cally
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Tue Dec-07-04 03:39 PM
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We hear lot's about the bubble and then we're told to invest in hard assets..real estate. So, let's start a discussion about it.
First, interest rates are historically low. I bought my first house with a 15.3 interest rate. If rates are low, then prices are high.
Second, interest rates will rise. I think dramatically. We have a huge national debt which will get bigger. The more the Fed borroow, the less for all the rest of us. Rates will rise. That will make many homes unaffordable for buyers and housing prices will fall.
I'm at the end of the Baby Boom. I want a smaller house in a few years. I suspect many of us do. I think bigger homes will decrease in value more than others. Most won't be able to afford them and they won't be all that desirable.
Finally, personal experience. I went to graduate school expecting to never own a home. I never predicted the low interest rates and low price of single family homes. The low prices make no sense in terms of societal costs. I bought my first home for $102,000. It went up to $108,000 by the time of closing. We went to lawyers over that one. I sold that for about $160 and bought another for $175. We added improvements and sold for $325. Bought another and lost money. Bought another and 'made' money. Bought another. That's how those of us in areas with absurd housing prices afford these. We've made money off of our housing purchases. I don't think we can sustain those high values. I think we're all going to lose value and money. (BTW...these are not crazy amounts in the SF Bay Area. The average price of a home is about $700,000) Homes bought for $18,000 35 years ago are now worth $700,000.
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Kota
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Tue Dec-07-04 03:51 PM
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1. What concerns me is people have no equity anymore. When rates do go up |
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a whole lot of people in this country will be taking a loss.
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cally
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Tue Dec-07-04 04:06 PM
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I lost 25 percent of the value of my home. I had to write a check to sell it. I think many will have to do that, also.
I don't see how most home values will stay the same. If the economy is strong, home values will recover. I just don't see it when * plans huge deficits.
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Walt Starr
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Tue Dec-07-04 04:08 PM
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4. But Bush's buddies will make out big time |
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when they pick up real estate in forclosure sales.
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GreenPartyVoter
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Tue Dec-07-04 04:08 PM
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3. I will probably never own a home. Just this trailer.. and I am renting |
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the lot. ------------------------------------- Would Jesus love a liberal? You bet! http://timeforachange.bluelemur.com/
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ibegurpard
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Tue Dec-07-04 04:13 PM
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5. I just had a discussion with my brother and he thinks I'm crazy |
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I said there's no way I'm investing in anything right now until I get a sense that there will be some political and economic stability for a long time. I don't see that happening any time soon.
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DU
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Sat Apr 20th 2024, 01:54 AM
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