Do you think housing prices will go down?

The fed to keep hiking?

Depends on the location. Some markets are still going up, others are staying even and some have dropped.

It depends on where you live. If your in places like FL, AZ, CA, then have and they will.

Yes. I think that there will be some further declines in house prices in some major markets during the next six months.

yes but not much...statistically speaking, in a population of a large city of half of million, there are 2500-3000 houses on the market....that means 2500-3000 families out of half a million population....usually 100,000 renters are wanting to buy when stable employment is achieved

I think in general there will be a market correction in housing prices. As others have mentioned, it is all about supply and demand and some areas will still have increasing home prices, but some of the hot spots of the past few years are seeing a drop in prices - as they should. There definitely won't be a "burst of a bubble" where we see rapid declines in home prices, but we will definitely see a correction over the next 2 years.

As far as the Fed is concerned, the jobs report just came out today, and showed the US economy created 128,000 new jobs last month. That is a little on the soft side, and that figure combined with other reports out there show the economy is slowing. There is a Fed meeting this month, and if the economic data coming in still shows a slowing economy, the Fed will not raise rates. The only reason the Fed raises rates is to combat inflation, and if they see the economy is growing at a slow steady pace, they will leave things alone.

it's all economics. supply and demand. if the demand (especially in a particular area) is strong, prices will stay strong regardless of the interest rates.

if demand is already weak in a particular area, and if interest rates climb, the demand will be even weaker causing prices to go down.

I agree with BrokenRomeo.

Good time to buy?

In most area of the U.S., housing price stopped going up as inventory continues to build up. It is normal to see a correction as a boom that lasted for several years.

If you are investing new money in to real estate, this may not be a good time as the potential return on investment is small compare to the high risk of lower home price.

If you are doing a side way move, meaning you are selling one to buy another one, then it is acceptable.

Nothing is absolute, but housing market is very likely undergoing a correction and this is only the beginning. Some say this would be a soft landing (0 to 10%). Some say a big crashing is coming (10 to 20%).

http://money.cnn.com/2006/08/24/news/economy/newhomes/index.htm
http://money.cnn.com/2006/08/23/news/economy/homesales/index.htm

They fluctuate a bit. When interest rates are low, it brings prices up some. And vice versa. MOstly they don't go down though. Everybody gotta live somewhere.

That depends intirely on where and when you purchased. I think there are definatly some areas that the cost homes was already overpriced and the economy pushed them higher. Those home values will likely go down temporarily but home values always seem to go up over time.

This month's figures prove that the so-called "housing bubble" is not only real, but that its cratering faster than anyone had realized. As the UK Guardian reported just yesterday, "the orderly housing slowdown predicted by the Federal Reserve will (soon) become a full-blown crash".

All the indicators are now pointing in the wrong direction. Consumer confidence is down, inventory is at a 10 year high, and the number of homes sold in July was 22% lower than last year. As Paul Ashworth, chief economist at Capital Economics said, "Things seem to be getting worse very quickly. Freefall is a strong word, but I think it's the right one to use here." (UK Guardian)

The housing bubble is a $10 trillion equity balloon that will explode sometime in 2007 when more than $1 trillion in no-interest, no down payment, adjustable-rate mortgages (ARMs) reset; setting the stage for massive home devaluation, foreclosures and unemployment. ("By some estimates housing activity has accounted for 40% of all the jobs created since 2001". Times Online) July's plunging sales are just the first sign of a major slowdown. The worst is yet to come.

The blame for this rapidly-approaching meltdown lies entirely with the Federal Reserve, the privately-owned collection of 10 central banks who cooked up a way to shift wealth from one class to another through low interest rates.

Sound crazy?

Well, just as high interest rates cause the economy to slow down; low interest rates have the exact opposite effect by stimulating the economy through increased spending. It's all pretty clear-cut.

When the stock market nose-dived in 2000 the Fed lowered rates 17 times to an unbelievable 1% to keep the economy sputtering-along while the Bush administration dragged the country to war, gave away $450 billion a year in tax cuts, and awarded zillions in no bid contracts to their friends in big business. All tolled, the Bush-handouts amounted to roughly $3 trillion dollars, the largest heist in history, and it was carried out under the nose of the snoozing American public.

At the same time, America's debts and deficits have continued to mushroom behind the smokescreen of low interest rates.

