[quote=anxvariety]House prices will not reach their bottom until interest rates rise.
General statement, interested in different perspectives.[/quote]
The major complaint from buyers is lack of inventory. How much either low inventory or low interest rates are responsible for the current lift in home prices is anyone’s guess, but that they have is pretty much a given. So if either change I think it’s conceivable appreciation could at least halt in its tracks. I don’t think the recovery is robust enough to build the momentum needed to be without props, and I guess we’ll see what the long term effects of low rate dependency will be.
What’s more important in this current market is whether you are unhappy with the lack of choice …and possibly also whether you personally feel home prices should have corrected more than they did? That is a major psychological barrier to entry for some of us, and is the reason I left CA. Home prices still seemed unrealistically high to me in many places, and I would certainly resist being goaded into acting now if you have any reservations. Sometimes instincts are a better guide than a calculator.
An interesting aside, I read in the WSJ at the weekend the Spanish government demanded that lenders release foreclosures onto the market to allow a correction in prices. I can’t see that happening in the US 🙂
