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Lawrence Yun was saying everything is fine all the way down to the bottom. :rof:
 
Joe Flacco said:
I dunno. When I look at rates vs prices, I see no correlation. Or minor correlation. Rates were shooting higher in the 70's and prices increased anyways. And 90's when rates declining prices declined.
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V=IR. This brings us back to GRMs.

One thing about rents is that they CAN'T get too far ahead of employment and income trends. That money is all local. No domestic or offshore investors involved.
 
George Hatch said:
V=IR. This brings us back to GRMs.

One thing about rents is that they CAN'T get too far ahead of employment and income trends. That money is all local. No domestic or offshore investors involved.
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I guess I agree with that. But I think you said so yourself that GRM looks normal in your area at this time.

The thing with income trends vs real estate price is that just new buyers in the neighborhood or market need higher incomes that can afford the higher prices. It's not necessarily that incomes of all residents in the neighborhood or market need to be increasing. New residents in the neighborhood with higher incomes would obviously raise the median income but may not by as much as expected when comparing to housing cost.
 
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Joe Flacco said:
I guess I agree with that. But I think you said so yourself that GRM looks normal in your area at this time.

The thing with income trends vs real estate price is that just new buyers in the neighborhood or market need higher incomes that can afford the higher prices. It's not necessarily that incomes of all residents in the neighborhood or market need to be increasing. New residents in the neighborhood with higher incomes would obviously raise the median income but may not by as much as expected when comparing to housing cost.
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Firstly, I think the GRMs for detached units are already past the long term trendline, even if they haven't yet reached 2008 levels - and we already agreed that most people don't expect the extremes of 2008 again (although theoretically it could).

I've been saying this all along so let me repeat it one more time. I don't think we're at the peak just yet, but neither do I think this trend will continue indefinitely. It isn't possible to predict what kind of trigger event it will take to spook a herd that is running in part based on the market psychology or when it will happen. However, the volatility of that variable works both ways. There is no saying that the trigger event won't happen for another 5 years but there's also no saying that it couldn't happen now.


As for rents and except for rent controlled areas, they're subject to annual increases regardless of how long someone has been there. So no, it's not just the new residents that will need more income.
 
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My construction loan in 1992 was 11.75%. Permanent financing 10.25%. Refi'd about 96' at 8.75%....refi'd ARM and went down to 6.5% in last two years I has a mortgage. I borrowed for 15 year terms initially. 30 year financing was for VA and FHA almost exclusively here. My first in laws were the first people I knew with a 30 year loan and they paid on it until the year John retired at age 62.
 
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