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

To: neolib who wrote (241713)	3/22/2010 11:31:54 AM
From: Jim McMannis	Read Replies (1) \| Respond to of 306849

Most people only look at thier monthly payments. When rates go down monthly payments go down. People buy bigger plus the buying pressure drives up prices. Inversely. Lower rates higher prices. Greenspan, Bernanke and the FED should take a lot of the blame for the housing bubble. As should lending practices. Fanny Freddie, Clinton, Bush, Congress, lobby money etc... Not to mention plain ole' personal greed. But without riduculous low rates a lot of the fuel would have been off the fire.

To: neolib who wrote (241713)	3/22/2010 6:12:46 PM
From: Jim McMannis	Respond to of 306849

I'd say it was a perfect storm. A bunch of factors all lending themselves to driving prices higher. Creating the of demand behavior/ greed easy money. Those who point to only one cause are incorrect. OTOH...if just one of the limiting factors had remained constant it would have curtailed it. I'd say if rates had remained higher the bubble may never have occured or would have been curtailed.

To: neolib who wrote (241713)	3/22/2010 6:39:35 PM
From: Skeeter Bug	Respond to of 306849

>>Low rates did affect behavior, but it is still behavior which is the root cause, because we now have even lower FED rates but no bubble. In fact, as JV points out, in Florida you can buy lots of properties at below replacement costs. Yet FED rates are lower now than when those properties sold for 5x or more as much. Whats different?<< people are saturated with debt. we hit the debt ceiling. that's what is different. those people who didn't lever up (very few - bubbles require almost everyone that could get involved be involved), the prices are dropping - and nobody wants to lose money. this was primarily caused by the fed, their easy money policy, their lies and the massive and pernicious fraud of the banksters that run the fed and the parasites that fed off their system of fraud. btw, homes in many parts of the country are still very pricey. my home is still worth 40% above my inflation adjusted purchase price in 1998 - and i thought it was a fair value in 1998. 1998 was a much, much better time that 2010. wages were higher, unemployment was lower, the bubble was ahead of us... interest rates were higher, but that will change one day - probably sooner rather than later, too.