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Inspect.Net, Inc.'s Advice

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Inspect.Net, Inc. wrote:

Why have San Francisco housing prices jumped up so much in the last year?

Answer
1. lower inventory levels - slowdown in foreclosure processing, reluctant equity sellers, short-sale delays, etc.2. buyers flush with equity - cash & loans (via FED monetary policy)i think the market is bouncing off a bottom, and will begin to establish a base.remember, when the market decides its time to inflate housing prices, the FED will boost interest rates to combat inflation, and that will create a drag on housing prices.since the FED introduced so much new money, you can expect MANY (up to 50, more?) interest rate hikes over a 5 year period WHEN housing recovers ... its completely realistic to expect interest rates back over 10% in the future (as a necessity to combat otherwise rampant inflation)i think RISING interest rates will be a good INDICATOR of when we are in the midst of a sustained recovery ... until then, i think cautious, smart buying remains a safe policy for investors, or equity buyers with stable jobs.regards, jeff
October 30 2012
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