Rather than face the recession which should have followed stock market crash, the Fed chose to increase the money supply (which doubled in the last 7 years) and lower the qualifications for getting mortgages. (I read recently that 90% of first time home buyers not only lie on their mortgage applications, but that 50% of them say that they earn TWICE as much as they really do. The applications are not cross-checked with IRS statements) Now, tens of thousands of Americans live in $400,000 and $500,000 homes without a penny of equity in them and with loans that are timed to increase dramatically in 2007. (Many of the monthly payments will double)

So, how can we blame the Fed for the reckless and irresponsible behavior of the average homeowner?

Well, because they knew the effects of their "cheap money" policy every step of the way.

First of all, the Fed knew exactly where the money was going. Greenspan endorsed the shabby new lending-regime which put hundreds of billions of dollars in the hands of people who never should have qualified for mortgages. They were set up to fail just like the victims in the stock market scam who kept dumping their life savings in the NASDAQ when PE's were shooting through the stratosphere.

Secondly, the Fed knew that wages had actually regressed (2.3%) since Bush took office, so they knew that the soaring value of real estate was entirely predicated on debt not real wealth. In other words, home values increased because of the availability of cheap money which inevitably creates a buying-frenzy. It had nothing to do with real demand or growth in wages.

And, thirdly, according to the Fed's own figures, "the total amount of residential housing wealth in the US just about doubled between 1999 and 2006"up from $10.4 trillion to $20.4 trillion". Times Online.

UP $10 TRILLION IN 7 YEARS! That is the very definition of a humongous, economy-killing equity monster. In other words, the Fed knew the ACTUAL SIZE OF THE BUBBLE and chose to steer it towards the nearest iceberg without warning the public.

This is what Greenspan called "a little froth".

There is no real growth in the American economy. Figure it out. Last year Americans saved less than 0% of their net earnings while they borrowed a whopping $600 billion from their home equity to piss-away on a consumer spending-spree. Once home prices begin to retreat, that $600 billion will evaporate, real GDP will shrivel, and the economy will begin flat-lining. (Consumer spending is 70% of GDP)

The Federal Reserve's plan is so simple; we shouldn't dignify it by calling it a conspiracy. It's merely a matter of hypnotizing the masses with low interest rates while trillions of dollars of real wealth is diverted to corporate big-wigs and American plutocrats.

It might not be rocket science, but it worked like a charm.

Now, the trap-door has been sprung; the country is dead-broke and all the levers are in place for a police state. As the housing-balloon slowly limps towards earth, the new Halliburton detention centers are up and running, the National Guard is in Rummy's control, the Feds are able to listen-in on every phone call we make.

The noose is beginning to tighten.

New Orleans was just a dress rehearsal for the new world order; 300,000 million Americans reduced to grinding poverty while the economy explodes into sheets of flames.

They are going down right now. It is a buyers' market.

Currently there are 9 homes 4 sale for every one buyer.
Sounds like the price will be dropping to me.

down and hear is why

http://www.breakingbubble.com/index.htm

i don't think the fed will keep hiking rates been the economy seems steady and they are at pretty average rates, however inflation will continue to be an issue,

yes, I do believe that house prices will plummet some, too much atypical appreciation in the last four years, due to these interest only loans which many are only fixed for like ywo years and then the rate goes up, I think that a sea of houses could enter the market, I don' see more than a 10 percent drop though, i live 15 miles south of portland, ore, where are you?

jason

Seems like they are going down now.

There is one important point to remember about this: ALL REAL ESTATE IS LOCAL!! There is no national real estate market. This is unlike NASDAQ, or other stock exchanges. If a stock's price goes down in Poughkeepsie, NY it is also down in Pomona, CA. The price of a home in one locality has very little, if any, bearing on the price of another property located thousands of miles away.

Now, you asked for an opinion - yes, there are areas where prices have dramatically outstripped value, and prices will thus fall. But this will be temporary. Even if you buy at the top of an overheated market, if you can hold on to the property for several years you will not lose.

And - NO, in most areas prices will not decline. Simply put: "They're not making any more land."

If you carefully avoid paying the seller's usually inflated price, and make sure you are buying a well-built home that will not need extensive, expensive repairs, and buy into a safe area with good schools - you will be just fine. Your home will appreciate, and all the other values of home ownership will be yours to comfortably enjoy.

In Toronto, housing prices have gone through the roof!! The housing prices just keep going up!! Average price of a 3brm all brick bungalow is around 375 thousand dollars(depending on area maybe higher)

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