oh egads; now that is obscene. Anyone know what really happens when a realestate market bottoms out? Anyone into realestate out there? My market is a little out of whack & I'm curious what I will see over the next decade .... will the prices ever really become realistic?
My two cents and I'm no real estate expert, just someone looking to buy a condo at the moment is that I don't think prices will fall. They'll remain this high especially for family homes in good locations. But if interest rates go up significantly (which they very well might) then people who purchased now at the peak price increase and took on extra debt at temptingly low rates right now may be in for a hard time.
ok - see that confuses my mind ..... if someone buys now at a lower interest rate .... aren't they in better shape than if they buy later with higher interest rates? Or do you mean that the cost of the house was at an all time high? but wouldn't it balance out with a lower interest payment?
Yes, you're right. But low interest rates mean people with a modest salary are plunking down for million dollar abodes, which in all honesty they'd never have been able to afford. They can afford to now because variable mortgages are so low. But as rates rise the cost of their other loans and business will go up but their mortgage payments will be the same. That's if they're lucky enough to be able to lock in without paying the bank a hefty premium to do so.
Either way and specially if they're not lucky enough or too late fixing their mortgage rate then their mortgage payments are relatively more costly because they have less disposable income - More of their earned income is taken up paying higher prices for other things like kids schooling, running a business etc.
But rates are sooo low right now that this isn't much of an issue at the moment at least for the majority of people who paid down on their houses. So it's buy now pay later...
Last Edit: Jul 27, 2005 18:41:06 GMT -5 by Sirenna