Comments on: Interest Rates vs. Purchase Price http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/ Tracking the Arcadia and San Gabriel Valley Housing Market Sun, 14 Mar 2010 11:29:49 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Lurker Lou http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/comment-page-1/#comment-223371 Lurker Lou Fri, 15 May 2009 04:50:08 +0000 http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/#comment-223371 At 5% interest cost I can borrow $325,000 to pay for a house for $1,750. At 10% interest my loan drops to $200,000 for the same $1,750. Unless there is extreme reduction in supply or demand is as high as those in the housing bubbles day I am afraid home price will rust in a low inflation and eventual hike in interest rate environment. Please share any other important forces and give us a measurable change if you think of any. At 5% interest cost I can borrow $325,000 to pay for a house for $1,750. At 10% interest my loan drops to $200,000 for the same $1,750. Unless there is extreme reduction in supply or demand is as high as those in the housing bubbles day I am afraid home price will rust in a low inflation and eventual hike in interest rate environment. Please share any other important forces and give us a measurable change if you think of any.

]]> By: Mortgage Interest Rate Perspective | San Mateo Real Estate - Call Vicki! http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/comment-page-1/#comment-13059 Mortgage Interest Rate Perspective | San Mateo Real Estate - Call Vicki! Thu, 11 Sep 2008 20:56:40 +0000 http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/#comment-13059 [...] says no: Historically interest rates have been largely irrelevant to the price of a house.   Arcadia Housing Blog says yes.  I say it proves one thing:  It depends on who you [...] [...] says no: Historically interest rates have been largely irrelevant to the price of a house.   Arcadia Housing Blog says yes.  I say it proves one thing:  It depends on who you [...]

]]> By: Creative Affordability http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/comment-page-1/#comment-1815 Creative Affordability Wed, 23 Apr 2008 16:57:05 +0000 http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/#comment-1815 [...] may have thought so, but take a look at these charts to get a real feel for how large an impact the purchase price actually has on affordability, when [...] [...] may have thought so, but take a look at these charts to get a real feel for how large an impact the purchase price actually has on affordability, when [...]

]]> By: gotforeclosure http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/comment-page-1/#comment-1813 gotforeclosure Wed, 23 Apr 2008 16:20:08 +0000 http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/#comment-1813 This is an excellent post - thank you! May I add one thing? The real estate market is different from the stock market in that (among other things) the "ask" price of one item for sale (i.e. stock vs. property) does not dictate the "market value" for all other same or similar items (for sale or not...). It is possible in real estate to buy a property BELOW market value. And there are more than one ways to do this. However, looking at MLS asking prices only, and thinking you'd have to *wait* until they drop to where you would consider buying, is certainly the "long way home". This is an excellent post – thank you! May I add one thing?

The real estate market is different from the stock market in that (among other things) the “ask” price of one item for sale (i.e. stock vs. property) does not dictate the “market value” for all other same or similar items (for sale or not…).

It is possible in real estate to buy a property BELOW market value. And there are more than one ways to do this. However, looking at MLS asking prices only, and thinking you’d have to *wait* until they drop to where you would consider buying, is certainly the “long way home”.

]]> By: SavedbyGrace http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/comment-page-1/#comment-84 SavedbyGrace Sun, 10 Feb 2008 05:15:36 +0000 http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/#comment-84 While the interest rate cuts may be good for homeowners who can qualify for a refinance (i.e. full doc income and not underwater), it's a confusing time for many potential buyers. I wrote this post because I ran across several such buyers just this week who were considering starting a home search "because interest rates are so low." It took me one minute to show them a mortgage calculator online and an additional 5 minutes for them to figure out it's still better to wait out the crash a bit longer. Knowledge is good. Knowledge + Patience is even better. While the interest rate cuts may be good for homeowners who can qualify for a refinance (i.e. full doc income and not underwater), it’s a confusing time for many potential buyers. I wrote this post because I ran across several such buyers just this week who were considering starting a home search “because interest rates are so low.”

It took me one minute to show them a mortgage calculator online and an additional 5 minutes for them to figure out it’s still better to wait out the crash a bit longer.

Knowledge is good.
Knowledge + Patience is even better.

]]> By: phantom600rr http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/comment-page-1/#comment-83 phantom600rr Sun, 10 Feb 2008 04:08:20 +0000 http://www.arcadiahousingblog.com/2008/02/09/interest-rates-vs-purchase-price/#comment-83 Great analysis, SavedbyGrace! I will keep a copy of this post to remind myself and others. Thank you. Great analysis, SavedbyGrace! I will keep a copy of this post to remind myself and others. Thank you.

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