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

To: MulhollandDrive who wrote (14880)	11/6/2003 12:32:34 PM
From: Tradelite	Read Replies (1) \| Respond to of 306849

<<to your point of demographics driving the RE market, if anything in the longer term, our demographics do not bode well for ever-increasing RE prices. (as RE prices going up and the affordabilty index diverge, despite low interest rates)>> Real estate prices will never go higher than the public can afford or is willing to pay for them. I stated this belief long ago on this thread. Have already lived through a period of rising prices which ended with a resounding buyer revolt. After a frenzied period of rising prices, buyers finally decided they wouldn't and couldn't pay those high prices for homes which didn't even provide them with substantially better benefits than staying put in their present homes and simply adding on or improving if they needed more space and amenities. That was where perceived value collided with seller's asking prices, and it spelled the end of a true speculative real estate bubble in my area during the late 1980s. However, in my opinion, all indicators indicate more people will need homes in the foreseeable future--whether those homes are rented or owned. We've seen the beginnings of this demographic trend over the past couple years. Economic health of the country, and jobs and incomes, will govern the prices people are able to pay, but scarcity of homes in certain areas is a big factor in driving up prices. Scarcity is a problem in some areas of the country. Meanwhile, it will be up to the buyers and sellers to determine how much supply we have and where prices go--not people writing on threads on SI. This is my opinion only. I have to admit I don't much care what happens to real estate in UK or Australia, because real estate is so different in every city in America, how can we possibly worry about what's happening in other countries? But that's just me and my limited vision on the subject. <<GG>>