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EconProf
ParticipantFive weeks ago the exact same thing happened to me. A distressed bank-owned property was listed (in Yuma, AZ) by a local Realtor. I offered full price through my friend, a different agent, and was even required to show proof of funds for an all-cash offer, which I did. Waited a week with no answer. Then suddenly the property was under contract. Could not get my calls returned from the selling broker, and failed to get good follow-up answers from my own agent. I suspect my offer was not even submitted to B of A.
Conclusion: Go directly to the selling agent to give them the full commission. It ain’t right, but it is what it is.ParticipantFive weeks ago the exact same thing happened to me. A distressed bank-owned property was listed (in Yuma, AZ) by a local Realtor. I offered full price through my friend, a different agent, and was even required to show proof of funds for an all-cash offer, which I did. Waited a week with no answer. Then suddenly the property was under contract. Could not get my calls returned from the selling broker, and failed to get good follow-up answers from my own agent. I suspect my offer was not even submitted to B of A.
Conclusion: Go directly to the selling agent to give them the full commission. It ain’t right, but it is what it is.ParticipantFive weeks ago the exact same thing happened to me. A distressed bank-owned property was listed (in Yuma, AZ) by a local Realtor. I offered full price through my friend, a different agent, and was even required to show proof of funds for an all-cash offer, which I did. Waited a week with no answer. Then suddenly the property was under contract. Could not get my calls returned from the selling broker, and failed to get good follow-up answers from my own agent. I suspect my offer was not even submitted to B of A.
Conclusion: Go directly to the selling agent to give them the full commission. It ain’t right, but it is what it is.ParticipantDeadzone, you are reading much more into my post than I actually said, which was limited to the influence of interest rate changes to housing price changes.
As I said, and you echoed, lots of factors other than interest rates also matter. And those factors are always changing–no cycle is exactly like the last. And to explain events, predict the future, make investment decisions, we need those dratted economic theories. We need to test them, invite critics to challenge them, pay attention to the past records of advocates and detractors, etc. And study history to learn its lessons.ParticipantDeadzone, you are reading much more into my post than I actually said, which was limited to the influence of interest rate changes to housing price changes.
As I said, and you echoed, lots of factors other than interest rates also matter. And those factors are always changing–no cycle is exactly like the last. And to explain events, predict the future, make investment decisions, we need those dratted economic theories. We need to test them, invite critics to challenge them, pay attention to the past records of advocates and detractors, etc. And study history to learn its lessons.ParticipantDeadzone, you are reading much more into my post than I actually said, which was limited to the influence of interest rate changes to housing price changes.
As I said, and you echoed, lots of factors other than interest rates also matter. And those factors are always changing–no cycle is exactly like the last. And to explain events, predict the future, make investment decisions, we need those dratted economic theories. We need to test them, invite critics to challenge them, pay attention to the past records of advocates and detractors, etc. And study history to learn its lessons.ParticipantDeadzone, you are reading much more into my post than I actually said, which was limited to the influence of interest rate changes to housing price changes.
As I said, and you echoed, lots of factors other than interest rates also matter. And those factors are always changing–no cycle is exactly like the last. And to explain events, predict the future, make investment decisions, we need those dratted economic theories. We need to test them, invite critics to challenge them, pay attention to the past records of advocates and detractors, etc. And study history to learn its lessons.ParticipantDeadzone, you are reading much more into my post than I actually said, which was limited to the influence of interest rate changes to housing price changes.
As I said, and you echoed, lots of factors other than interest rates also matter. And those factors are always changing–no cycle is exactly like the last. And to explain events, predict the future, make investment decisions, we need those dratted economic theories. We need to test them, invite critics to challenge them, pay attention to the past records of advocates and detractors, etc. And study history to learn its lessons.ParticipantThe question of whether interest rates and housing prices are inversely related is an old one. Common sense and economic theory would suggest the connection is real. But Rich T. has pointed out the empirical evidence supporting that conclusion is weak or nonexistent.
