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Answers (5)
- SoCal_Engr
- Contributions:5663
"You can multiply these numbers to accommodate any monthly payment yet the results remain the same. As interest rates increase incomes do not and borrowed money costs more. As it costs more to borrow money people can only borrow less. That means as interest rates rise house prices will be forced down to meet buying ability."
That's a nice thought, but not universally applicable. In the late-70's through mid-80's, rates were going up but so were housing prices. I got into the game back in the late 80's. Mortgage rates did drop from the late-80's on - but not enough to account for the rise in prices.
The assumption being made is that there is an inverse correlation between rising rates, mortgage affordability, and housing prices. That leaves out the possibility of mortgage games. After all, with today's consumer, it is not about the affordability of the product. It's about the affordability of the payments.
That's a nice thought, but not universally applicable. In the late-70's through mid-80's, rates were going up but so were housing prices. I got into the game back in the late 80's. Mortgage rates did drop from the late-80's on - but not enough to account for the rise in prices.
The assumption being made is that there is an inverse correlation between rising rates, mortgage affordability, and housing prices. That leaves out the possibility of mortgage games. After all, with today's consumer, it is not about the affordability of the product. It's about the affordability of the payments.
- Tug of War
- Contributions:1947
Well let's see
"Heading into 2012, Florida Realtors say the Sunshine State is already in a mini-recovery with sales trending up and inventories starting to fall."
(Key word might be "say")
"Florida Realtors Chief Economist Dr. John Tuccillo said real estate agents are starting to see multiple offers on Florida homes.
("Key word might be "said")
My Conclusion: Yawn...
All Quotes from Florida Realtors see mini-recovery in the Sunshine State
HousingWire Dec 7, 2011
"Heading into 2012, Florida Realtors say the Sunshine State is already in a mini-recovery with sales trending up and inventories starting to fall."
(Key word might be "say")
"Florida Realtors Chief Economist Dr. John Tuccillo said real estate agents are starting to see multiple offers on Florida homes.
("Key word might be "said")
"Lawrence Yun with the National Association of Realtors, who also" spoke at the event, said local Florida markets are starting to see their inventory levels drop. "That's a major change from just a year ago," Yun said. "Buyers have stepped back into the Florida market."
"Yun is predicting a poignant turnaround in South Florida and expects to see home price gains in Miami and Naples in the coming 18 months".
(Key word is "Yun")My Conclusion: Yawn...
All Quotes from Florida Realtors see mini-recovery in the Sunshine State
HousingWire Dec 7, 2011
- SteadyState
- Contributions:783
Michael Diamond says:
"For the most part yes. Prices in most neighborhoods are on the rise. "
Here is the data from Michael Diamond area (Ft. Lauderdale):
Actual Decline is Sales Prices
Monthly decline: the median selling price has decreases by 2.5%
Quarterly decline: the median selling price has decreased by 11%
Yearly decline: the median selling price has decreased by 6.6%
I guess this means that prices are rising. NOT! Is this called lying to drum up business?
"For the most part yes. Prices in most neighborhoods are on the rise. "
Here is the data from Michael Diamond area (Ft. Lauderdale):
Actual Decline is Sales Prices
Monthly decline: the median selling price has decreases by 2.5%
Quarterly decline: the median selling price has decreased by 11%
Yearly decline: the median selling price has decreased by 6.6%
I guess this means that prices are rising. NOT! Is this called lying to drum up business?
- Michael Diamond, "Michael Diamond"
- Contributions:37
For the most part yes. Prices in most neighborhoods are on the rise. The time a home spends on the market has been drastically reduced in the last year. You will find areas that have a lot of short sales and foreclosures that are still depressed but for the most part we have hit bottom
- Dan, "the_country_hick"
- Contributions:4694
Jeffrey, I say no. The reason is purely economic and based on interest rates.
Consider a buyer who can only pay $500 a month for a mortgage (not including insurance taxes, etc.)
A 30 year $100,000 mortgage costs $491.94 a month at 4.25%.
A 30 year $82,000 mortgage costs $491.63 a month at 6.00%
A 30 year $80,000 mortgage costs $492.57 a month at 6.25%
A 30 year $69,000 mortgage costs $494.32 a month at 7.75%
A 30 year $67,000 mortgage costs $491.62 a month at 8.00%
A 30 year $56,000 mortgage costs $491.44 a month at 10.0%
You can multiply these numbers to accommodate any monthly payment yet the results remain the same. As interest rates increase incomes do not and borrowed money costs more. As it costs more to borrow money people can only borrow less. That means as interest rates rise house prices will be forced down to meet buying ability.
As interest rates rise in the future (and they will) house prices will be forced down to meet buying ability. Just because interest rates rise quickly does not mean incomes will. If incomes remain relatively stable higher interest rates will not allow current prices to continue as buyers can not afford them.
Have we seen A bottom? Perhaps. In a bubble correction there are false bottoms that appear then get lost as the price goes even lower.
Take a look at the link below to see what the housing bubble looked like and how bubble dynamics work when a bubble deflates.
Do you know what the housing bubble really looks like? ... - Zillow Real Estate Advice
Consider a buyer who can only pay $500 a month for a mortgage (not including insurance taxes, etc.)
A 30 year $100,000 mortgage costs $491.94 a month at 4.25%.
A 30 year $82,000 mortgage costs $491.63 a month at 6.00%
A 30 year $80,000 mortgage costs $492.57 a month at 6.25%
A 30 year $69,000 mortgage costs $494.32 a month at 7.75%
A 30 year $67,000 mortgage costs $491.62 a month at 8.00%
A 30 year $56,000 mortgage costs $491.44 a month at 10.0%
You can multiply these numbers to accommodate any monthly payment yet the results remain the same. As interest rates increase incomes do not and borrowed money costs more. As it costs more to borrow money people can only borrow less. That means as interest rates rise house prices will be forced down to meet buying ability.
As interest rates rise in the future (and they will) house prices will be forced down to meet buying ability. Just because interest rates rise quickly does not mean incomes will. If incomes remain relatively stable higher interest rates will not allow current prices to continue as buyers can not afford them.
Have we seen A bottom? Perhaps. In a bubble correction there are false bottoms that appear then get lost as the price goes even lower.
Take a look at the link below to see what the housing bubble looked like and how bubble dynamics work when a bubble deflates.
Do you know what the housing bubble really looks like? ... - Zillow Real Estate Advice
Has the South Florida real estate market hit a bottom?
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- 5.0/5.0
- (3 reviews)
Contributions:2I have seen the seen the statistics. Talked to buyers and sellers. Combed through the inventory and done my research. Has the housing market in South Florida hit a bottom?
My answer is yes. Not because I'm an eternal optimist or because I want to give client's a warm fuzzy feeling, but because my wife and I are in the market and we are actually finding it hard to find a home in a good location and in good condition that we would feel comfortable in. We're not snobs...but a good school system, a safe neighborhood, and a few upgrades would be nice.
We aren't millionaire's looking for a 10,000 square foot home on the ocean, but hard working folks seeking a good spot to rest our heads....maybe a bit pickey but realistic
Please let me know!
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