[quote=deadzone][quote=flu]Sorry to say this, but until we see an implosion in the equity markets, I’d say home prices are going to trickle down ever so slowly for awhile….
Locally, QC, brcm, Intuit are all near 52 weeks high right now…and also with open head count..Heck, even former 6 bucks motorola is at it’s 52 week top end…So I think we’re ways away from any type of “implosion” imho. (Don’t shoot the messenger)[/quote]
FLU, you may be right about equity markets holding up for a while longer, but what does that have to do with real estate prices? You are assuming that most home buyers have large equity positions and I doubt that in general. If anything 401Ks but you cant use that for a downpayment on a house. I don’t see that there is any strong correlation. Furthermore, just because everything is now at 52 week highs (and in many cases fully recovered to 2007 prices) why do you think that means the implosion is far off? If anything, that tells me we are getting closer.[/quote]
I think you’re underestimating folks who’s discretionary spending count significantly on how well (or not well) RSU’s and/or stock options are doing. Mind you that some of these companies never paid top salary dollars. They touted we’ll pay you so-so present day, and through (then worthless) equity at you that vests in 3-4 years.
Typical household with such an arrangement goes like this. proceeds from equity sales goes to discretionary spending items… downpayment for a home, bling, etc…. while as salary goes to paying the bills and 401k toward retirement…Hence, a lot of the discretionary spending (in such households) is completely tied to how the equity markets are doing..Not to mention, that there’s a psychological factor at play here too. If one is see their equity, 401k going up, people “feel” they have more discretionary spending capacity, even if the value of the dollar itself has been cut significantly…
I’d say given the two choices, folks in this category would rather see the equity markets rise 20+% versus wanting interest rates to fall .5%, simply because so much is riding on the equity markets…I wouldn’t be surprised for some of these folks that 80+% of their financial situation depends on the equity markets.
