Thinking about jumping in….

[NotCranky]

“Just thought I’d post to see if there was someone out there willing to knock some sense in to me.”

I think the extremely strong reactions against buying are mostly a thing of the past. For much of the housing market, potential losses are seriously diminished.The next 30% on lower priced houses won’t wipe out quite so much a the first!This is partially a joke not a prediction.

The warnings are still there, but the energy isn’t. Most concern is for higher priced houses. People who can afford higher priced houses may or may not need to have some sense knocked into them but it is isn’t custom to give the big dogs any guff. Remember raptorduck?

I tend to think some 300k- 600k areas still have a lot of losses to come, but apparently worry over that has diminished too …at least in pigg land. It wouldn’t be polite to go on about it when so many in the group are buying.

In my opinion some of the more bearish people here are starting to sound like broken records in the background,instead of a full chorus … right or wrong.

[davelj]

[quote=pemeliza]

I think the one thing we can count on during this debacle is low interest rates.

Also keep in mind that 7% rates would destroy this low-end market recovery we have seen which would send prices even lower IMHO.

[/quote]

The question is whether the Fed can continue to keep (re: manipulate) rates low if and when inflation picks back up. That may not be for a few years down the road, but when inflation picks up again and rates head upward (which the Fed won’t have much control over initially, as it’ll be a surprise, by definition) that will influence housing prices (re: lower due to higher financing costs, all else being equal) negatively, just as lower rates were one of the sparks that ignited the boom. My guess is that higher interest rates, resulting from higher inflation, a few years down the road is why residential real estate won’t head up for a while after hitting bottom (whenever that happens).

[davelj]

[quote=pemeliza]

I think the one thing we can count on during this debacle is low interest rates.

Also keep in mind that 7% rates would destroy this low-end market recovery we have seen which would send prices even lower IMHO.

[/quote]

The question is whether the Fed can continue to keep (re: manipulate) rates low if and when inflation picks back up. That may not be for a few years down the road, but when inflation picks up again and rates head upward (which the Fed won’t have much control over initially, as it’ll be a surprise, by definition) that will influence housing prices (re: lower due to higher financing costs, all else being equal) negatively, just as lower rates were one of the sparks that ignited the boom. My guess is that higher interest rates, resulting from higher inflation, a few years down the road is why residential real estate won’t head up for a while after hitting bottom (whenever that happens).

[davelj]

[quote=pemeliza]

I think the one thing we can count on during this debacle is low interest rates.

Also keep in mind that 7% rates would destroy this low-end market recovery we have seen which would send prices even lower IMHO.

[/quote]

The question is whether the Fed can continue to keep (re: manipulate) rates low if and when inflation picks back up. That may not be for a few years down the road, but when inflation picks up again and rates head upward (which the Fed won’t have much control over initially, as it’ll be a surprise, by definition) that will influence housing prices (re: lower due to higher financing costs, all else being equal) negatively, just as lower rates were one of the sparks that ignited the boom. My guess is that higher interest rates, resulting from higher inflation, a few years down the road is why residential real estate won’t head up for a while after hitting bottom (whenever that happens).

[davelj]

[quote=pemeliza]

I think the one thing we can count on during this debacle is low interest rates.

Also keep in mind that 7% rates would destroy this low-end market recovery we have seen which would send prices even lower IMHO.

[/quote]

The question is whether the Fed can continue to keep (re: manipulate) rates low if and when inflation picks back up. That may not be for a few years down the road, but when inflation picks up again and rates head upward (which the Fed won’t have much control over initially, as it’ll be a surprise, by definition) that will influence housing prices (re: lower due to higher financing costs, all else being equal) negatively, just as lower rates were one of the sparks that ignited the boom. My guess is that higher interest rates, resulting from higher inflation, a few years down the road is why residential real estate won’t head up for a while after hitting bottom (whenever that happens).

[davelj]

[quote=pemeliza]

I think the one thing we can count on during this debacle is low interest rates.

