October 29, 2007
Thought Provoking
I was listening to the Fox Business News channel with Alexis Glick talking about the Real Estate crisis. She brought up some interesting points:
- There are rumors that the interest rates are going to be lowered by ¼ to about 4.5%.
- Homes sales are down but prices are up.
- Are lower mortgages the right thing to do with a weakening US dollar especially when inflation – gas, groceries, etc. are still are the rise?
- Is the Media fanning flames on the housing problems?
- Housing prices have risen at record levels over last 10 years.
- Now that ARM teaser rates are expiring should there be refinancing of these loans or should prices be brought down?
- It is really a buyer’s market, especially with the building of more housing (i.e., proposed housing in Fremont by the new baseball stadium being built)?
- It is tempting to buy up the ‘low’ priced housing with plans to turn it around but that isn’t really as simple as it seems.
Read over her report. I found it very interesting and though-provoking. I’d like to hear some of your opinions on these subjects.
REAL ESTATE TERMINOLOGY:
Concurrent Escrow – A real estate transaction procedure in which the closing of one escrow is dependent upon the closing of another one; also called a double escrow; commonly used in exchanges and in instances where the buyer depends on funds he expects to get from the sale of another property.
smrufett said:
I personally think that part of the reason we have such an overpriced housing market is because of the low interest rate. And the unwillingness by the government to let the market correct itself. If interest rates stay the same, then maybe housing prices will actually decrease enough for average people to afford it.
October 29, 2007 8:19 PM
Red said:
Yes, homes are overpriced because of the low interest rate, plus high rate of price increase and the expectation that the increases would continue. If the assumption goes from “it will be worth 10% more next year” to no appreciation, then suddenly the fact that rents are half the cost of owning matters. That same home goes from a money maker to a big money eater and the home prices spiral down for years.
October 30, 2007 1:28 PM
sue.herz said:
And when you add in the factor of market growth and demand plus dozens of other factors, predictability pretty much flies out the window. Guessing and hoping are pretty much the best we can do and that is a tough premise to ‘take to the bank’.
The problem I have with renting as opposed to owning (after having been a ‘renter’ most of my life and now an ‘owner’) is that a renter has no real say-so regarding the security of their space. That does matter, regardless of the cost.
October 31, 2007 7:28 AM