High Interest rates replace high prices?

[patientlywaiting]

NeetaT, I completely share your view.
The services were getting are certainly not proportional to the increase in property taxes we are paying.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

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