Considering pulling the trigger

[bob2007]

socratt,

Dude, it IS speculation. I don’t think there is any prediction here that is not, regardless of how many bankers you have meet with. All anyone can do is guess, since market conditions are not the only force here. The guess/speculation of 10% is just that. The important point was that my guess (yes, my guess), based on the original poster’s 5% or 10% question. Are you saying that your counter point of “more than 10%” is not speculation?

“Bob, this is speculation at its best. Do yourself a favor and try not to throw numbers out. A higher than 10% decline is much more likely and the chances are if the banks were forced to release inventory there would be a much greater decline in many areas.”

[mercedes7]

Thanks Socrattt. That is what I needed to hear. Guess I will wait it out for another year or two.

[mercedes7]

Thanks Socrattt. That is what I needed to hear. Guess I will wait it out for another year or two.

[mercedes7]

Thanks Socrattt. That is what I needed to hear. Guess I will wait it out for another year or two.

[mercedes7]

Thanks Socrattt. That is what I needed to hear. Guess I will wait it out for another year or two.

[mercedes7]

Thanks Socrattt. That is what I needed to hear. Guess I will wait it out for another year or two.

[mercedes7]

[quote=bob2007]socratt,

Dude, it IS speculation. I don’t think there is any prediction here that is not, regardless of how many bankers you have meet with. All anyone can do is guess, since market conditions are not the only force here. The guess/speculation of 10% is just that. The important point was that my guess (yes, my guess), based on the original poster’s 5% or 10% question. Are you saying that your counter point of “more than 10%” is not speculation?

“Bob, this is speculation at its best. Do yourself a favor and try not to throw numbers out. A higher than 10% decline is much more likely and the chances are if the banks were forced to release inventory there would be a much greater decline in many areas.”[/quote]

Bob you are right, it is all speculation, and I appreciate your best guess. Nobody knows for sure since there are way too many unnatural forces at play here. I think deep down, I still feel as though it is too early and that prices will correct further. Problem is I am bombarded by counter data and the koolaide drinking general public who thinks that housing is on its way back up. To a certain extent, if most people believe this, it can become a self fufilling prophecy. I appreciated Socrattt’s comment about the “shadow inventory” as this has been one of the reasons I have waited. It is and probably will be an interesting 2 years to come.

[mercedes7]

[quote=bob2007]socratt,

Dude, it IS speculation. I don’t think there is any prediction here that is not, regardless of how many bankers you have meet with. All anyone can do is guess, since market conditions are not the only force here. The guess/speculation of 10% is just that. The important point was that my guess (yes, my guess), based on the original poster’s 5% or 10% question. Are you saying that your counter point of “more than 10%” is not speculation?

“Bob, this is speculation at its best. Do yourself a favor and try not to throw numbers out. A higher than 10% decline is much more likely and the chances are if the banks were forced to release inventory there would be a much greater decline in many areas.”[/quote]

Bob you are right, it is all speculation, and I appreciate your best guess. Nobody knows for sure since there are way too many unnatural forces at play here. I think deep down, I still feel as though it is too early and that prices will correct further. Problem is I am bombarded by counter data and the koolaide drinking general public who thinks that housing is on its way back up. To a certain extent, if most people believe this, it can become a self fufilling prophecy. I appreciated Socrattt’s comment about the “shadow inventory” as this has been one of the reasons I have waited. It is and probably will be an interesting 2 years to come.

[mercedes7]

[quote=bob2007]socratt,

Dude, it IS speculation. I don’t think there is any prediction here that is not, regardless of how many bankers you have meet with. All anyone can do is guess, since market conditions are not the only force here. The guess/speculation of 10% is just that. The important point was that my guess (yes, my guess), based on the original poster’s 5% or 10% question. Are you saying that your counter point of “more than 10%” is not speculation?

“Bob, this is speculation at its best. Do yourself a favor and try not to throw numbers out. A higher than 10% decline is much more likely and the chances are if the banks were forced to release inventory there would be a much greater decline in many areas.”[/quote]

Bob you are right, it is all speculation, and I appreciate your best guess. Nobody knows for sure since there are way too many unnatural forces at play here. I think deep down, I still feel as though it is too early and that prices will correct further. Problem is I am bombarded by counter data and the koolaide drinking general public who thinks that housing is on its way back up. To a certain extent, if most people believe this, it can become a self fufilling prophecy. I appreciated Socrattt’s comment about the “shadow inventory” as this has been one of the reasons I have waited. It is and probably will be an interesting 2 years to come.

[mercedes7]

[quote=bob2007]socratt,

Dude, it IS speculation. I don’t think there is any prediction here that is not, regardless of how many bankers you have meet with. All anyone can do is guess, since market conditions are not the only force here. The guess/speculation of 10% is just that. The important point was that my guess (yes, my guess), based on the original poster’s 5% or 10% question. Are you saying that your counter point of “more than 10%” is not speculation?

