US Economic Trend Analysis Message Board

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Strategies & Market Trends : US Economic Trend Analysis

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To: gpowell who wrote (41)	5/7/2007 2:33:02 PM
From: John Vosilla	Read Replies (1) of 97

'..the statement that “house prices track income - interest rates do not matter,” made by a notoriously snarky SI member' Over the very long term and I'm talking 50+ years it won't matter. Over the shorter term cycle lasting perhaps 3-7 years for RE to me it seems interest rates, credit conditions and peoples perceptions of home appreciation potential drive value as much as even the changes in incomes and supply/demand. Take the California speculator expecting annual double digit appreciation the next decade with a 1% pay rate on his overpriced bungalow selling at 35-50 times gross annual rent and cap rate at 1 or 2% for how foolish it all got at the top..

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