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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: zonder who wrote (48356)	10/24/2003 10:59:51 AM
From: X Y Zebra	Read Replies (1) \| Respond to of 57110

What do you think will happen when interest rates start moving up? The market will cool off. The key will be the speed at which rates rise and of course how much. Personally I do not see rates zooming back up. I do not know what percentage of the new mortgages is fixed. My estimate is that there are both fixed and adjustable. There may be as much as 50% to 60% that are fixed, but that is a wild guess on my part. The key to avoid a shock to the system is to rise rates gradually... given the general condition of the US and world economies it is my guess that the Fed will do the impossible to keep rates down. After all, countries these days are trying their hardest to have the lowest possible value in their currency so their products are priced lower. I believe this will also help rates down since a competitive pricing in most products will keep inflacion from being a threat. In a way, this is an ideal scenario to own real estate. That is to say, low rates, gradually increasing demand and limited supply of the dirt in an environment where inflation will not be a serious threat (according to government statistics). In addition, as opposed to previous times, not only populations are getting larger all over the world, they are now far more active in terms or participating as consumers and producers; this will give some degree of relief since there are more people to sell stuff to and indeed more real estate that will be "used". I do not foresee a crash in most anything, since as I mentioned earlier governments have a lot more tools & toys to distract the populace and making them believe one way or the other with whatever flavor of the month rubbish they can figure out, in order to keep markets from crashing. Of course that does not mean that there will be cycles and downturns to everything, but not a crash. My estimate is that there will be more of the "soft-landings" here and there (including real estate). As for gold... well, yes I believe that it will continue to appreciate considerably, but once again, real estate will be one of the beneficiaries of the current environment favoring hard assets... I would look at waterfront anywhere; I hear that Thailand is really cheap... [and massages are $6.00/hour by the beach...] <--- that's what I have been told by a friend who has been there several times. Australia's gold coast (NE corner of Queensland) has simply exploded in the last 3 years or so... and guess where tourists are coming from... ---> South East Asia, including Vietnam, Malaysia, Korea, and others... I suspect that the newly acquired wealth from former Chinese less fortunate ones will also contribute to Australia's real estate boom... The only problem is unless you are an Aussie, you can only buy NEW real estate (or build new)... it is some crazy law that I never understood when it was explained to me... I am sure there has to be a way to circumvent that crazy law, like owning an Australian company or something like that. ...besides, they are most definitively NOT making any more real estate... unless of course, California were to become an island or part of Atlándida... -gg In which case Las Vegas would seriously appreciate then.... If you look at values for ANY water front real estate (lake or sea), you will understand what I am saying, the difference between owning water front real estate versus gold is that you can get a lot more enjoyment out of real estate than you can get out of the shinny metal....