01-04-2010, 04:18 AM
I dont agree with your optimism on real estate, I know its your business but, You have to ask where is all the money coming from that is going to fund the rebound? if prices rebound and get back to the 2005 prices soon watch out. Those are just nominal values and do not reflect reality, those are simply prices denominated in dollars. IF the nominal values of homes rebound, we will be in for a sticker shock every where you turn. The real estate market has not been cleared and the government is still intervening in the market preventing a clearing. you have people renegotiating the mortgages with the bank, i have seen the offer they are TERRIBLE. I have yet to see one that offered a principal reduction, instead they simply shuffle interest terms around to lower payments but still delay the inevitable.
Also this graph should scare the crap out of anyone
http://www.marketoracle.co.uk/images/200...serves.jpg
the fed is curently PAYING interest on reserves held in the fed. the bailout monies and others have been "given" to the banks and then placed on deposit at the fed, where they are GETTING PAID TO SIT THE MONEY.
What happens when the banks decide to release this into the market place?
Will interest rates rise? what will that do?
Also this graph should scare the crap out of anyone
http://www.marketoracle.co.uk/images/200...serves.jpg
the fed is curently PAYING interest on reserves held in the fed. the bailout monies and others have been "given" to the banks and then placed on deposit at the fed, where they are GETTING PAID TO SIT THE MONEY.
What happens when the banks decide to release this into the market place?
Will interest rates rise? what will that do?
quote:
Originally posted by John S. Rabi
I disagree with Kathy. The highest point of the real estate market was in November of 2005 and most people on the funny mortgages were locked in for three years, so we are past of the adjusting period. Those home owners either already have been foreclosed on or they already "survived." The REO properties will dry up and the real estate market will rebound after that.
If you bet on the stock market, go with the emerging markets, those stocks are the first ones to take off in a recovery.
Aloha,
John S. Rabi, GM,PB,ABR,CRB,CM,FHS
808.327.3185
johnrabi@johnrabi.com
http://www.JohnRabi.com
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