OH, THE HUMANITY!
Posted on 07/28/2005 8:46:28 AM PDT by CAWats
Despite fears that the housing market is ready to collapse, demand for homes remain hot. The supply of new homes at the current sales pace narrowed to 4.0 months, the lowest since October.
(Excerpt) Read more at investors.com ...
And yet the MSM is filled with stories about the tentitiveness or shakiness of the economy!
BUSH'S FAULT!.......
The "Worst economy since Herbert Hoover" continues to smash the Gloomers and Doomers.
What does Herr Krugman have to say about this?
Notice how the drugged mediots of the MSM have forgotten the "Worse Economy sinc Herbert Hoover" and are now trying to electronically lynch Rove and GW.
Oh, wait. Never mind.
The WORST ECONOMY IN 50 YEARS!.....uh.........SINCE HOOVER!!..........uhh........this isn't working..........TALK THE ECONOMY DOWN!.............
Over on the CAFTA thread we're becoming a socialist nation of homeless people, according to some FReepers. I guess someone should tell that to these home buyers?
OH, THE HUMANITY!
THE SKY IS FALLING!
Could someone explain this to me... Interest rates are low, so therefore, more people are able to buy/build homes if they lock in on fixed rates. When the market is hot, home costs soar though, but appearantly people can afford the rising costs because of the low interest rates. When the market slows down, home costs go down but interest rates seem to go up.
Why then, does it not just even out in the long run? It seems like a trade-off to me.
Don't property taxes have to figure into this? Property taxes on a new home where I am from averages from $3-7,000/yr, which in turn will raise a house payment significantly.
I ask because my husband and I would like to build a home in the next couple years on land we have, but we are concerned that if the market stays this hot, we may not be able to afford it with property taxes, etc. and will have to wait. We DO NOT want to over-extend and bite off more than we can chew.
Any advice and help would be appreciated.
Completely off-topic, I have been reading so many of your posts over the past months I've been here. Your intelligence and dedication to country are very much appreciated. Good luck with the new house!
All together now... That's the way... Uh huh, uh huh... The way I likes it... Un huh, uh huh...
well thanks for the kind words and the wish of luck. I don't know how intelligent I am sometimes, but I DEFINITELY won't dispute it!! :)
Thank the Good Lord for my wife. I would have been completely lost without her in this house.
The GM/Ford fire sale tactics have an impact on this figure.
It may be that future car sales will fall sharply when/if the prices go back up, or even if they don't, since many people have already purchased a new car "ahead of schedule"
And Willie Green tells us a new factory is closing every day (he doesn't mention that five are opening).
I'm in the Washington DC area, one of the markets identified as having a housing bubble. In recent years, local housing prices have gone up as much as 32% annually. But we're beginning to see a bit of flattening in the market. Houses are staying on the market for awhile, some home prices are being reduced, and a real estate agent I've been talking to about selling my house--one of the most successful in our region--admitted to me that there isn't a lot of market activity compared to previous years at this time. I think the hot market is tailing off here.
OK, 10K! You've got a plausible point there!!!
"Any advice and help would be appreciated."
With new construction, there is more at play driving cost increases. There is high demand for building materials and has been for several years, and this is international. Concrete in particular; China is building like mad and sucking up a lot of it, and domestic residential is fighting over the rest. It's also next to impossible to get a good contractor or good subcontractors without paying top dollar; they've got more work than they can handle. This is unlikely to change without a significant decrease in demand across the board, which is being driven by historically low interest rates for home mortgages, largely. Immigration plays a part, too, as does a modest economic recovery in most parts of the country.
As far as price fluctuation, I would say that unless you're in an "overpriced" market, there is not a great deal to fear. I'm building a house right now, and so I've been watching closely for over a year. If interest rates rise above 6.5% to 7%, demand will likely cool from the current frenetic pace, and the more bizarre valuations in some areas are likely to fall back to a degree. But, mortgages in this range are still modest by historical standards; I bought my first home in 1993, at 6.75%, because that was considered so very attractive at the time, for a little perspective.
If, for some reason, we hit a protracted rough patch economically, I suppose that it could be concievable that residential real estate prices could stagnate nationally, or even fall back, but that possibility does seem somewhat remote to me, given our current circumstances. But, if it did happen, the only reason this would be a problem for you, is if you're forced to sell into the flat or declining period. By the time agency fees, etcetera, are taken into account, you will have lost money on the deal. With modest appreciation of around 5% per year, you'd definitely be above breakeven after you'd lived in the house for two years or so. Without appreciation or with a price decline, you're only going to gain equity through paying down principal. Which is the reason that so much fuss is being raised about interest-only, low downpayment loans... no cushion whatsoever in the near term because there is no equity in the property. Some people will get caught, and if enough do, the economic strain could spill over.
That's my take on it, at least. Go with your gut and do what feels right to you. If you plan on living there for a while, and it doesn't stretch your finances or your savings to an uncomfortable degree, you should do fine.
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