Also keep in mind that 7% rates would destroy this low-end market recovery we have seen which would send prices even lower IMHO.

[/quote]

The question is whether the Fed can continue to keep (re: manipulate) rates low if and when inflation picks back up. That may not be for a few years down the road, but when inflation picks up again and rates head upward (which the Fed won’t have much control over initially, as it’ll be a surprise, by definition) that will influence housing prices (re: lower due to higher financing costs, all else being equal) negatively, just as lower rates were one of the sparks that ignited the boom. My guess is that higher interest rates, resulting from higher inflation, a few years down the road is why residential real estate won’t head up for a while after hitting bottom (whenever that happens).

[jpinpb]

I just can’t see the government raising rates any time soon. What would be the logic? Is our economy so much better that raising the rates would help it?

Our economy is not the best and I don’t see a dramatic improvement any time soon, regardless of how many bailouts they attempt. I really believe the core problem is good paying jobs.

That has been the problem for a while. People made money out of thin air during the dot-com era. That got diverted into the real estate game. Now that the house ATM machine is run dry, we are still back to the same problem. Making money.

If there are no plentiful good paying jobs out there, the government will have to come up w/another get-rich scheme. Or maybe they have. It’s the bailout scheme. Get in line. See if there’s a way to get some bailout money.

Sooner or later, the rooster is coming home.

As far as buying, if it makes sense to you, then go for it. I’m not familiar w/SEH, but if pricing is close to the 2000-2001 levels and/or your rent is close to what your mortgage would be, then take the leap.

Even if there is still further depreciation in a year, factor in what it would cost to rent for a year. You can probably do that math and see if it makes sense.

We are not at bottom yet, but there are deals out there. Be ready, have some down, minimize debt and have good credit. That will make you a strong buyer.

Oh – important. As much as you can, make sure your job is secure and you have some savings.

[jpinpb]

I just can’t see the government raising rates any time soon. What would be the logic? Is our economy so much better that raising the rates would help it?

Our economy is not the best and I don’t see a dramatic improvement any time soon, regardless of how many bailouts they attempt. I really believe the core problem is good paying jobs.

That has been the problem for a while. People made money out of thin air during the dot-com era. That got diverted into the real estate game. Now that the house ATM machine is run dry, we are still back to the same problem. Making money.

If there are no plentiful good paying jobs out there, the government will have to come up w/another get-rich scheme. Or maybe they have. It’s the bailout scheme. Get in line. See if there’s a way to get some bailout money.

Sooner or later, the rooster is coming home.

As far as buying, if it makes sense to you, then go for it. I’m not familiar w/SEH, but if pricing is close to the 2000-2001 levels and/or your rent is close to what your mortgage would be, then take the leap.

Even if there is still further depreciation in a year, factor in what it would cost to rent for a year. You can probably do that math and see if it makes sense.

We are not at bottom yet, but there are deals out there. Be ready, have some down, minimize debt and have good credit. That will make you a strong buyer.

Oh – important. As much as you can, make sure your job is secure and you have some savings.

[jpinpb]

I just can’t see the government raising rates any time soon. What would be the logic? Is our economy so much better that raising the rates would help it?

Our economy is not the best and I don’t see a dramatic improvement any time soon, regardless of how many bailouts they attempt. I really believe the core problem is good paying jobs.

That has been the problem for a while. People made money out of thin air during the dot-com era. That got diverted into the real estate game. Now that the house ATM machine is run dry, we are still back to the same problem. Making money.

If there are no plentiful good paying jobs out there, the government will have to come up w/another get-rich scheme. Or maybe they have. It’s the bailout scheme. Get in line. See if there’s a way to get some bailout money.

Sooner or later, the rooster is coming home.

As far as buying, if it makes sense to you, then go for it. I’m not familiar w/SEH, but if pricing is close to the 2000-2001 levels and/or your rent is close to what your mortgage would be, then take the leap.

Even if there is still further depreciation in a year, factor in what it would cost to rent for a year. You can probably do that math and see if it makes sense.

