Home Appreciation

[florida man]

I dont know about the rest of the country, but it seems as though the media is trying very darn hard to train us to believe the mortgage industry is going downhill.

I just ran a report of the home sales in Palm Bay for the months of Jan and Feb, and the numbers are staggering. In my zip code alone (32907) there were over 50 sales, ranging from 5% to 30% over what the general comps from 3 months previous said the the houses were worth.

Where is this 'slowdown' ???

[Erik]

Perhaps they were talking about volume?

[HisHouseMortgage]

Your right Florida Man, Home sales in Florida and certain other parts of the country are booming still. But as Erik says they are talking about volumn. Over the last few years when rates were at the all time low a ton of builders started popping up all kinds of new developements and new sub divisions. I a five mile radius of where I live I counted 17 new sub division projects alone. Now the rates are going back up and they are not selling as fast as they can build any more. A couple of the projects look as though they are at a stand still, they just stopped construction mid way. Now the contractors and builders have to drastically reduce the prices to sell them and this in turn hurts the sales of the older homes because someone can buy a brand new home for almost as cheap as an older one. Now the people in the older home who wanted to buy the newer one can't because thay cant sell the one they are in or have to take a big loss. If you keep following the cycle to where this can lead to you will now see why the financial experts are saying the the housing market has bubbled. And why it is going downhill.

[florida man]

thankyou dude
that sounds reasonable to me. I dont know what you guys think, but i see the inverted yield getting larger as they keep moving the fed rate. The long term isnt moving upward significantly. Sometimes i wonder if Greenspan thought he could dump the fed rate , then just move it back up and everyone would behave accordingly. Now, they want rates upward to a flat yield and its not working out as they planned.

i wish the powers that be would change their plan of action.

[Erik]

Managing the U.S. economy is the toughest job in the world, which is essentially what Greenspan does. He's done very well over his career, for as little as we actually know about how our economy works. Don't be too harsh on the old guy.