I look alot at housing on Craigslist. Its a weakness I have. Recently, as in the last few months, I have started to see alot of reductinos in price. However these reductions are mostly still small, 10-20k. Interest rates however have continued rising over the last two years. When you do the math prices seem to still be rising.
I realize that Rich covered this one a while back but thats what is amazing. This phenomenon still seems to be happening. Price reductions are slower than rises in rates.
That is why the MLS inventory keeps growing, because sellers are not discounting significantly. If they were really motivated to sell in this environment, they have to discount way more than 10-20K. It is only a matter of time. I just noticed around PB the last couple weeks a remarkable number of sales and open houses.
Most people do not make the connection. People look at payments and see the payment is more but don’t realize that their house is actually more expensive. There is a disconnect.
I am amazed by how many people gush over how they are getting a small discount on their new house by using the approved lender. What they don’t realize or don’t take the time to figure out is that they could save many multiples by shopping for the best mortgage deal.
My friend just traded in her two year old car for a brand new model. She is thrilled over the extras she “negotiated.” She said to me, “It only added two years to my payments.”
I wanted to ask her if she realized that she just flushed 20k down the toilet but knew it was useless.
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