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Housing - Is The Big Whoosh On The Way?

You know the feeling. You light the BBQ and for the next half a second you're holding your breath for the whoosh. It's uncomfortable.

That's what housing feels like to me recently. The whoosh is certain to come, but which whoosh is coming? Inflation or more of the same, falling real estate values?

I read a post from Broker Bryant and he quoted the current value of a home in Florida compared to the price a few years ago. Admittedly, as I skimmed his post, I thought he was guilty of a typo and left off a zero. It gave me a lump in my stomach.

Even so, it's easy to be lulled into thinking current mortgage rates and affordable real estate values will last forever. But here is what I asked myself this week-end. Can condo prices two years ago at $150,000 and now offered at $20,000 go any lower?

Read this about current mortgage rates and buying a house. Give me your opinion. Which whoosh do you think is coming?

Your MortgageBuddy, Kate Ford

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Posted by Kate Ford Mortgage Translator on 07/20/2009 09:16 AM

Comments (18)

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18 Comments on Housing - Is The Big Whoosh On The Way?

JUL

$20,000 condos...I dont think those can go lower that is a huge drop. Buy now!

Chuck, you read my mind. How COULD those condos go any lower?

How about if the property had been a million and currently down 50%? Would we be as confident? Kate

"Even so, it's easy to be lulled into thinking current mortgage rates and affordable real estate values will last forever." Yes, and it was easy for many to believe that the bubble could never burst.

As to your question of which of the two is coming, I think both. Housing prices will continue to decline in many areas, although at a significantly slower pace. And inflation? It's coming, but no one knows when. My guess is not for another year or two. Then, strap on your seat belts!

John, If only we could e-v-e-n out the market... Wouldn't we be the Thomas Edisons of real estate! Thanks for commenting. Please come back. Kate

Hi Kate: I don't think we are out of the woods just yet.

Hi Matt, So many factors contribute to an economic recovery but as my 90 year old father (retired banker and current investor) says, no one alive has seen anything like this. Thanks for commenting, Matt. Come back and visit, okay? Kate

Kate , I am with you. It is terible how everyone is just accepting this and not truly focusing on it.

Hind site will be 20/20. Our grandchildren will study this era to learn the comparison between today's homeowners and the dust bowl farmers of the depression. Always nice to hear from you Terry. Have a great week. Kate

I'm with John, in many places prices will continue to fall. At some point, we don't know when that point is, will get hit with inflation will hit. What the government is doing is like trying to patch boulder dam with crazy glue.

Suesan, or duct tape and caulk, a frequent subject here on AR But seriously, will the same thing happen like trying to hit the very bottom before locking an interest rate? One lesson we learn over and over is that we never know prices or rates hit rock-bottom until we're on the way back up. Thanks for commenting. Kate

Kate, I'm a firm believer in purchasing when I feel I've gotten the deal that I really want. So if the house is priced right, and the rate is at a point that makes sense and I can afford it, then I'm in. I certainly don't wait to see what the rate is going to be tomorrow. After all, like you just said, you don't know you hit bottom till the price starts to climb again. Tomorrow might be the day the crazy glue, duct tape and caulk all gave way and the dam let all the water out.

That being said, I still think this market is going to sink further and I do believe we will be hit with inflation. BTW ... we purchased 3 properties in the past 10 months, I try to practice what I preach ... LOL. They were such a steal. Thanks for the friendly discussion.
Sue

Getting a good deal might not be the rock bottom price. Same with rates. That is why I named my mortgage website, How To Get The Best Mortgage Rate. (not how to get the lowest mortgage rate) Have a great day, Kate

Hi Kate - Here's what I think; An upside whoosh is coming to California next 10 -15 years. All we need is for jobs to come back and when they do we will quickly find out there are not enough homes.

If I may, I would respectfully like to comment further re:

Where is the government getting the money to fund a financial recovery?

The government can spend whatever it wants without raising taxes and without borrowing. I repeat, a government that spends in it's own currency, by definition, is not constrained by the amount of money collected in taxes or by the amount of treasuries it sells. http://mosler2012.com/wp-content/uploads/2009/03/7deadly.pdf

Sincerest,

Jill K