Author Topic: Observations from the front lines of the Irvine housing market…  (Read 249371 times)

Offline Compressed-Village

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I don't think the case for higher rate will lower real estate price. How high is too high in rate for the real estate to crash should be the question?

Right now, even Owning is sitting at 3.125 for 30 years, and we know Owning only do primary and stellars credits. If the yield control were not in place then rate historic standards should be 6ish or low 7, right? Then the sky would fall. The key here IMHO is that the FED flood the liquidities into the systems. From Hedge Funds to shadow banking has ample of ammunitions and buy. What will that do to price of assets? It at least stablize. We all saw it. No suprise there.

I agree with you that higher interests won't have a big effect on real estate prices unless they go significantly up.  However, there are a lot of potential buyers who think and hope that even a moderate interest rate increase will cause prices to decline (which it won't).  I think worst case prices will be flattish but from what I see today prices are heading higher.

Some members on here including you, who are correct in saying don't time the market, buy when you can afford it.

The huge problem now is for first time buyers, with the competition from corporate funds, hedge funds and bidding war result in having them priced out. For buyers that already own and trade up, they will have the appreciation of equities in the run up to trade up. Not fair, but that's where we are, unless we have a Paul Volcker style as the next FED chair person. For owners a few will be upgrading because of low locked in fix rate to change up. For young buyers its a bitter pills to swallow. Many will sit out. Hence the stagnate market will soon follow. I think you built a solid reputation not only here but also in real life, so your business stream will continue. For many other realtors, competing is fierce with Zillow, Redfin and even Opendoor platforms taking a huge bite out of their bread.
« Last Edit: October 15, 2021, 02:53:54 PM by Compressed-Village »

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