someone doesnt know what they're talking about, and I dont think its you!!!
We are all entitled to opinons, but to completely ignore a post that calls you on your theory is not very nice.
I don't work in residential real estate, but I do commercial lending and I am in graduate school for finance. In my real estate class, we had a whole class discussion on how prices are going to fall.
Increasing supply, decreasing demand (which comes with higher interest rates!!) will drive prices down. Use common sense!!
and if prices dont decrease, i will buy when I have enough $$ for a DP.
Beth1210
Posted:
Member since
Re: Home Prices Dropping...
Posted by Meaghan729
someone doesnt know what they're talking about, and I dont think its you!!!
We are all entitled to opinons, but to completely ignore a post that calls you on your theory is not very nice.
I don't work in residential real estate, but I do commercial lending and I am in graduate school for finance. In my real estate class, we had a whole class discussion on how prices are going to fall.
Increasing supply, decreasing demand (which comes with higher interest rates!!) will drive prices down. Use common sense!!
and if prices dont decrease, i will buy when I have enough $$ for a DP.
I agree with you 100%- and I got that theory from my hubby
like I said before- if the rates go up and prices go up- our economy will be in big trouble- it' goes against the cycle-
Mrs. dleeny
Posted:
Member since
Re: Home Prices Dropping...
Posted by Meaghan729
Posted by DjPiLL
I wonder what all the 'bubble waiters' are going to do if/when the interest rates do hit 7+ percent... but prices DON'T drop.
why would that happen?? The real estate market has historically been like the bond market. As interest rates rise, prices fall.
Who is going to be able to afford a house is prices continue to rise with interest rates?
Your therorys have lots of holes in them. Look a few posts back, you gave some scenarios with prices decreasing and int. rates increasing and I did the math and proved that you didnt look at the opportunity cost of the lower dp and the interest you'd make on it ifyou invested it.
Agree to disagree!
yes, exactly. if you go by historical facts, interest rates go down, prices go up and vice versa.
you can't have it both ways, not for long anway.
csorisi
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Member since
Re: Home Prices Dropping...
On the topic of buying a home everyone is entitled to their own opinion. Even though people have been saying for a while that house prices are going to decrease & in some areas they have as well as some houses that are just overpriced to begin with (not to say that they all aren't overpriced), I just don't see them ever going back to what they were before we all got married. Some areas though are very desireable and sellers are getting the money they are asking because the inventory in that town is very small. My DH & I just purchased a house and will close next month. We just started looking in sayville & really limited ourselves to that area. In a town that has only about 60 houses total for sale in it, teh inventory is low and there are some homes that have come down in price but those in my opinion were never worth what they were asking in the first place. If a house is priced right it will go & for a good price. We didn't want to wait until the bubble 'supposely' burst because who knows when that will be & with interest rates going up I didn't want to end up giving the bank more money than I have to. Had I bought my house only 4 months ago it would have been a lower interest rate. Also my DH & I didn't want to give our landlord $1400 a month for another year. We have been there for a year & I feel that already we have given them almost 17,000 and have nothing to show for it.
All in all do what is best for you---I don't know if I would wait for a bubble to burst unless I was living in an apartment & only paying $700 a month but that is me & my husband. We never wanted to live in an apartment but having to pay for 50% of the wedding & not being the best savers to begin with gave us no choice.
We shouldn't attack people on here because of what they think---even if you know more than others you can give your opinion & thats that. Here is mine!
DjPiLL
Posted:
Member since
Re: Home Prices Dropping...
Posted by Meaghan729
why would that happen?? The real estate market has historically been like the bond market. As interest rates rise, prices fall.
Who is going to be able to afford a house is prices continue to rise with interest rates?
Your therorys have lots of holes in them. Look a few posts back, you gave some scenarios with prices decreasing and int. rates increasing and I did the math and proved that you didnt look at the opportunity cost of the lower dp and the interest you'd make on it ifyou invested it.
Agree to disagree!
People were saying 'how could we afford these LI home prices' back in 2003. Then they were saying the same thing in 2004. Now 2005 the same thing.
I have a link to a thread in a finance forum that asked readers 'if/when the bubble was going to burst'. This thread started in 2003... and has over 4500 replies! People has been trying to predict this bubble bursting for the last three years to no avail!
People always say 'how can people afford to live here'... but people still manage to continue buying.
As far as opportunity cost goes.... yeah if you put money in a bank you will get interest. But history has shown that real estate appreciates just as much... if not MORE over an extended period of time than a bank account does. The bigger the house you buy now... the more house you have to appreciate.
Like I said... how do you think the rich get richer? Its not from 4% interest bearing CDs.
Mrs. dleeny
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Member since
Re: Home Prices Dropping...
no home owner wants to hear that their house may not be worth as much as it is today, soon.
if the interest rates keep rising (which they will), the market will not be able to sustain those increases and 20-25% housing increases when salaries are not increasing at that rate.
call it a bubble or whatever you want, every article I have read in the past month points to a slowdown of some sort and I have seen it happen.
DjPiLL
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Member since
Re: Home Prices Dropping...
Posted by dleeny
if the interest rates keep rising (which they will)
Honestly... the interest rates going up is something I am not entirely sure about.
I have a feeling we will still see a national average of 6% or less throughout the summer months. (We are at 5.86% right now).
Frankly I don't see interest rates skyrocketing anytime soon. The job market and unemployment would have to seriously improve before we hit 7% and higher.
These continued historically low interest rates will drive the real estate market.
dgtlsunshine
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Member since
Re: Home Prices Dropping...
I agree to disagree.
We need both
we need the buyers that think I need to buy now to buy and we need the folks that think lets wait to buy to pay the rent.
Its a cycle. You loose some you gain some. I know a couple took a 40k loss on their home in the 80s to move to a more desirable school district neighborhood. They made a 500k gain last year when they sold their house. If you can't handle a mere 40k loss etc you really should only buy if you plan to stay in the house forever.
Nothing in life is guaranteed but death.
Meaghan729
Posted:
Member since
Re: Home Prices Dropping...
Posted by dgtlsunshine
I agree to disagree.
We need both
we need the buyers that think I need to buy now to buy and we need the folks that think lets wait to buy to pay the rent.
Its a cycle. You loose some you gain some. I know a couple took a 40k loss on their home in the 80s to move to a more desirable school district neighborhood. They made a 500k gain last year when they sold their house. If you can't handle a mere 40k loss etc you really should only buy if you plan to stay in the house forever.
Nothing in life is guaranteed but death.
and don't forget about taxes! those are guaranteed too!
EJSD2006
Posted:
Member since
Re: Home Prices Dropping...
geez, everyone gets so worked up about houses! please...no puns against realtors, I'm a realtor and a damn good one !
One thing everyone needs to remember is that LI real estate is on a 7 year scale. every 7 years or so, the market dips. but then it goes right back up again! my mentor has been in the business for almost 40 years and has seen 5 of these dips and every single time he makes sure he buys up as much real estate as he can! as i always say 'don't wait to buy real estate...buy real estate and wait!'
