I’m sorry, I’m not trying to be negative here or spoil the thought of a significant drop in home prices in the short term future. It might…But it seems at least in the short term, the gov is basically throwing the book at preventing home prices from sharply falling (whether it will be effective or not is tbd)…But I see two scenarios
1)Government is successful. Financially irresponsible people are rewarded and folks like you folks and me get screwed.
2)Government isn’t successful. Then entire deck of cards falls, in which case everyone is screwed…including folks like you and me.
It’s your favorite game show… “You can’t win, You’re screwed”….
-(. It’s hurts from laughing at this absurdity…..
Just wait till we have runaway inflation. At that point “saving” will be moot.
My excuse, i keep telling myself, is that i didn’t vote for this administration…. 🙂 So I’m just burying my head in the sand , hoping the next congressional election will balance things again….
Government is probably going to try to string out the decline. Basically, for now, bail out some homeowners..Overtime, they’ll be in the same mess.
Also, let’s not underestimate the effects of conforming loan limits going up to $697k in the near future…We see inventory moving in the $700k below range. If we move the conforming limit to $697k, that just might bring out some sideline buyers who otherwise would have been priced out.
I think this newer limit would allow someone to purchase $850k (give or take) with 20% down…And if that’s at a 4.25-4.5% 30 year loan, I have a hunch we got game. (million dollar homes are still screwed me thinks…at least until the fed raises conforming rates to 800k+ in SD….Heh, laugh now at this absurd suggestion…But if there’s anything consistent about this administration, it’s that they are consistent in doing some of the unthinkable). The next thought will be “who has 150k-200k sitting on the side” who can afford this…. but you know there are.
The last thing is “who would be crazy enough to buy in this market when home prices are going to continue to fall”. Well, simple. Some people don’t purchase primary homes with economic rationalization….motivations might be symbolic, stability, symbolic or just plain making sure you can get laid at night..sorry to be crude)..
All i can say, is it will definitely get interesting to see how things pan out.
