Hve the Good Times Rolled Away

[Kidlicious]

Originally posted by Zkribbler


As I see it (whichi is probably overly simplified): Higher gasoline prices --> higher shipping costs --> higher prices for goods --> inflation (or perhaps just fear of inflation ) --> higher interest rates -> borrowing is more expensive --> real estate prices begin to drop and demand decreases.

I think you need consumer confidence in there somewhere.

[Zkribbler]

True....but wouldn't consumer confidence be a manifestation of the absence of fear of inflation?

[Kidlicious]

Originally posted by Zkribbler
True....but wouldn't consumer confidence be a manifestation of the absence of fear of inflation?

I think that's basically correct. I think the higher interest rates have more to do with consumer confidence and how much they will spend. It's all connected.

[Kuciwalker]

Re: Hve the Good Times Rolled Away

Enough on the variants of the same thread title. We've had probably 5-7 in the past week.

[Shi Huangdi]

Re: Re: Hve the Good Times Rolled Away

Originally posted by Kuciwalker
Enough on the variants of the same thread title. We've had probably 5-7 in the past week.

I especially blame the jerks in Fairfax County for the energy crisis. Just the think of all the energy they waste heating those huge homes that have 500 bathrooms.

[Japher]

I'm waiting for the housing bubble to pop
then I'd say that it has rolled

[DanS]

Originally posted by Zkribbler
As I see it (whichi is probably overly simplified): Higher gasoline prices --> higher shipping costs --> higher prices for goods --> inflation (or perhaps just fear of inflation ) --> higher interest rates -> borrowing is more expensive --> real estate prices begin to drop and demand decreases.

The interest rate is like gravity in the economy. As it increases, all assets become less valuable, not just real estate.

[Japher]

when do you think bonds will be hot again?

[Kidlicious]

Originally posted by Japher
when do you think bonds will be hot again?

When DanS stops posting "Let the Good Times Roll"

[pchang]

International bonds are relatively hot right now.

[Zkribbler]

More bad news from CNNMoney.com

Housing starts and building permits were down sharply in April, and builder confidence is at its worst level in almost 12 years, according to an industry survey.

The article goes on to observe that many people have been maintaining their standard of living by borrowing against the increasing equity in their homes. If this source of money dries up, then consumer spending will fall and the downturn will be felt over a wide spectrum. (

[Imran Siddiqui]

I'm also not sure you can entirely blame higher interest rates on a downturn in the real estate market. After all, haven't we been crying about a real estate bubble since the mid 90s? It's bound to go down at some point. Whether this is it, or simply a correction, who knows, but there are other factors at play.

[Zkribbler]

True. IMHO, real estate prices have overheated in the past couple of years. Speculators drive up the price of real estate, and rising prices attract more speculators.

But with the looming spectre of higher interest rates, speculators are beginning to realize the party's over.

BTW: There almost certainly will not be a crash like we see occasionally in the stock market. Real estate is illiquid because (a) it takes a while to unload real estate and (b) people have to live somewhere. So, even a worst case scenario will just be a slow decline in prices.

[chequita guevara]

How insane is my housing market? Sales ar down 31% from last year, and the median price of a home is up 14%.

[MRT144]

Originally posted by Shi Huangdi
Blame the jerks who feel the need to live 80 miles away from work so they can afford a huge McMansion and then drive a Massive SUV all the way for pushing up Oil Demand.

shi, a right wing ascetic?