JMO
kpny622
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Someone told me that with foreclosures it's different now that it used to be - much harder to snatch them up on the open market. Not sure why, I don't remember how he said it works with banks now. Also with foreclosures, the houses are often in just terrible and run-down shape (since the owners obviously didn't have the money to maintain them).
Even if prices decrease I'm still happy I bought now...I don't want to wait around and see what potentially may or may not happen and then a year from now, possibly find out everyone was wrong and prices are even more astronimical.
Sassyz75
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Re: For What it is Worth -> Real Estate
Whether it is nice or not, the Real Estate market has crashed before.. it isn't a stretch for it to happen again- to think it is an impossibility is naive. Like the stock market, the real estate market flucuates... If it doesn't come down, then we'll have more money saved to put towards the down payment. If it does come down- well... better for us. but I'll be damned if I'm going to be scared into buying a cape for $600k for fear that the market will only go up. That's what people said of the stock bubble in 1999...
skew
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Re: For What it is Worth -> Real Estate
i think Sassyz75's original point was that people are in over their heads right now and will soon have no choice (changing economy, layoffs, loss of income, etc...) but to sell at a lower price or face foreclosure.
Sassyz75
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Re: For What it is Worth -> Real Estate
That's exactly what I mean I have a friend paying $1700 a month on a mortgage for a house that should have been condemned!! On top of it- she's stretched so thin that she has to charge groceries.. but she 'is building equity' so it's OK?? I don't think so. bad financial move and I think she paid way too much money for what she got.. whether the market is dictating it or not.
KarenB
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Re: For What it is Worth -> Real Estate
OK, I see what you are getting at. For those who stretched themselves thin, they may have a problem. Whatever happens there is nothing we can do about it. I am glad we have our home regardless, we will be here a long time. We aren't stretched thin and are in no danger whatsoever.
Best of luck to all of us.
Karen
Junebride
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Re: For What it is Worth -> Real Estate
Just want to throw my opinion in too... We sold a house in 1999 - it was boght in 1996 - made a profit of $50,000 We thought the prices were high then - so we decided to wait it out - move into an apartment and save money... well that was a joke - we bought 2 years later - mean while the prices went up over $100k at that time. When we started looking the houses were around $300K - well when we finally broke down - we paid $420K - well one year later we sold it for in the 5's. The house could now be sold for the 6's - I don't see home prices coming down - yes interest rates are going to rise - but to 6 & 7% which is still low. I would buy now - while they are still in the low 6's. Home prices are going to stay where they are - JMO - I think houses are still going to rise - but at a slow pace. When I bought the house I'm in now - which was last year - I thought we paid so much - that it would take years for it to increase. Well the same exact house as mine just for over $100k more than what I paid 1 - year ago. The demand is still out there - that is going to keep the prices similar to what they are. Hey, again this is just my thoughts and experience. Waiting hurt me - instead of help... I was very upset that I didin't buy back then. I saved like $35,000 - but paid over $100 waiting.
skew
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Re: For What it is Worth -> Real Estate
for us it IS a matter of timing. waiting or that 'perfect' house to come on the market. as long as it falls w/in our 'must have' criteria (which is pretty steep) and our price range, i am not too concerned about the interest rates.
just reporting what i have heard.
ETA: i see that this can be a touchy subject, so i will keep quiet now.
