Monday, November 07, 2005

Quantitative Analysis

There is a comment over at the Housing Bubble 2 blog that is well worth reading. The commentor is an MIT staff member explaining that a 1% increase in interest rates corresponds to roughly a 10% decrease in housing affordability for standard loan types; it's more like a 16% decrease for those with ARMs and IO loans. If the mortgage tax reduction proposal is implemented, then we are looking at an additional 15% drop on top of each drop due to interest rate increases alone. Check it out.

2 Comments:

Anonymous Anonymous said...

I went to three open houses yesterday in Novato. I saw other "lookers" at only one of the houses. Maybe the other lookers stayed home to watch the 49ers. Maybe the bad weather kept them away.

At one of the houses, I asked the realtor if the market had cooled. The realter said the market had cooled, and that buyers were "waiting." However, the realtor advised me to buy before interest rates went up.

Nov 7, 2005, 11:58:00 AM  
Blogger sf jack said...

I was at the 49ers game. They are terrible - trust me, no one stayed home to watch them on TV.

I like that line from the realtor - captured it perfectly: buyers are "waiting".

But then he/she blew any sense of integrity.

"They're waiting. Uh... no, no, never mind. Don't wait! Buy now, yes, before rates go up!"

My favorite industry line: "It's always a good time to buy."

Well, except when it isn't.

Nov 7, 2005, 4:40:00 PM  

Post a Comment

Links to this post:

Create a Link

<< Home

Terms of Use: The purpose of the Marin Real Estate Bubble weblog (located at URL http://marinrealestatebubble.blogspot.com/ and henceforth referred to as “MREB” or “this site”) is to present and discuss information relating to real estate and the real estate industry in general (locally, state-wide, nationally, and internationally) as it pertains to the thesis that recent real estate related activity is properly characterized as a “speculative mania” or a “bubble”. MREB is a non-profit, community site that depends on community participation and feedback. While MREB administrators do strive to confirm all information presented here and qualify all doubtful items, the information presented at MREB is neither definitive nor should it be construed as professional advice. All information published on MREB is provided “as is” without warranty of any kind and the administrators of this site shall not be liable for any direct or indirect damages arising out of use of this site. This site is moderated by MREB administrators and the MREB administrators reserve the right to edit, remove, or refuse postings that are off-topic, defamatory, libelous, offensive, or otherwise deemed inappropriate by MREB administrators. You should consult a finance professional before making any decisions based on information found on this site.

The contributors to this site may, from time to time, hold short (or long) positions in mentioned and related companies.