03.21.2007 - Wednesday Open Thread
This is your open thread for Wednesday, March 21, 2007. You may post random links and off-topic discussions here.
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82 comments:
When it comes to real estate, timing is everything. And if you're buying this year, your timing is perfect.
Hilarious. Actually, if anybody else has more links like these, I'm looking for some good quotes for the Real Home Salesman Quotes page on Priced Out Forever.
My co-worker is frantically trying to re-fi. It is amzaing to see the hoops she has to jump through now. Last years final pay stub? isn't that same info on the copy of her w-2? She rattled off a bunch of stuff they are asking her for and I just stood there shaking my head.
the squeeze begins.
that's cute e-side. Find some other articles from organizations that bennefit from a continued rise in thje housing market. I'm sure David Lereah has a few out there that you can link to as well.
I've got one question for the Seattle Housing Bulls, and nobody ever answers this because they know the stark face of truth staring back at them...
If Seattle's housing boom is tied directly to local fundementals (aka, jobs, land, pop. growth) then...
Why have local home prices correlated give-or-take, almost exactly to the same runups seen nationally?
Fundementals cheerleaders have never given a reason for this (financecguru, etc...).
But it blows a gigantic hole in the arguement that somehow people are smarter here, and our loans are much tamer, and its different, and we're immune to the credit implosion..
grivetti-
Great point. I went to a US Bank economist presentation last night. He had some decent stats adn took a very safe road but what I was amazed by was the fact that Wenatchee Washington appreciated by 20% last year. It was #2 in the country for 2006. Talk about no fundamentals.
Other hotspots were Bellingham and Bremerton, absolutely amazing.
Why have local home prices correlated give-or-take, almost exactly to the same runups seen nationally?
Actually, they haven't. It started later here because Seattle was still licking its wounds after the dot com collapse. Of course, it was tied to the national phenomenon of historically low interest rates. But locally driven by the recovery of Boeing and the Tech industry. That's why prices are still rising here nationally they're not: Strong Fundamentals
SHUG/INFO,
How come I haven't seen you talk about housingtracker.net stats lately? Is it because they show rising inventory and flatlined appreciation? You used to use the stats from that site on a weekly basis...
Shug/Info/Hammer,
What, in your opinion, are housing market fundamentals?
Of course, it was tied to the national phenomenon of historically low interest rates.
I'll give you the ebb-n-flow of the local economy delaying/accelarating the whens of the price increases, but if historically low interest rates were the instigator of the local housing boom (and its accompanying psychology)... why isn't it Akam's razor, that its bust will be instigated by those very same interest rates?
And you can't deny, the low interest rates spawned the crazy lending we've been seeing (ARMs, i/o's, no-docs, 2-28's,3-27's, neg-ams)which allowed anyone who can fog a mirror to qualify for a home loan/ That absolutely cannot be denied...
So I ask this, why wouldn't the local housing market be at the mercy of this credit cycle here at the end?
Its not as if we've somehow seen the error of our ways, graduated from the bad old days, and luckily had the fortunes of a strong economy to bail us out? (an economy BTW that's sub-par when compared to the late'90's venture capital boom we saw here in Seattle)
Live by the credit-sword, die by the credit-sword
How come I haven't seen you talk about housingtracker.net stats lately?
Rising inventory is normal this time of year...no biggie, it's Spring! That's what's supposed to happen. We went through this last year...our old friend Seattle Price drop kept telling us that inventory was spiraling out of control. That by late Spring the market would be in shambles. But look what happened? Massive double digit appreciation....ooopsss. That's why we don't see him around here anymore. As I suspect you won't be around this time next year when the market is still stable.
Also, we still have historically low inventory. Take a look at 80s inventory...it was over double with no crash!
So I ask this, why wouldn't the local housing market be at the mercy of this credit cycle here at the end?
Because appreciation here didn't happen as fast or as furiously as say, Naples FL. And because we have one of the strongest economies in the US, were as Naples Fl produces what? Sunshine?
Sure Meshugy, I admit, local economies are a retarder/accelorator of increase/decreases, but don't you realize that when the nation-wide recession hit in 2001/2002 it hit the Puget Sound especially hard?
Ergo, if the national economy feels a jolt, Seattle feels it especially hard as it did a few years ago...
Which, if I understand you correctly, you're theory is that housing busts around the country will not feed a national economic downturn... because Seattle relies on economic good-times to sustain its levels of housing appreciation, and Seattle will never see such a 'bust'.
ergo, no recession: no Seattle housing downturn...
but what you can't say is, recession: no Seattle downturn...
