[quote=JohnAlt91941]So who will be buying the homes that aren’t “lesser in size, in a lesser location or in lesser condition or all three”?
I say the same type folks that are buying them now, only the principle (price) will be lower to meet the lower borrowing levels (demand). People aren’t getting more house now due to lower interest rates, only more debt.
The sellers will be the ones sucking it up.[/quote]
No John, when rates revert to the “norm,” there will be a much wider variety of buyers buying them than the ones who are currently buying them (mainly cash investors and FTB’s and STB’s who have little to no downpayment).
Read: “Professionals” shopping in LM, LG, Linda Vista and Golden Hill, for example.
Laugh all you want. But before you lie down and start rolling on the floor, read this recent thread:
Buyers today are getting far more house and better area than they have EVER historically afforded in SD County when mortgage interest rates were in the (normal) 7-10% range.
Are some buyers today incurring too much debt for their families to realistically handle going forward? I would say some are but purely by choice as they DO have other alternatives. I would guess that many (most?) mortgage lenders don’t use MR and HOA monthly expense (BOTH can be exorbitant) when calculating monthly PITI in front end/back end ratios for qualification purposes.
Any mortgage brokers here, please feel free to correct me on this.