We are not at bottom yet, but there are deals out there. Be ready, have some down, minimize debt and have good credit. That will make you a strong buyer.

Oh – important. As much as you can, make sure your job is secure and you have some savings.

[jpinpb]

I just can’t see the government raising rates any time soon. What would be the logic? Is our economy so much better that raising the rates would help it?

Our economy is not the best and I don’t see a dramatic improvement any time soon, regardless of how many bailouts they attempt. I really believe the core problem is good paying jobs.

That has been the problem for a while. People made money out of thin air during the dot-com era. That got diverted into the real estate game. Now that the house ATM machine is run dry, we are still back to the same problem. Making money.

If there are no plentiful good paying jobs out there, the government will have to come up w/another get-rich scheme. Or maybe they have. It’s the bailout scheme. Get in line. See if there’s a way to get some bailout money.

Sooner or later, the rooster is coming home.

As far as buying, if it makes sense to you, then go for it. I’m not familiar w/SEH, but if pricing is close to the 2000-2001 levels and/or your rent is close to what your mortgage would be, then take the leap.

Even if there is still further depreciation in a year, factor in what it would cost to rent for a year. You can probably do that math and see if it makes sense.

We are not at bottom yet, but there are deals out there. Be ready, have some down, minimize debt and have good credit. That will make you a strong buyer.

Oh – important. As much as you can, make sure your job is secure and you have some savings.

[jpinpb]

I just can’t see the government raising rates any time soon. What would be the logic? Is our economy so much better that raising the rates would help it?

Our economy is not the best and I don’t see a dramatic improvement any time soon, regardless of how many bailouts they attempt. I really believe the core problem is good paying jobs.

That has been the problem for a while. People made money out of thin air during the dot-com era. That got diverted into the real estate game. Now that the house ATM machine is run dry, we are still back to the same problem. Making money.

If there are no plentiful good paying jobs out there, the government will have to come up w/another get-rich scheme. Or maybe they have. It’s the bailout scheme. Get in line. See if there’s a way to get some bailout money.

Sooner or later, the rooster is coming home.

As far as buying, if it makes sense to you, then go for it. I’m not familiar w/SEH, but if pricing is close to the 2000-2001 levels and/or your rent is close to what your mortgage would be, then take the leap.

Even if there is still further depreciation in a year, factor in what it would cost to rent for a year. You can probably do that math and see if it makes sense.

We are not at bottom yet, but there are deals out there. Be ready, have some down, minimize debt and have good credit. That will make you a strong buyer.

Oh – important. As much as you can, make sure your job is secure and you have some savings.

[moneymaker]

Yes agreed, just learned today that HELOC’s are considered revolving charge accounts by FICO. So even if one is on the ball, has a good job, may still not be able to refi as FICO may be lowered without one being aware of it because of debt-to-income ratio. Many negative reinforcing cycles such as these, may create a reinforcing down cycle. How will the government collect more tax money with fewer people working?

[moneymaker]

Yes agreed, just learned today that HELOC’s are considered revolving charge accounts by FICO. So even if one is on the ball, has a good job, may still not be able to refi as FICO may be lowered without one being aware of it because of debt-to-income ratio. Many negative reinforcing cycles such as these, may create a reinforcing down cycle. How will the government collect more tax money with fewer people working?

[moneymaker]

Yes agreed, just learned today that HELOC’s are considered revolving charge accounts by FICO. So even if one is on the ball, has a good job, may still not be able to refi as FICO may be lowered without one being aware of it because of debt-to-income ratio. Many negative reinforcing cycles such as these, may create a reinforcing down cycle. How will the government collect more tax money with fewer people working?

[moneymaker]

Yes agreed, just learned today that HELOC’s are considered revolving charge accounts by FICO. So even if one is on the ball, has a good job, may still not be able to refi as FICO may be lowered without one being aware of it because of debt-to-income ratio. Many negative reinforcing cycles such as these, may create a reinforcing down cycle. How will the government collect more tax money with fewer people working?

[Author]

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