Not mutually exclusive the way I see it.
Regional Spotlight: Boston Real Estate Market Heats Up
The Boston real estate market is as hot as it has ever been. Sunday open houses have been jam packed and a multitude of 'over asking' offers are creating a buzz in this downtown real estate market.
condoDomain.com's nationwide network of real estate agents and bloggers also chimed in noting condo markets such as Seattle, San Francisco, Manhattan and Atlanta were experiencing similar trends.
But then there's this, Meshugy?
Mass. home prices still falling
and this...
(Mass) Housing market limps towards vital Spring season
and this...
A suprime sales season could yield price cuts in the Bay State
and this...
2007 may turn into banner year for foreclosings (Boston)
...with this nugget
If the current pace continues, Boston could wind up with 2,500 to 3,000 foreclosure filings by the end of the year, Anderson estimates.
That’s compared to the 1,100 foreclosure filings in Boston last year - the worst in the 10 years he has been tracking these numbers
How am I suppose to believe a statement like this from an online snippet from a place called condoDomain.com...
The Boston real estate market is as hot as it has ever been.
Whaaaaa?
Even you, Meshugy MUST admits that this flies in the face of the reality in Beantown, this snippet was written in hopes of enticing buyers, nothing more, you've got to admit that.
How am I suppose to believe a statement like this from an online snippet from a place called condoDomain.com
I know! And, how am I suppose to believe anything from a place called seattlebubble.blogspot.com
how am I suppose to believe anything from a place called seattlebubble.blogspot.com
Didn't realize The Tim's media empire stretched to "The Boston Globe" and "The Boston Herald"...
You're dodging my arguement, Meshugy.
infoshug,
Because one is created by self-serving financial interests and the other is created buy a dude in Kenmore that believes the emperor has no clothes. Pretty simple answer.
My question is why you spend so much time on this blog. I see a textbook example postpurchase cognitive dissonance.
Shug/Info/Hammer/Dude,
I'm glad you post here. It helps to see what the other side is thinking. You're a great real estate snake to the bubble mongoose (when you aren't sounding like a stalker "where do you live, what's your name?!?!?".)
Shrug/misguided-info
At this point, I see exactly where you are coming from. You are fighting the inevitble, with all your might. I understand that, and as someone in you shoes a while back, I did the exact same thing. Yelling at the top of my lungs that all this was media created, self fulfilling B.S. I actually raised the price on my house for a while to try and tell the world that I didn't buy into this bubble crap. I was fighting an up-hill battle, just as you are now.
I sympathize...really.. I am not being facetious. You are doing your part in the battle to turn the mass meme back into the upward swing. I see your upswing in the number of posts and your desparation in your arguments. Unfortunately, I am sorry to say, it is a losing battle. I fought it for quite a while and lashed out at anybody who tried to tell me the reality of things. I pointed out the same type of articles, quoted the same type of comments.
I am sorry. I appreciate your dedication and effort, but it will be to no avail.
The Tim,
Great salesman quotes abound in this REALTOR commercial. Notice how many of the quotes have a caveat that makes them cover up for rising inventory.
"This is the best market in years, in terms of choice."
"In this market, there's a lot of options."
And some of them are flat out lies.
"If you have a family, it's always a good time to buy." (always?!?!?)
"It didn't make sense for us to spend the same amount of money renting something when we could own it." (Where does this work?)
However, the underlying message of fear (Buy now, or be priced out forever) is there.
"If we didn't buy now, we would have missed the opportunity on this home."
Shug...you ever hear the quote that says that it is better to keep your mouth shut an be thought the fool than to open it and prove it.
shugy-
Inventory is up huge over last year no matter how you manipulate it by area. Look at just Seattle, just King County or the Tri-county region. Up 30%, 40%, 50%. They all say the same thing. Wait until June your double digit appreciation will evaporate over night.
You know it. You track house values. All the appreciation last year was through the first 5 months with most within 2 months. We have not scene that this year. We have been flat for 8 months.
Shug...you ever hear the quote that says that it is better to keep your mouth shut an be thought the fool than to open it and prove it.
"It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt." -- Mark Twain
"It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt." -- Mark Twain
Actually ole Sam plagerized it with his own twist from an asian proverb. The first one is basically the truer interpretation.
"It didn't make sense for us to spend the same amount of money renting something when we could own it." (Where does this work?)
According to Houseingtracker.net it works like this in Raleigh, NC.
Yes, I know. The commute would be a bit painful.
