Feds raising rates and home prices

acf said:
What are your thoughts on how this will affect home prices?
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Im not sure, but home prices are rate sensitive especially at the higher ends.  If you consider a rate increase within a vacuum, it should put downward pressure on home prices. 
 
The increase will probably trickle down to long term rates later on, except if it's ARM or equity rates...

My opinion is that prices are still more dependent on supply and demand.  (Hot areas will still increase).
And then dig down further to see job growth/unemployment, wage levels, demographic shifts, foreign money/investors, etc etc
 
I expect it to temper prices (reduce the chance of a bubble), but not decrease prices. Ironically the only thing that will reduce prices is a recession which will also have the Fed quickly lowering rates again.
 
Higher than average pricing in Irvine will impact those who were able to afford it with an ARM before rates went up. Thus shifting demand to lower priced markets, which will keep prices flat. Since I own a home in Irvine I hope this is not the case and FCB continue to support the market until I sell  >:D

 
Banks are not going to budge on the rates.  Only the buyer and seller will have to make the adjustments. 

With all these housing developments going on.  Stonegate, Portola Springs 3, District 5 Great Park, Beacon Park, Eastwood Village, Cypress, Orchard Hills + North.  They are turning this into more of a buyers market.
 
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