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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Squidman who wrote (949)10/25/2001 2:08:53 PM
From: The Duke of URL©Respond to of 306849
 
Residential (single family dwelling) is much more sensitive to an increase in interest rates, (read price falls) than income residential, read apartments. In addition, as interest rates increase, less people can live in a house and have to move to an apartment.

Simplistically, the "income" of a house is not economic. Whereas the increase in income property causes the cost of good sold to increase for every apartment owner, so all rents go up.

Watch the action on zero coupon bonds during times of changes in interest rates.

Duke



To: Squidman who wrote (949)10/25/2001 2:53:08 PM
From: MoominoidRespond to of 306849
 
I would think that people tend to go out and buy houses when interest rates are low and rent when they are high, Rents don't seem to fluctuate much compared to house prices the adjustment of the housing yield is mainly in the capital value not the income. The cost of buying a house relative to incomes does move together with the economic cycle from what I've seen. But people go out and buy at the top of the market.


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