Heinz Blasnik- Views You Can Use Message Board

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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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To: patron_anejo_por_favor who wrote (2688)	6/25/2003 11:59:56 PM
From: GraceZ	Read Replies (2) of 4905

I bought my present house when interest rates were sitting just below 7%, but back in 1993-94. The first thing people asked me when I told them I bought a house was, "How are you going to sell the other one you own?" It is not simply low interest rates which propels people into buying houses. Rate were low then and everyone was bad mouthing real estate, we couldn't give away our houses in the city. What ensued was five years of people feeling rich from their stock portfolios, that's what got people pushing up house prices. House prices rose while the Fed was raising rates and stocks crashed. People buy houses because they have the expectation that they will go up in price. All I need to do to prove that to you is ask you if you want to buy a house in a great neighborhood at a great price. Then I tell you that the houses there have been getting cheaper every year for years! Do you still want to buy a house there? No, you want to buy a house like everyone else in a place where the houses are getting more expensive.

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