tag:blogger.com,1999:blog-13164186.post4013901042018835075..comments2024-01-27T19:26:32.604-05:00Comments on Bubble Meter: Housing after the tax creditDavidhttp://www.blogger.com/profile/11169148764438565562noreply@blogger.comBlogger41125tag:blogger.com,1999:blog-13164186.post-82920576574208095432010-06-13T20:24:08.588-04:002010-06-13T20:24:08.588-04:00Who is the fool who stated "Show me with DATA...Who is the fool who stated "Show me with DATA (either graphically, or tabular) that when interest rates rise, prices of homes that SELL fall"?<br /><br />What he or she doesn't tell you is that during the period prior to the time frame of record high interest rates the mortgage product changed. The most imporant change was the due-on-sale clause. Specifically, assumable mortgages in the 1970s shielded the housing market from higher interest rates. In other words, the buyer assumed the lower interest rate mortage. <br /><br />Second, creative financing resulted in homeowners being offered buy-downs that deferred payment of part of the home purchase price for a few years, after which, many people hoped, mortage rates would be lower. These two substantial changes softened the blow of higher rates. <br /><br />Unfortunately, most of the mortgages issued in the last 10 years are not assumable. Although the FHA has recently made these type of mortgages available, the portion of the market that contains these mortgages is very, very small. So, when interest rates rise, markets that have home values with no fundamental correlation to incomes will certainly fall. <br /><br />The rule of thumb is that you should not buy a home that is more than 2.5 times your income. Those who didn't follow this rule are now losing their homes.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-46382769774971519422010-06-13T19:19:29.684-04:002010-06-13T19:19:29.684-04:00"http://seattlebubble.com/blog/wp-content/upl..."http://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.png"<br /><br />That's one isolated area of the country. Mr. Know-it-all, show me where that happened in all areas. You can't so I won't wait around for your response. You cannot take one area and draw a general conclusion. It's obvious you were not educated at a respectable school. No wonder you are in real estate sales. It's the perfect job for someone who is full of sh*t!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-17076442695524833692010-06-13T18:25:25.206-04:002010-06-13T18:25:25.206-04:00http://seattlebubble.com/blog/wp-content/uploads/2...http://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.pngAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-24795151357630252902010-06-13T15:45:07.965-04:002010-06-13T15:45:07.965-04:00Rates fall and prices rise. Rates rise and price...Rates fall and prices rise. Rates rise and prices fall.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-34721634495741441422010-06-13T13:04:41.899-04:002010-06-13T13:04:41.899-04:00This comment has been removed by a blog administrator.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-66962501253729897422010-06-13T13:03:55.668-04:002010-06-13T13:03:55.668-04:00Mortgage rates near historic lows:
Mortgage rates...Mortgage rates near historic lows:<br /><br />Mortgage rates were down again in the latest mortgage survey released by Freddie Mac on Thursday. In the latest Primary Mortgage Market Survey, 30 year mortgage rates were down to 4.72 percent for the week ending June 10, 2010, down from the prior week’s average 30 year mortgage rate of 4.79 percent. Mortgage discount points averaged 0.7 points, down from the prior week’s average of 0.8 points. The reason for these near historic low mortgage rates is bond yields fell last week on the weak employment report and mortgage rates followed lower.<br /><br />http://www.monitorbankrates.com/mortgages/mortgage-rates-near-historic-lows-30-year-mortgage-rates-at-472-15-year-mortgage-rates-at-417-5055Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-31263530303655755052010-06-13T12:15:47.383-04:002010-06-13T12:15:47.383-04:00"Rates are at or near near all time lows.&quo..."Rates are at or near near all time lows."<br /><br />No, they WERE at all time lows when that little tiny blip that you can barely see on the chart I posted. Now they are raising and prices falling. Dont tell me you cant read a line graph silly goose! FAIL, try again! ;)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-6025118600197543282010-06-13T10:45:18.224-04:002010-06-13T10:45:18.224-04:00ding ding ding, survey says! PRICES ARE FALLING, W...ding ding ding, survey says! PRICES ARE FALLING, WHILE RATES ARE RISING!<br /><br />Rates are at or near near all time lows.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-82501339824724424762010-06-13T09:42:32.576-04:002010-06-13T09:42:32.576-04:00I think the last guy missed this chart...
