Hi Tradelite, RE: "If you are willing to pay a higher interest rate, don't you think all the other buyers will be willing to do the same thing? (Of course they will....."
Based upon the debt levels of young Americans, I doubt it. JP doesn't sound like the statistical average American - he sounds more like a low-debt kind of person.
RE: "I never saw anyone decide not to buy a home they wanted just because of interest rates"
More likely than not, they probably just say, "we can't afford it", without understanding the underlying cause.
I bet housing will stay flat for ten years. Imagine if the stock market doubled after ten years while housing didn't, ouch. If that happened, that would be a subtle/gentle (and not so obvious) haircut by a half (in comparison) for the real estate buyer. Consider this:
Housing stayed flat for 40 years after the boom of the twenties:
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In 1922, a new house cost $7k, but then (reportedly) it took 40 years before housing doubled in price. (Don't remember what the report said about housing between 1962-1972)
Fast forward to 1972, where it (reportedly) took only 5 years for housing to double in price. And then (reportedly) it took only 10 years for another double (1977 to 1987). You know the rest of the story.
In 1997, there was a house in Silicon Valley worth $750k, back before million dollar homes became the norm. The house next door to this one, is a bit smaller in both lot size & house size, but recently this neighbor house sold for $3M. Remember when Hollywood homes were essentially the only homes selling for $3M?
There is absolutely no real estate bubble according to the Iraqi Information Minister.
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Message 19056254
Regards,
Amy J |
