Rich Toscano wrote:In SD

[phaster]

[quote=Rich Toscano]In SD anyway, I feel like they got back to normal more than 5 years ago:

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What’s normal??

Classical economists (such as John Maynard Keynes) look at the world through a lens of simple equilibrium models

http://www.econmodel.com/classic/

and do not take into account the complex effects of central banks and their ability to create money (in the form of debt) which in turn has an effect on RE prices, etc

http://keenomics.s3.amazonaws.com/debtdeflation_media/papers/Keen1995FinanceEconomicBreakdown_JPKE_OCRed.pdf

One interesting thing I pick up every once in a while is a copy of “Dream Home Magazine”

http://blog.dreamhomesmagazine.com/digitalmag/archive~pub~SD.htm

specifically I look at the section titled “Dream Stats” which has a table of historical 30 year mortgage rates (going back a few decades), the corresponding average Fed funds rate and the delta


year 30 year fed rate delta
1975 9.05% 5.82% 155%
1980 13.74% 13.26% 103%
1985 12.43% 8.10% 153%
1990 10.13% 8.10% 125%
1995 7.93% 5.84% 136%
2000 8.05% 6.24% 129%
2001 6.97% 3.89% 179%
2002 6.54% 1.67% 392%
2003 5.83% 1.13% 530%
2004 5.84% 1.35% 433%
2005 5.87% 3.21% 183%
2006 6.41% 4.96% 129%
2007 6.34% 5.02% 126%
2008 6.03% 1.93% 312%
2009 5.04% 0.16% 3150%
2010 4.69% 0.18% 2606%
2011 4.45% 0.10% 4450%
2012 3.66% 0.14% 2614%
2013 3.98% 0.11% 3618%
2014 4.17% 0.09% 4633%
2015 3.69% 0.11% 3355%


what is also interesting to note in the publication is the Chinese characters (in an english language real estate marketing publication).

As I see things, the reason real estate prices have grown for prime residential real estate (along with rental properties) is because global forces are influencing local real values. In other words local prime real estate is viewed as being inexpensive and just another investment vehicle in a global market…

What is going to be interesting IMHO is what happens when the vast majority of people wake and realize the system as it exists today is corrupt/unsustainable given that central bank of the USA has printed 4+ trillion and the central bank of China has printed 16+ trillion (since 2008 in order to keep the economy going)