MaxedOutMama
Thursday, July 27, 2006
For Ilona
Ilona, you might find this post at The Housing Bubble blog about your greater area helpful. There are also excellent comments on the post. I have found, by the way, that discussions on these housing blogs and forums, while anecdotal, have been predictive of later compiled statistics.
I think what is really going on in some of these markets is that for years, real incomes having been decreasing.
Second-level factors are the increase in mortgage rates and the increase in fuel costs. These factors are too small to have a great impact on inflated areas, but in areas that haven't seen the big run ups in pricing they do exert an effect. As one commenter on the linked post wrote:
I cannot even see any one of these factors shifting direction in the near future, so I would expect the sellers' market in your area to continue to slow over the next year and a half.
I think what is really going on in some of these markets is that for years, real incomes having been decreasing.
Second-level factors are the increase in mortgage rates and the increase in fuel costs. These factors are too small to have a great impact on inflated areas, but in areas that haven't seen the big run ups in pricing they do exert an effect. As one commenter on the linked post wrote:
Maybe it wasn’t a bubble in the Cincinnati, but that doesn’t mean that the drying up of credit won’t impact prices there too. Mortgage markets, moreso than the houses themselves, are national. The credit markets will tend to have more effect in markets that that had housing bubbles. But nearly every house transaction is, at least in part, financed by credit, and so, therefore, every house price has at least in part been affected by the mortgage finance bubble. Even in markets far removed from the insanity of the coasts there will be ripples in pricing as the credit markets adjust to the new market conditions.And then there are the demographics of some areas, in which there are just more retirement-aged people ready to sell out than there are young people who can afford to buy in. In any case, once everyone gets nervous appraisals become more cautious and underwriting standards tighten. The qualifying loan sizes for the buyers in the market drop, and all of these factors combine to slow real estate sales.
I cannot even see any one of these factors shifting direction in the near future, so I would expect the sellers' market in your area to continue to slow over the next year and a half.
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Thanks so much. I should rename you Sweet Mama, but I think someone else has that one, -they don't deserve it as much as you tho'!
I was just coming over here to link you on this topic. Your reporting on this is truly a public service.
I was just coming over here to link you on this topic. Your reporting on this is truly a public service.
Here's something you seem to ignore: prices rise in proportion to the money available. If it weren't for two income families financing the RE bubble it would not exist; nobody would have the money to buy. This affects cars and any other big ticket item.
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