Actually, inventory for SFH in King County is still at historic lows.
Active listings in Feb 2007 were 6124.
In Feb 2004 it was 6688
In Feb 2003 it was 8358
Prices were still rising in 2003 despite much higher inventory
Sorry, we're not even close to a crash.
The funny thing about crashes is that by the time you can see them it is too late to do anything about it. Otherwise it wouldn't be a crash.
There does not seem to be a crash occurring at the moment. I think prices are going to rise for March.
I don't care how strong the economy is in Seattle, affordability is the issue at hand. People cannot afford current prices without exotic loan products. I haven't heard one good argument from these permabulls proving local wages support local prices. That's because they don't. I think it's pointless to try and reason with people like meshugy when they refuse to consider the facts. Besides, anyone who celebrates purchasing a home, along with the herd, at the market peak is quite obviously lacking critical thinking skills.
the key word here is exotic loan packages... and we now know that they have gone the way of most exotics -- rare and hard to get hold of...
so what happens when the first time home buyer can't buy a starter home because of lack of financing... he rents... and that's one less buyer on the market...
Besides, anyone who celebrates purchasing a home, along with the herd, at the market peak is quite obviously lacking critical thinking skills.
Hi Banter,
I bought in April 2005...bears said it was the peak then. Almost two years later the house is worth well over 100K more then when I bought it. Please explain where I went wrong?
Meshugy,
This how I think you mde the wrong decision (granted this is opinion and one that you disagree with -- which is fine).
You leveraged yourself into a risky financial position. The market is bubbling. That bubble might go higher or it might pop. You took a gamble and it paid off.
What if instead of buying a house you had gone to Vegas and put $100k on black? I do not think that is a correct financial decision but you could very possibly win. The fact that you won does not make it a correct decision.
Of course this argument depends on the belief that prices a year ago are not sustainable long term. You do not believe that so based on your beliefs you did not make a mistake. If you did believe prices are bubbling then you would not have made the same decision.
There will not be a deep correction around Seattle. Here's why. Seattle lags the national real estate market by about 2 years whether that's boom or decline. So it could be that when our local market begin to experience a decline the national market has already been in a rut such that the Fed would have to lower rates to stimulate the economy. In fact lower rates will be coming this year. That will place the local realestate market on a sustainable plateau instead of a decline. Also, Fortune has tallied the number of miilionaire in WA which comes to about 120,000 people. In a recession they will continue to invest in realestate which is still the safest investment and that will reasonably sustain the million dollar houses around here.....
Fed Holds Rates:
http://seattlepi.nwsource.com/business/1310AP_Fed_Interest_Rates.html
As if they had a choice...
Wow, Michael...Seattle is special. Still doesn't make me a millionaire.
"You took a gamble and it paid off."
It hasn't paid off yet. and according to Shrug, He's not selling right now. So the gamble is still out there.
Seattle is not special, just lucky.
Because this area emerged out of the tech bubble slowly and didn't follow the rest of the nation in the ramp up like someone had mentioned earlier.
I'm not a millionaire and don't a house but 120,000 is a significant number
meshugy:
The fact that you have repeatedly based your homes value on a Zestimate is enough to discredit you entirely. Unless you pay for an honest appraisal, or have an offer and close escrow for that matter, you have no idea what the true value of your home is. Furthermore, just because you weren't the very last to purchase before the music stopped, doesn't guarantee you a chair to sit on. Nuff said.
"You took a gamble and it paid off."
It hasn't paid off yet. and according to Shrug, He's not selling right now. So the gamble is still out there.
He's up at the moment, but hasn't left the table. You see this all the time at casinos. Someone gets up a few hundred bucks or more, and then proceeds to lose it all and hit the ATM machine. It's sad.
Dude, seek help.
Remember, the house always wins.
And, Michael, these millionaires aren't the ones buying the shit-boxes in Ballard for $500K+ with exotic loans - that's for us serfs.
I wonder how many of the 120,000 are millionaires on paper, but are also caught up in this credit Russian-roulette - that would be interesting to know.
michael said:
"There will not be a deep correction around Seattle.
Fortune has tallied the number of miilionaire in WA which comes to about 120,000 people. In a recession they will continue to invest in realestate which is still the safest investment and that will reasonably sustain the million dollar houses around here....."
