Housing market/Finances

SunDancer · 12-06-2004, 01:20 PM

Being in Boston last week, and seeing the off-the-hook prices of homes/real estate, I am wondering if you think we'll see a housing bubble burst? Seems like we got alot more McMansions being built.

If so, what will happen? What happens to the finances and houses of the boomers moving towards retirement? I just found this discussion from our class today interesting.

Crapshoot · 12-06-2004, 01:32 PM

Yes. Bust. Liquidity = King.

digamma · 12-06-2004, 01:50 PM

The market has slowed recently.

For there to be a flat out bust, I think interest rates will need to rise significantly, preventing folks who went with ARM's and other variable interest rate mortgages from re-financing at an affordable rate at the end of their fixed period. If this happens, we could see more foreclosures and a drop in the market.

However, it may be more of a city by city basis than the across-the-board tank of the early 90s. In LA, for example, buyers still greatly outnumber sellers, despite the slowing market and the increasing prices.

12-06-2004, 01:32 PM	#2
Crapshoot Grizzled Veteran Join Date: Dec 2003	Yes. Bust. Liquidity = King.

12-06-2004, 01:50 PM	#3
digamma Torchbearer Join Date: Sep 2001 Location: On Lake Harriet	The market has slowed recently. For there to be a flat out bust, I think interest rates will need to rise significantly, preventing folks who went with ARM's and other variable interest rate mortgages from re-financing at an affordable rate at the end of their fixed period. If this happens, we could see more foreclosures and a drop in the market. However, it may be more of a city by city basis than the across-the-board tank of the early 90s. In LA, for example, buyers still greatly outnumber sellers, despite the slowing market and the increasing prices.

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