Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Spekulatius who wrote (6497)	11/1/2002 10:23:57 PM
From: fatty	Read Replies (1) \| Respond to of 306849

>With respect to RE - one scenario that nobody has taken into account would be that record low interest rates continue to fuel RE even of the economy deteriorates further. If interest rate goes down, the seller will adjust the price up so that you will always pay the same monthly mortgage. But the increased price demands a higher downpayment so it is even more unaffordable. In case of Boston, I think the real estate market is heading toward a crash because next spring comes along, there won't be any buyers as the economy is not projected to show any growth until 2004. I visited a friend last week who lives in a rather upscale townhouse community. Later I found out that 20% of the nearly 100 units are for sale, with average listing time of nearly 2 months.

To: Spekulatius who wrote (6497)	11/2/2002 1:03:06 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

record low interest rates could continue to fuel RE even if the economy deteriorates further One horrible plan I have heard from a number of sources is the Fed buying long-term government bonds, and Fannie Mae obligations with freshly printed money. It's clever in it's own wretched way. Dropping short-term rates further is probably worse than useless. Capital spending by business and home refinancing requires lower long-term rates. This hideous scheme would certainly achieve that. I suppose, if it comes to that point, it's better for our nation to abandon capitalism and free markets than become another Japan writ large. Most Republicans have only wanted more public subsidies of private profit anyway. Free markets and capitalism were just the cover story for the Dick Cheney, Phil Gramm and his wife running the Enron con-job.

To: Spekulatius who wrote (6497)	11/2/2002 2:01:28 AM
From: ild	Read Replies (1) \| Respond to of 306849

Reaper on the CFZ thread has predicted 2%+ interest for the 10 years treasuries. If this happens we could have 3%+ mortgages From Bill Gross: There will never be much less than a 5% 30-year GNMA, Freddie Mac, or FNMA mortgage issued in size no matter what Greenspan does - and that's a forecast you can take to the bank, with a high probability outcome. No investor in their right mind would be on the buy side of a 30-year mortgage with a 4% coupon and a potential extension from a 5-year, to a 12, to an 18-year average life staring them in the face. pimco.com

To: Spekulatius who wrote (6497)	11/2/2002 7:05:00 PM
From: David Jones	Respond to of 306849

...we could have 3%+ mortgages... Ok new rumor. 3% mortgages next summer!

To: Spekulatius who wrote (6497)	11/3/2002 8:13:01 PM
From: reaper	Read Replies (1) \| Respond to of 306849

Spek, if i can defend/clarify my position for a moment here... one, i don't have a 2% prediction for the 10-year; the prediction is a 2-handle, i.e. 2.xxx. with that detail out of the way... IMO the notions of 2.xxx 10-year rates and a continued strong housing market are mutually exclusive. in fact, my rate prediction is premised on a deflationary debt/asset collapse; i.e. it would be the wreck of the housing market that CAUSES the trip for the 10-year to reach a 2-handle. on the other hand, no housing market wreck, then no sustained debt/asset deflation, and if anything rates rise from here. one man's opinion only, of course. Cheers