Patron- What bet does one make if you are targeting a moderately-priced home (250-350k) in a decent growth area?
While I think the housing bubble will get pricked, I think high end (500k plus) gets most effected, and many will see price depreciation of 10-20% over next few years.
Moderately priced homes (I call 250-350?) could take a hit, but likely more in demographic-worse areas? (like NE, Cali perhaps? but not so much in Ariz. or parts of Fla.?)
Do you expect a spike in interest rates at some point (next 2-3 yrs.). I do. Despite worldwide deflationary trend, seems like bond bubble to me, and with the FNM issue etc. with much lower rates, I could see a dollar defense starting next year, and higher rates at some point.
So does one think about buying a moderately priced home here at sub 6 rates (and take a chance with depreciation) vs. waiting a couple years...and taking risk that prices "only" stay flat, but rates are at 8%?
BTW- Just got thru cruising thru some newspapers from last weekend's trip...and although Naples-Ft. Myers may have seen big housing price appreciation, there is a ton of supply in the 125-250k range, some less than $100 per sq.ft., new construction, etc. OK, for many, living in a swamp 5-10 mi from an urban center is not too exciting, but compare this life (sunshine, cheap golf, beach, low taxes) to Calif. or Northeast, and maybe there is an explanation why 1500 people a day move to Lee County?
Point being, there is likely a bubble on beachfront property or nice waterfront, but I don't think so on your "average" house in that corrider.. |