BWAHAHAHAHAHAHAHA! Somebody take away this guys crack pipe! Oh man, I have got to thank you. That is one of the best laughs I have had in a few weeks, if not months. Have you sent all of these folks the memo that they are now responsible for carrying the market? My guess is that their pocketbooks are not up for the challenge. That's because there are better than 3,500,000 people in the Puget Sound Area with King County having nearly 2,000,000. Do the math. C'mon Michael, are you really being serious? Lets remember, these folks are millionaires for a reason; shrewd financial decision making. Buying overpriced single family residences which don't cash flow is NOT their cup of tea. Thanks again for the side splitting laughter.
Also, Fortune has tallied the number of miilionaire in WA which comes to about 120,000 people. In a recession they will continue to invest in realestate which is still the safest investment and that will reasonably sustain the million dollar houses around here.....
Can't wait to see how that works out for you. Out of curiosity, if someone is dead-ass broke but lived in a paid for home in Innes Arden that is "valued" at a million bucks are they a millionaire? If that is the case we are more screwed than I thought. A million in assets is not that much. You combine you house and your 401k for the typical 60 yo and you are there.
Don't you feel rich? All these rich millionaires will gobble up all the real estate. Few and I was worried.
Maybe not every millionaire will buy a million dollar home, but as long as there are respectable demand for the high end houses ($1 mil+) then it will not drag down the prices for the lower end. In either case I think the Fed will be the rescuer by lowering rates. also Congress will try to bail out the troubled lending sector. No deep correction.....
"In fact lower rates will be coming this year."
This is NOT "in fact". the Fed wants to lower rates now but can't due to inflation. People are HOPING that the Fed will be able to lower rates, but it very well may turn out that they cannot do so. And doing so may also send the dollar into a tail-spin, creating even more havoc than there is now.
"In a recession they will continue to invest in realestate which is still the safest investment"
I have a relative who is a multi-millionaire, who came to Seattle last year to sell his realty holdings here, as he stated, "at least close to the peak" At least with my personal aneccdotal evidence, the rich won't be holding anything up but themselves.
BTW, the Fortune tally did mention that the networth of these 120,000 millionaires don't include their residence.
Michael,
you too are one of the hopers of the world I see. keep grasping at the crap you are, and you will end up with a hand full of doo doo
Sure, I think there is inflation concerns, but have you noticed that the gov't has been giving excuses for not raising rates?? They cut out parts that have been rising and call them not part of core CPI. the Fed and DC folks know that they can't allow a meltdown in sub-prime and the economy because of the Japanese example in the 90's, upcoming presidential election, tax funding needed for Iraq etc...
Michael,
Seriously dude, quit while you are ahead. BB is a inflationary hawk. Every FED statement (including today's) has been centered around rising inflation. BB is much more likely to sit on the sidelines and let housing implode, than to offer a rate cut. A rate cut right now would be like applying aloe vera to someone at a nuclear bomb site.
Secondly, even if rates are cut, it won't matter. Interest rates are not the main factor in the housing run up. The main factor was loaning money to anyone and everyone. This practice is now being tightened, the effects of which won't be seen in the market for 6-7 months.
Lets think about it for a second. Home ownership is at an all time high. Lending is tightening, more people that would like to be homeowners, can't be. Who is going to continue to buy all these houses to sustain these prices? Illegal aliens?
Well, BB is a new chairman he's not gonna let things implode and have Greenspan get the credit (or for some peopel the current mess) and he gets the blame..... The Dems in Congress will bail out the sub-prime homeowners....
michael-
You have to be joking. You are a complete poser. I don't believe you are real. The million dollar homes will prop up the rest of real estate? And the Government will save us? WOW. Do you teach elementary school math? Seriously, I don't think you are real. I am kind of starting to believe that about shugy. It might be fun to constantly annoy people. I used to love given my sister the "business".
Yeah, I am done with Michael. Either he is an absolute idiot, 12 years old, or jsut trying to push buttons. could be all 3. But I am done.
Shrug is fun. Desparate, been around for a while and worthy of at least a comment or two
Michael,
Do you realize how much mortgage debt is outstanding right now? There is currently over 7 trillion dollars in ARMs alone, and total mortgage debt is more than our NATIONAL debt.
Again, trying to salvage this impending disaster is like to put a band-aid on someone with a chainsaw wound.
Unless you pay for an honest appraisal, or have an offer and close escrow for that matter, you have no idea what the true value of your home is.
We just got an appraisal from Washington Mutual: $550K. We paid $430K
Shrug,
Good thing, or else you might face them calling in the loan
meshugy said:
"We just got an appraisal from Washington Mutual: $550K. We paid $430K"
I call BS. Based on what I've read from you in the past month, I don't take you seriously, and honestly don't believe a word you say.