We all know a variety of factors influence housing price trends. I suggest that periods of rapidly rising interest rates are also periods of rising inflationary expectations. So house prices then are both pushed down by rising interest rates and pushed up by buyers hoping to capitalize on rising inflation. The years around 1980, when inflation hit 13.5% and interest rates mid-teens are the best example of this.ParticipantThe question of whether interest rates and housing prices are inversely related is an old one. Common sense and economic theory would suggest the connection is real. But Rich T. has pointed out the empirical evidence supporting that conclusion is weak or nonexistent.
We all know a variety of factors influence housing price trends. I suggest that periods of rapidly rising interest rates are also periods of rising inflationary expectations. So house prices then are both pushed down by rising interest rates and pushed up by buyers hoping to capitalize on rising inflation. The years around 1980, when inflation hit 13.5% and interest rates mid-teens are the best example of this.ParticipantThe question of whether interest rates and housing prices are inversely related is an old one. Common sense and economic theory would suggest the connection is real. But Rich T. has pointed out the empirical evidence supporting that conclusion is weak or nonexistent.
We all know a variety of factors influence housing price trends. I suggest that periods of rapidly rising interest rates are also periods of rising inflationary expectations. So house prices then are both pushed down by rising interest rates and pushed up by buyers hoping to capitalize on rising inflation. The years around 1980, when inflation hit 13.5% and interest rates mid-teens are the best example of this.ParticipantThe question of whether interest rates and housing prices are inversely related is an old one. Common sense and economic theory would suggest the connection is real. But Rich T. has pointed out the empirical evidence supporting that conclusion is weak or nonexistent.
We all know a variety of factors influence housing price trends. I suggest that periods of rapidly rising interest rates are also periods of rising inflationary expectations. So house prices then are both pushed down by rising interest rates and pushed up by buyers hoping to capitalize on rising inflation. The years around 1980, when inflation hit 13.5% and interest rates mid-teens are the best example of this.ParticipantThe question of whether interest rates and housing prices are inversely related is an old one. Common sense and economic theory would suggest the connection is real. But Rich T. has pointed out the empirical evidence supporting that conclusion is weak or nonexistent.
We all know a variety of factors influence housing price trends. I suggest that periods of rapidly rising interest rates are also periods of rising inflationary expectations. So house prices then are both pushed down by rising interest rates and pushed up by buyers hoping to capitalize on rising inflation. The years around 1980, when inflation hit 13.5% and interest rates mid-teens are the best example of this.ParticipantYour basic thesis is that all the money creation and monetary stimulus of QE2 will lead to inflation in most everything, so that by borrowing now at artificially low (temporarily) interest rates you will reap long term profits by paying back with cheaper dollars and have a highly appreciated real estate asset.
I’ve been saying the same thing for years. And I’ve been wrong. But like you, I have hope that some day I’ll be proven right. After all, a broken clock is right twice a day. I also own a lot of real estate assets that would benefit from such a scenario.
Why might you and I be wrong in the future? The inflation we have had in commodities and other assets has not spread to real estate (except Midwest farmland). Past inflationary periods have been fueled by jumps in aggregate demand. The fiscal and monetary stimulus has not fueled a broader economic recovery because the first two components of aggregate demand, consumption and investment (remember GNP = C + I + G) remain weak, and look to continue weak. If 9.6% unemployment is the New Normal, and the housing inventory remains bloated, and housing speculation remains dead, then how will your investment go up in value? In fact the fiscal and monetary stimulus has scared the crap out of consumers and investors, which normally make up about three-fourths of aggregate demand. Both sectors leveraged to the hilt during the bubble, and likely have much more deleveraging to do. A final straw may be rising interest rates that typically accompany rising inflation, thus clobbering real estate demand.
In short, I hope you are right, but selfishly fear you are wrong. -
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