Comments on: Here Come Higher Interest Rates

By: Krisstina Wise

Krisstina Wise — Fri, 25 Sep 2009 21:11:26 +0000

Maury — Thank you for your comment to my “V” conversation. I appreciate your response.

To reply, I don’t think there is any argument that prices may go down more in many markets. This conversation centers around not speculating about when home prices will hit bottom (since without a crystal ball, none of us can probably predict) but recognizing that in today’s market both interest rates and prices are low as well as we have many ‘incentives’ — which means a unique buying opportunity that may not exist again in any near future.

This conversation is designed for people who want to buy but are ‘on the fence’ waiting for “the bottom”. My claim is that we are in one form of “a” bottom not necessarily “the” bottom.

For those wanting to buy but waiting to buy — maybe NOW is a good time b/c of the unique IR/P situation and incentives in the MP. In other words, the purpose of this blog was not to ‘convince’ people that we are at “the bottom” and as a result they should by. The purpose is to bring forth the unique opportunities in the market today that may not be obvious to those ‘on the fence waiting to buy –who may now have great reasons to finally buy the home they have been waiting for.

Thanks again for your thoughts!

By: Krisstina Wise

Krisstina Wise — Fri, 25 Sep 2009 21:10:54 +0000

Sue — thanks! Yes, I will see you tomorrow morning — I believe Jack is going to pick you on his way to the office this morning.

By: Sue Adler

Sue Adler — Fri, 25 Sep 2009 21:09:44 +0000

Kristina, You not only were spot on with the psychology of the fence sitters, but the way you explained the once in a lifetime opportunity buyers currently have in this market was just brilliant. Great job!

I have you on my calendar for Tuesday morning. Are we still ok? Looking forward to it!

Sue

By: Maury

Maury — Fri, 25 Sep 2009 21:09:09 +0000

Well, another graph to look at would be the Case Shiller index which shows that houses are still more expensive now than they were at their peaks in previous decades. There is plenty of room for the “price” dot to go down. In fact, house prices will drop another $8K as soon as the government stops giving away tax payer money to prevent house prices from free-falling.

Not to mention, there are a HUGE number of loan resets coming up in Sept/Oct, (Alt-A, Option ARMS, Interest Only) all around the same time that people who have been unemployed for a year will no longer receive unemployment benefits.

Doesn’t matter what you think your house is worth if the houses across the street are a short sale and a foreclosure.

Nobody knows for certain, but that V graph is a bit misleading and arbitrary. Prices not only can fall, but have to in order to get back to historical norms. The government is just trying to slow the natural progression, but it will happen all the same.

By: Mary Pope-Handy

Mary Pope-Handy — Fri, 25 Sep 2009 21:08:24 +0000

This is what I’ve been telling my Silicon Valley buyers, but without the “V”. That’s a good visual aid! [I tend to think of the ratio between prices and interest rates as more of a "scale of justice" image - when one is down, the other is up - with the current situation pretty much being the anomaly that seldom happens.]

Your helpful diagram will make it easier for consumers to understand what a great opportunity we have today. Good job.

By: Garry Wise

Garry Wise — Fri, 25 Sep 2009 20:54:54 +0000

This is an excellent and simple way to describe the current status of the Austin real estate market to everyone….I applaud you in your ability to simplify a very complex marketplace and what it means for buyers to take advantage of the situation.

Well done.