The credit crunch is on, I have a willing buyer with good credit who is on their third loan program since March 12th (black monday) when many lenders ceased all 100% and subprime lending. The buyers will stop buying even if they want to buy due to the banks pulling the plug.
Prices are already dropping, here and everywhere. Remove investor buyers, remove subprime buyers, remove 100% loan buyers, remove stated income buyers, who's left to buy over priced housing?
This is my second buyer on this property and the first one was denied due to subprime, the second isn't looking too good, I hope it closes or I'm heading for bad times.
Good luck fellas, I just got back from the "hot" area of NC and GA, prices there are dropping and talk of a foreclosure crisis. Can Seattle be far behind?
$500,000 home with just 10% down is $50k, how many potential buyers have that kind of cash laying around?
Good luck to the sellers, the optimists, the next 6 to 12 months promise to be ugly.
Tony in Port Orchard
We just got an appraisal from Washington Mutual: $550K. We paid $430K
Washington Mutual..you got to be kidding..NAIVETE
A friend of mine used to argue against real estate going down. Recently, he was disgusted to say his 1250sf brick tudor just appraised at 540k. Maple Leaf area. He bought in 1998 for 220k. Decent place. Appraisals don't mean anything, ANYTHING. Do you have a clue on how they appraise something. Mostly they look at comps in your area the last six months and make adjustments, small adjustments.
banteringbear--
Unless you pay for an honest appraisal, or have an offer and close escrow for that matter, you have no idea what the true value of your home is.
Shugy gave you what you asked, for but you still call BS. What gives?
"E-sidedave said...
banteringbear--
Unless you pay for an honest appraisal, or have an offer and close escrow for that matter, you have no idea what the true value of your home is.
Shugy gave you what you asked, for but you still call BS. What gives?"
Go re-read my post for your answer. If you want it in one word-credibility.
banteringbear--
Unless you pay for an honest appraisal, or have an offer and close escrow for that matter, you have no idea what the true value of your home is.
Shugy gave you what you asked, for but you still call BS. What gives?
funny...he's been using Zillow all this time and then...when called on it...he somehow produces...ehem...claims a WAMU appraisal within an hour?
Get real.
Mostly they look at comps in your area the last six months and make adjustments, small adjustments.
I keep careful track of comps in my hood...all recent sales support a current value of at least $550K.
claims a WAMU appraisal within an hour?
It was mailed to me last week...
I beleive Shrug. I also know WAMU had my house appraised at a higher value than what it really sold for so they could justify the loan I needed.
Meshugy,
How do you track cash back deals or other trades that may not reflect the actual sales price?
I know things like this are done -- legally even -- but I have zero number of how often it occurs in non-builder sold homes.
WaMu is going to be at ground-zero of the banking crisis in this country.
The fact they send out inflated appraisals to get your business is about as newsworthy as grey skies in March.
At the beginning of the month, Bear Stearns upgraded New Century. The next day it cratered. When someone has a financial interest in propping something up, they say stupid things.
Oh, I have no doubt he got an actual appraisal and for the amount he said. My point is if the methodology used in an appraisal is what someone else paid then I don't really see what the point is.
As far as inventory and pricing goes, the trend isn't looking good for appreciation. For an apples to apples comparison, try looking at what happened according to http://www.housingtracker.net/old_housingtracker/location/Washington/Seattle/
Date Inventory 50th Percentile Asking Price
01/01/2006 3,127 $397,500
03/21/2006 3,353 $415,000
Then this year…
01/01/2007 4,154 $444,900
03/21/2007 4,803 $443,400
Only time will tell what happens in the Seattle market, but the only objective numbers I have access don’t look good for the RE bulls. Are prices up over last year? Sure, but I think they have no where to go but down.
Does anybody here know of anyone that I could use to simply answer the question, "how much would X property rent for?" I am astounded at how difficult this has been to find in Seattle. I rent properties in various cities, and before I buy a property I like to have a second opinion of a local expert in the rental industry as to their guess on the likely rent. Everyone here wants to sell a leasing service where they appraise and advertise the property for you for half of the 1st month's rent, but I am not usually at that stage because I am deciding whether to purchase the property as a rental. I have contacted several major local property management companies, and haven't even gotten anyone to name a rate for this. For all they know I would pay $500/hr, but they don't even make an offer. Very frustrating, I don't see how people stay in business turning away customers.
Hotty, I'd suggest you look at comps. Craigslist, other sources, and look for equivalent type properties.