http://...I think the last guy missed this chart...<br /><br />http://mysite.verizon.net/vzeqrguz/housingbubble/united_states.png<br /><br />ding ding ding, survey says! PRICES ARE FALLING, WHILE RATES ARE RISING!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-79861008590647294532010-06-13T09:01:27.739-04:002010-06-13T09:01:27.739-04:00"When rates rise prices will fall. Like those..."When rates rise prices will fall. Like those idiots who professed home prices never fall, the idiot above will be proven wrong."<br /><br />Yes, yes, thats it. Keep believing that despite the evidence to the contrary:<br /><br />http://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.png<br /><br />Incidentally, your line of argument above is one of my favorite. First you make your statement (rates rise/prices fall). Second, when presented with evidence that is wrong, you use poor examples to refute it. Third you make an enormous flaw in thinking by saying they were buying bigger houses. Finally when all else fails, you circle round to the beginning and just declaratively say, "when rates rise, prices will fall".<br /><br />Its beautiful. You were put into check time and time again. Finally when pressed you just stubbornly reiterate your belief - almost as if if you keep on stating it, it will come true. Classic!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-20350016513915474872010-06-12T09:33:57.667-04:002010-06-12T09:33:57.667-04:00what do you call the current prices declining as r...what do you call the current prices declining as rates go up then?<br /><br />Current prices declining? Are you sure? NVAR reports<br /><br />2009<br />July +2.8% YOY<br />Aug +1.3% YOY<br />Sep +7.7% YOY<br />Oct -0.6% YOY<br />Nov +11.6% YOY<br />Dec +13.2% YOY<br /><br />2010<br />Jan +11.8% YOY<br />Feb +13.2% YOY<br />Mar +6.4% YOY<br />Apr +9.3% YOY<br />May +7.7% YOY<br /><br />I love these "declines"!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-29127129272676678952010-06-12T07:59:44.204-04:002010-06-12T07:59:44.204-04:00"The point stands. There is zero data (and I ..."The point stands. There is zero data (and I do stress ZERO) that suggests higher interest rates automatically equalls lower prices"<br /><br />I havent been in this argument yet...but what do you call the current prices declining as rates go up then? Is that not data? Look at the chart on the right of this blog...see how prices keep dropping? I think its cute!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-12778095453129272012010-06-11T16:36:10.549-04:002010-06-11T16:36:10.549-04:00"Bigger homes were being built with more squa..."Bigger homes were being built with more square footage and that explains price increases during higher interest rates. You need to compare apples to apples." <br /><br />You are undercutting your own argument here. If the assumption is higher rates = higher payments = lower prices, why would people (who presumably are strapped by the relenting pressure of high interest rates) buy bigger and bigger homes?<br /><br />The point stands. There is zero data (and I do stress ZERO) that suggests higher interest rates automatically equalls lower prices among the homes that sell. If anything, the DATA suggests prices otherwise.<br /><br />But again im open to seeing the other side of this. Ive trolled many many blogs with this issue and none of them have come up with any data to prove otherwise, but I guess you could be the first.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-29657787636919008572010-06-11T16:17:51.986-04:002010-06-11T16:17:51.986-04:00You are not antagonizing anyone. You are making a ...You are not antagonizing anyone. You are making a fool of yourself.<br /><br />If you are so upset that you feel compelled to respond, even to say "it doesnt bother me" id say antagonization accomplished!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-19186799116499159502010-06-11T15:59:42.268-04:002010-06-11T15:59:42.268-04:00"Try again please..."
Bigger homes were..."Try again please..."<br /><br />Bigger homes were being built with more square footage and that explains price increases during higher interest rates. You need to compare apples to apples. <br /><br />" love nothing more than to antagonize doomers who cant see a bottoming process right in front of their faces!"<br /><br />You are not antagonizing anyone. You are making a fool of yourself.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-28853786401759009662010-06-11T15:52:50.717-04:002010-06-11T15:52:50.717-04:00"Its probably no surprise that they were stil..."Its probably no surprise that they were still recovering from that in 2000."<br /><br />So then would that 8 year period of no price gains be a good measurement for this current bubble period? Will values in the DC area be sideways until 2013 if the bottom was 2005?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-66098110311378161282010-06-11T15:49:06.404-04:002010-06-11T15:49:06.404-04:00Someone has a reading comprehension problem.
