Discussion in 'General Appraisal Discussion' started by USPAP Compliant, Nov 23, 2003.
I read that article a couple of weeks ago. If I recall the study forecasted if rates went up to 8%, by 2006 home prices in Orange County would fall by 47%. That seems like a doomsday scenero. I don't know if 8% on it's own would impact prices that drastically. I think that unemployment and job quality would be more important. If the economy stops producing high paying jobs or outsourced to India I could see a problem. But if you have a good, somewhat stable job (obviously your not an appraiser) and future prospects are looking good, your still going to want to buy that house on the hill. Jobs, Jobs, and good Jobs that's were it's at.
I neither agree or disagree with the story...just thought it was interesting.
We have a generation of people now that have never seen 10% interest rates. That USED to be the majic number. Some of us have seen them over 15% (yes mortgage rates).
It does concern me that we may have potential buyers that will "wait" for the ultra low rates to return. While refinancing will continue it will likely be for cash outs only. Who is going to give up a 5% mortgage for one over 8%?
the sky is falling ... the sky is falling!
I remember 17% interest rates for mortgages.
B) Higher interest rates do not in and of themselves equate to unemployment. What typically happens is we price some buyers out of the market with higher interest rates. That does not equate, in and of itself, to less people working. Like several on this forurm, I have seen many highs and lows. When I first got into real estate in 1972 interest rates were at 7%. When "Jimma" Carter was POTUS, some actually went above 20% for a short time. Now that is high interest rates. We have not seen rates as low as they have been in the past 2 years since Eisenhour was POTUS.
Just think, when rates get back around 10% you can appraise all the forcelosures that Ned the number hitter appraised a few years before.
Keep smiling, look for other types of work than mortgage appraisals, and diversify. With just a little training you could be a home inspector.