“Bob, this is speculation at its best. Do yourself a favor and try not to throw numbers out. A higher than 10% decline is much more likely and the chances are if the banks were forced to release inventory there would be a much greater decline in many areas.”[/quote]

Bob you are right, it is all speculation, and I appreciate your best guess. Nobody knows for sure since there are way too many unnatural forces at play here. I think deep down, I still feel as though it is too early and that prices will correct further. Problem is I am bombarded by counter data and the koolaide drinking general public who thinks that housing is on its way back up. To a certain extent, if most people believe this, it can become a self fufilling prophecy. I appreciated Socrattt’s comment about the “shadow inventory” as this has been one of the reasons I have waited. It is and probably will be an interesting 2 years to come.

[mercedes7]

[quote=bob2007]socratt,

Dude, it IS speculation. I don’t think there is any prediction here that is not, regardless of how many bankers you have meet with. All anyone can do is guess, since market conditions are not the only force here. The guess/speculation of 10% is just that. The important point was that my guess (yes, my guess), based on the original poster’s 5% or 10% question. Are you saying that your counter point of “more than 10%” is not speculation?

“Bob, this is speculation at its best. Do yourself a favor and try not to throw numbers out. A higher than 10% decline is much more likely and the chances are if the banks were forced to release inventory there would be a much greater decline in many areas.”[/quote]

Bob you are right, it is all speculation, and I appreciate your best guess. Nobody knows for sure since there are way too many unnatural forces at play here. I think deep down, I still feel as though it is too early and that prices will correct further. Problem is I am bombarded by counter data and the koolaide drinking general public who thinks that housing is on its way back up. To a certain extent, if most people believe this, it can become a self fufilling prophecy. I appreciated Socrattt’s comment about the “shadow inventory” as this has been one of the reasons I have waited. It is and probably will be an interesting 2 years to come.

[CA renter]

[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]

Absolutely right, IMHO.

The paltry returns on cash over the past decade (and especially over the past couple of years) is pushing highly liquid entities into buying anything that gives a better return than 0-2%. At this point, almost anything is better than cash, and this is precisely what the Fed/govt/PTB want. They are trying to squeeze people out of their cash positions and into other asset classes, no question about it.

Low interest rates affect demand in two ways. It makes a mortgaged purchase more affordable at a higher price, AND it forces cash into the housing market because investors (especially fixed-income investors who like “safer” investments) can get a better return on an all-cash purchase (then renting it out or flipping it) than in any kind of liquid savings/investment **at this point in time.**

Like SDR said, it’s all about the interest rates/bond market. Everyone is speculating now.

[CA renter]

[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]

Absolutely right, IMHO.

The paltry returns on cash over the past decade (and especially over the past couple of years) is pushing highly liquid entities into buying anything that gives a better return than 0-2%. At this point, almost anything is better than cash, and this is precisely what the Fed/govt/PTB want. They are trying to squeeze people out of their cash positions and into other asset classes, no question about it.

Low interest rates affect demand in two ways. It makes a mortgaged purchase more affordable at a higher price, AND it forces cash into the housing market because investors (especially fixed-income investors who like “safer” investments) can get a better return on an all-cash purchase (then renting it out or flipping it) than in any kind of liquid savings/investment **at this point in time.**

Like SDR said, it’s all about the interest rates/bond market. Everyone is speculating now.

[CA renter]

[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]

Absolutely right, IMHO.

The paltry returns on cash over the past decade (and especially over the past couple of years) is pushing highly liquid entities into buying anything that gives a better return than 0-2%. At this point, almost anything is better than cash, and this is precisely what the Fed/govt/PTB want. They are trying to squeeze people out of their cash positions and into other asset classes, no question about it.

Low interest rates affect demand in two ways. It makes a mortgaged purchase more affordable at a higher price, AND it forces cash into the housing market because investors (especially fixed-income investors who like “safer” investments) can get a better return on an all-cash purchase (then renting it out or flipping it) than in any kind of liquid savings/investment **at this point in time.**

Like SDR said, it’s all about the interest rates/bond market. Everyone is speculating now.

[CA renter]

[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]

Absolutely right, IMHO.

The paltry returns on cash over the past decade (and especially over the past couple of years) is pushing highly liquid entities into buying anything that gives a better return than 0-2%. At this point, almost anything is better than cash, and this is precisely what the Fed/govt/PTB want. They are trying to squeeze people out of their cash positions and into other asset classes, no question about it.

Low interest rates affect demand in two ways. It makes a mortgaged purchase more affordable at a higher price, AND it forces cash into the housing market because investors (especially fixed-income investors who like “safer” investments) can get a better return on an all-cash purchase (then renting it out or flipping it) than in any kind of liquid savings/investment **at this point in time.**

Like SDR said, it’s all about the interest rates/bond market. Everyone is speculating now.

[Author]

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