Th...Someone has a reading comprehension problem. <br /><br />The question was, what proof, if any is there that when interest rates RISE, it causes prices to FALL.<br /><br />It is not a question of falling rates and falling prices or falling rates and rising prices the operative language, once again is<br /><br />"Show me with DATA (either graphically, or tabular) that when interest rates rise, prices of homes that SELL fall"<br /><br />Try again please...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-89477365071368203542010-06-11T15:21:26.771-04:002010-06-11T15:21:26.771-04:00"Show me with DATA (either graphically, or ta..."Show me with DATA (either graphically, or tabular) that when interest rates rise, prices of homes that SELL fall"<br /><br /><br />Anon 2:33 PM topped you! He or she showed you where interest rates FELL prices FELL. Someone got faced!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-75510441435872249852010-06-11T15:19:41.002-04:002010-06-11T15:19:41.002-04:00"That is probably because the early 1990s bub..."That is probably because the early 1990s bubble."<br /><br />Yep. Plus if thats census data, he is talking about DC proper. At the time, DC was being roiled by the crack epidemic in the early decade. Back then, it was the murder capital of the USA and people were actively fleeing for the burbs and no one in their right mind would move to the city run by Marion "the bitch set me up" Barry. The conditions were so bad back then that most of us here would not move there at any price. If anything, im surprised prices did as well as they did.<br /><br />As an aside, its nice to see some life in this board again! I love nothing more than to antagonize doomers who cant see a bottoming process right in front of their faces!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-36762994145461005292010-06-11T14:49:22.835-04:002010-06-11T14:49:22.835-04:00"Actually, interest rates were declining from..."Actually, interest rates were declining from their highs. Why did prices go down?"<br /><br />Different anon here. That is probably because the early 1990s bubble. I know this area had a decent downturn where prices bottomed in 1992 and then went sideways til about 1997. Its probably no surprise that they were still recovering from that in 2000.<br /><br />Do you have the prices for the most recent period (say 2007 or 2008)?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-19113085673364754502010-06-11T14:33:50.463-04:002010-06-11T14:33:50.463-04:00Let me help you because I don't think you woul...Let me help you because I don't think you would want to share that data with everyone. In fact, it's in your industry's interest not to. Remember what they have told you, stress the positive and do everything to dismiss the negative. Because you are focusing on DC, we will stay with DC. Ready?<br /><br />Dist. of Columbia median home values<br /><br />1940: $78,800<br />1950: $87,800<br />1960: $75,900<br />1970: $81,800<br />1980: $136,200<br />1990: $158,300<br />2000: $157,200<br /><br />Source: U.S. Census<br /><br />So tell me, from 1940-1950 prices only climbed $9,000. From 1960-1970 prices climbed approximately $6,000. From 1970-1980 prices climbed about $54,000. From 1980-1990 prices climbed $22,000. From 1990-2000 prices DECLINED $1,100.<br /><br />So for the 10-year period of 1990 - 2000 prices declined! Could you explain that one? Inerest rates were not excessively high. Actually, interest rates were declining from their highs. Why did prices go down?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-719576801819500472010-06-11T13:39:45.074-04:002010-06-11T13:39:45.074-04:00"100% Correct. Lets look at sales in the DC a..."100% Correct. Lets look at sales in the DC area 1979-1982 as rates soared."<br /><br />Could you provide price data for DC from the period of 1990 to 1996? <br /><br />And would purchases of higher priced homes skew the price data? In other words, if the majority of homes purchased during the high interest rates period were homes valued above the median value, would that contribute to price inclines during that period?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-88067580452940653582010-06-11T13:24:30.775-04:002010-06-11T13:24:30.775-04:00"Second, when interest rates rise it removes ..."Second, when interest rates rise it removes a income-sensitive segment of potential purchasers from different market levels. That is a proven fact."<br /><br />100% Correct. Lets look at sales in the DC area 1979-1982 as rates soared.<br /><br />Sales <br />1979 23,043<br />1980 19,527<br />1981 15,155<br />1982 12,435<br /><br />So again, you are right, as rates soared, sales fell off a cliff - no doubt about it.<br /><br />Now, lets see what happened to prices during this time.<br /><br />1979 $79,838<br />1980 $90,744<br />1981 $100,050<br />1982 $103,631<br /><br />Clearly, despite the huge decline in sales as interest rates soared, as I noted in the beginning, prices didnt suffer in the slightest.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-66166086528559267972010-06-11T13:11:52.660-04:002010-06-11T13:11:52.660-04:00"First, home values did not increase 100% - 3..."First, home values did not increase 100% - 300% in the period prior to 1982-83. Those values were fundamentally sound. So comparing this bubble period to that time frame is analytically incorrect"<br /><br />Take a look again at the graph of home prices, 2006 - 2009. Have they not fallen substantially? I would agree with you if we were facing 2006 prices but we arent.<br /><br />I know you want to believe that high interest rates will cause housing prices to crash, but you have ZERO factual evidence that that is the case. Sure a bunch of gurus out there say it, but they have nothing to back their assertions up. <br /><br />Show me with DATA (either graphically, or tabular) that when interest rates rise, prices of homes that SELL fall. Show me one intance in history where this has happened to home prices in the USA. You will find that there is none.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-30012049163075797482010-06-11T13:01:25.418-04:002010-06-11T13:01:25.418-04:00The only thing I see flawed is, one of two things....The only thing I see flawed is, one of two things...<br /><br />Either you guys are full of crap<br /><br />or<br /><br />All the charts showing things still falling is full of crap.Anonymousnoreply@blogger.com