2007-01-25 06:11:12 · 4 answers · asked by douglasrrobinson 1 in Business & Finance ➔ Renting & Real Estate
When interest rates dropped, it was easier for people to get more money than they ordinarily could. People could now buy houses that they couldn't afford before. So everyone wanted to buy houses...the prices went up especially with "speculators" and "flippers" - people who wanted quick returns on their real estate investments. So you will find houses to be extraordinarily over-priced in a lot of markets...as interest rates increase and money becomes difficult to obtain..prices will come down...softly - hopefully - as opposed to hard where people will be upside down in their investments, owning less house than they owe..
2007-01-25 06:23:00 · answer #1 · answered by dashel_gabelli 3 · 0⤊ 0⤋
Devaluation - Value of the U.S. Dollar is falling at a rapped pace because our nation keeps borrowing money and spending money that it does not have.
Regulation - Government keeps getting bigger and to survive eats more and more of the nations GNP (Gross National Product). Raising costs of products across the board. House values are affected by the cost to replace the structure - that is rising,
Population - As our population increases the number of people per unit of land increases. Scarcity Principal indicates that with more buyers for a given supply price will increase.
Economy - The economy is fairly good right now and there is more money available for people to spend on houses.
Interest only mortgage - A few years ago the, for the first time in lending history, the number 1 mortgage product - in both quantity and dollar volume - became the variable rate interest only loan. Allot of people bought more property than they could have financed with a traditional instrument. If (When) there is a down turn in the economy many of these borrowers will not be able to pay their bill. Inflation can also bust the bank. If (when) that happens there should be a substantial drop in real estate prices.
2007-01-25 16:10:55 · answer #2 · answered by Eric C 3 · 0⤊ 0⤋
It's not. It depends on location and the desire to live there. I've lived in southern cali for all my life & have seen the prices soar lately. It's very overcrowded here now. Yet in Washington where much my family lives, it's beautiful and hundreds of thousands cheaper. Location, Location!
2007-01-25 14:22:24 · answer #3 · answered by somepoopheadstolemyscreenname 2 · 0⤊ 0⤋
Housing is not expensive in all US cities / states...
2007-01-25 14:18:45 · answer #4 · answered by Anonymous · 0⤊ 0⤋