But at a bit of a discount to today’s prices, it would be less life-altering. And SoCal isn’t a raging, humid, hot rathole like humidlanta. There’s a REASON why prices are higher in CA than in JawhJah.
If one blows their downpayment on a house in ATL that then loses value when rates go up(*), they’ll be stuck there until they can save another downpayment.
Skells will have to sell when they smell rates goin’ up, best to keep some powder dry so to speak.
(*) – to be clear:
1. The R.E. markets ARE slowing since last year. Fed is tapering anyway. This worked out so well (no sarcasm intended, from my perspective) in 2009 and 2011-12.
2. Rates ARE going up. A +0.25% reaction to tapering that should already have been priced in is significant. Remember that we spiked over 5% after QE1 and QE2 were euthanized, even under ZIRP.
3. Tapering is a done deal. Short of an October cataclysm or nuclear war, there won’t be enough data in the next 1.5 months, before the October 29 meeting, that can’t be passed off as “temporary.”
4. Qualified Mortgage isn’t going anywhere, fast. We shouldn’t count on a new wave of loser-loans to bailing out markets any time fast.
