Real estate expert on whether home prices could come down amid Fed rate hikes
https://www.foxbusiness.com/real-estate/real-estate-expert-on-whether-home-prices-could-come-down-amid-fed-rate-hikes
17 replies (most recent on top)
Thank you. I’m an Economist and MBA with 40 years in banking, an expert in collateralized Mortgage Agreements and a veteran of 2 housing crashes, 3 housing bubbles and 5 stock market crashes.
Put all of the increasingly worthless dollars into your mortgages. And when interest rates get really high put a every penny you can scrape together and get it into bond funds.
You’ll thank me.
Absolutely not. In fact we are already more than a year into rotation out of investments into Real Estate.
All this "Technology" and "Efficiency" was supposed to result in a 30 hour work week for everyone.
But what has really happened is more like a 60 hour work week with 50% unemployment.
I'm in an area where avg price per SQ ft is over $1300 and when you are paying over 3MM for homes mortgage rates don't really matter because in most cases they are using other mechanisms. For the rest of the country, as long as demand continues to out pace supply prices won't drop, rates will have to go up quite a bit more to really start having an effect.
@1gmm+1gxE7orY it would if our politicians treated us like fellow human beings and not a commodity.
This guy/gal gets it. Nominal prices may dip slightly at some point in the near term, but with the value of dollars tanking, it's very difficult for home prices to actually go down.
I usually don't like Yahoo news, but the title asks a good question
For first-time homebuyers, are starter homes becoming extinct?
https://www.yahoo.com/finance/news/first-time-homebuyers-starter-homes-090356804.html
Where I live, the question is a resounding YES. In my neighborhood, the prices have gone insanely high. I live in an area that has a very high poverty rate. So many kids in the public schools qualify for free lunch that ALL kids get free lunch. (It wasn't always like that, not when I was a kid.) Few graduate from college that grow up here. Yet we're seeing houses in this neighborhood go for $300k and upwards. Unreal. I'm a college grad & there's no way I can afford a house in the neighborhood I grew up in.
Some of this poverty can be directly tied to offshoring jobs... we used to have a huge plant that employed lots of people... when that closed, things started going down economically. The town hasn't been the same since. Lots of towns in our part of the country have a similar story I'm sure.
@1gmm, it wouldn't matter if foreigners were prevented from buying homes when we import tens of millions. One out of six citizens weren't born in this country and that's not even counting the illegals.
@1gmm+1gxE7orY Won’t happen. The Republicans will never allow it.
Not a chance. With Biden’s inflationary policies current interest rates are a great deal. Boomers dealt with low teens mortgages, Stagflation and the 24% misery index under Carter, Brandon’s spiritual mentor. Anyone with common sense is going to jump on the current rates and pay it back with ever more devalued dollars.
Recently Canada has banned most of the foreigners/immigrants from buying homes for next two years. My guess very soon US congress will also bring similar law for the benefit of US Citizens.
Since so many middle class first time home buyers are losing out to all cash offers, I’m going to say no.
Refinancing will slow down, but prices will continue to climb. The Chinese, Russian, and Saudi Arabians who are buying our country out from under us are not affected by interest rate fluctuations.
That’s for people with credit card debt.
There is a housing shortage. Even rental properties are super high and availability is low for anything affordable. Between investors and corporations buying residential real estate and a low supply of housing, prices are not going down. It's not like 2008, this is a supply demand problem.
Home prices will skyrocket despite the rate hikes. Few will be able to afford a new home so the price of used ones will go up. From the price of 2x6's to the commies forcing us to install heat pumps instead of gas furnaces new homes are EXPENSIVE and fewer are being built. Not to mention the engineering cartel requiring energy audits and air recover systems etc, etc.
Is it oversimplifying calling this a supply and demand relationship?
Have home prices ever gone up while rates were going up??
1000%