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Originally Posted by red92s
Since we all generally seem to agree that home price trends were an unsustainable "bubble" back in 2006 . . . why are we touting them as "on sale" now. Maybe they are not so much "on sale" now as they were "way overpriced" back then. A return to sustainable, historical pricing trends is not a "sale".
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I think it's more like an out-of-balance equilibrium. I expect that home prices really are currently lower than they should be ("on sale"), just because of a reaction to market conditions. Average values are lower than they should be, and will probably return to some higher value (though less than what they were during the 'bubble'). It's the same as with the investments market. As a reflex to current conditions, valuable stocks are currently underpriced as an over-reaction -- people freaked out and sold
too far. So in that, I agree with the author.... it's a good time to invest or buy a home, IF THAT WAS ALREADY PART OF YOUR PLAN. Someone shouldn't go try to buy a home right now just because the market's good for buyers.
Two things I think the author missed, however... first, she said this:
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Interest rates are still near generational lows but are likely to shoot up once the recovery begins.
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.... what that means to me, a 22-y/o who won't be buying a house for at least 5-10 years, is that when I go to buy, my mortgage rate will be through the roof.... great.... Also, she totally ignores inflation. With all the gov't spending going on right now, we're gonna have inflation like crazy in a decade or so. I can't really consider that "good news"....