However, unless you've got a lot of skin in the place, the rent won't likely cover your costs for a long time.
Seattelhotty-
Craigslist will be a place to start but are usually high. All the good places are rented and are cheap. People tend not to give them up. Just take that under advisement. A lot of flippers that are tryign to hold out until Summer are tryign to rent at ridiculous prices. I would just out the property's location and specs and get some advise on blogs. There are a lot of natives or people that have lived here a while.
Oh, and I agree with wtf that nothing cash flows. I looked at putting 20% and the thing still wouldn't cash. CAP rates are a joke right now. Everone is talking about rents doubling which I used to believe over the enxt 5-7 years. I don't believe that anymore. There will be planty of available all throughout the Seattle area.
On another note, two listings I was looking at went STI today one after only being on the market for a couple of days, so someone is still buying. MLS 27042529 and 27040214. It will be interesting to find out the sale price in relation to asking price.
Michael & associates:
Seriously, please understand that the Federal Funds Rate does not determine mortgage rates. I'll repeat myself for clarity's sake. The Fed does not set mortgage rates.
Here is a primer for you:
http://www.themortgagereports.com/2006/12/the_fed_does_no.html
There will be a test 6-12 months from now.
Sorry for the clipped url. Try this one:
http://tinyurl.com/2edhmw
PLEASE.
erik...
I read the article.
The author should learn more about economics. Sure...there is not a "direct" relationship...but it sure does have an indirect effect.
Come back when you have a degree in Economics before you want to act like a professor. Business Degrees are fluff...I should know...I have both.
EconE -
It's not a brilliant piece of work, but I believe that the author (not I) makes a sound point. The Fed can influence mortgage rates indirectly, but the connection isn't direct, so if the Fed wanted to "rescue" the housing market by slashing rates, the fallout in non-housing inflationary effects would be out of proportion to the support given to housing prices. The real estate bulls will have to look elsewhere for their rescue (perhaps divine intervention).
I enjoy your posts, EconE. They are generally very well thought out and informative. You might try to be a bit more polite, though. I will not "come back when I have a degree in economics". I am among the unfortunate few still have to work to pay the rent, even in the new miracle economy.
E.
Erik...pardon my "impoliteness"...but your post really was one of a "you guys don't know what you are talking about" and then you point us to a less than scholarly article written by someone in the mortgage industry that has a vested interest to spin things.
Then your "there will be a test" was really quite an arrogant attitude to take when you are really taking quite a myopic view of how macroeconomics works.
It would take me far to long to explain the relationship and would fly over the heads of 99% of the readers. I could also pick your referenced article apart and make the author appear the fool...however...for the sake of simplicity and also for the sake of the layman who comes across this... I figure I would just submit two charts for your consideration.
This is a chart of the National Average Mortgage rates from 92 to present.
http://tinyurl.com/k5s4c
This is a historical chart of the Federal Funds Rate per Wikipedia...
http://tinyurl.com/23dqh7
I'll assume they are both accurate.
The author seems to believe that the correlation coefficient is somewhere around....oh....zero?
I'd say...that just by looking at the charts...that it is probably closer to 1.
You are correct...lowering the rates won't save the housing market...but raising rates will help to hurt it and Bernanke knows that.
Public Economists have to be very guarded about what they say...that's why I think that Greenspan should keep his mouth shut now that he is out of the picture.
EconE,
Fair points all. I do apologize if my "there will be a test" came off as rude to folks here. By "test" I merely meant that those who think that Bernanke can bail out the housing market my slashing the FFR are in for a unpleasant discovery. If inflation accelerates, mortgage rates are going to go UP, not down. As you wisely point out, BB can't raise rates, either. No surprise then that he made no change this week. Pretty soon the Greenspan believers are going to discover that they can't manage their way out of every problem.
I had hoped that a RE-friendly approach might somehow prove more acceptable to the bulls. I am not the professor, but there is still going to be a test.
Oh, I have no doubt he got an actual appraisal and for the amount he said. My point is if the methodology used in an appraisal is what someone else paid then I don't really see what the point is.
I agree; however, if banteringbear isn't going to take Shug seriously or believe what he says, what is the point in asking him for proof?
While we're at it, could someone please list the companies that can provide an "honest appraisal?"
What does an appraisal mean anyway? All it can mean is the price at which a home can sell for right now. Anything else is meaningless. Shug's house probably appraised correctly for today's market.
The real questions is: Why is shug getting an appraisal. Is he planning to sell or possibly take out a home equity loan and invest his principal in the stock market?
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