The Housing Market Is Hanging On By A Thread Signals High End Real Estate

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Old Jul 19, 2016, 8:12am   #1
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The Housing Market Is Hanging On By A Thread Signals High End Real Estate

The housing market is hanging on by a thread. The thread that is holding it up? Super low interest rates. This is keeping the real estate market floating but significant weakness in high end housing spells trouble. While many areas across the United States are showing increases in housing prices, this is mostly in middle to low end housing. Once you move north of $1+ million, demand has cratered. Why? The upper income buyers have too many questions about the future of housing in relation to the domestic and global economy. In many areas, housing has jumped dramatically from the 2010-12 lows, some places it is approaching the highs from 2007. The wealthy tend to be more housing savvy in regards to finding a good deal. They are also the buyers who use all cash, meaning they are less likely to care about interest rates being a historic lows. The high end real estate buyers are more likely to follow the global news and realize Europe is a mess, Brexit may have a long lasting impact and the United States election in November could have major consequences. Canadian buyers have also left the high end United States markets because of the collapse in oil from over $100 per barrel. While it has recovered somewhat, they are not yet inching back into the market.

Ultimately, high end real estate weakness may be a signal of a downturn in all of housing. Smart money is usually the first to leave the market. The scariest of all is what will happen if interest rates rise even a tiny bit. Look for a major slow down to spread from $1+ million housing into all of housing.Click the image to open in full size.

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Old Aug 8, 2016, 6:31am   #2
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How are we going to survive, i read recently that home prices in U.S. increased 5% this May
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Old Aug 8, 2016, 8:20am   #3
 
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Donít worry, be happy.

Donít panic! If the housing market crashes the super genius Central Bankers will lower interest rates, print money and save it, again...then, if the housing market crashes again after that, the super genius Central Bankers have another tool in their kit, they will even more lower interest rates and print more money and save it, again...and if the pesky housing market crashes after that, donít worry, the super genius Central Bankers will even much more lower interest rates and print even much more money and save it again...Nothing is a problem thanks to our genius Central Bankers and their fiat money!
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Old Aug 8, 2016, 11:37am   #4
 
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Perhaps in UK if house prices crash it will give an opportunity to some of those who currently can't afford to buy a house? As far as I can see, there is a selfish proportion of those already on the housing ladder who can only see positivity to ever increasing house prices. A potential revolution indeed Ė and all of this despite the amazing genius of our bankers!

But I hold little hope Ė there will always be a shortage of houses(and therefore unaffordability) where people need to live and work e.g. London.
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Old Aug 8, 2016, 3:10pm   #5
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jees the property market is so damn simple why does everyone make it complicated ?

here we go - property 101


DEMAND / SUPPLY
CREDIT AVAILABILITY/RATES


next subject please ?....I wish trading was as simple .......

N
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Old Aug 8, 2016, 5:52pm   #6
 
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Quote:
Originally Posted by NVP View Post
jees the property market is so damn simple why does everyone make it complicated ?

here we go - property 101


DEMAND / SUPPLY
CREDIT AVAILABILITY/RATES


next subject please ?....I wish trading was as simple .......

N
You've completely missed the point...
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Old Aug 8, 2016, 7:56pm   #7
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I think the housing market is only going to get worse in terms of prices. Population growth and people living longer will continue to pressure demand. Added to this is availability of land and how fast builders deliver new supply. In my opinion, which is based on the evidence, the days of boom and bust doesn't apply globally anymore. Sure there will always be the high end market where the greatest fluctuations take place but it won't affect the rest of the market as much. Take London as an example, the high end market has taken a hit but the rest has either increased or unchanged.
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Old Aug 9, 2016, 7:55am   #8
 
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It is different this time.

Quote:
Originally Posted by forker View Post
In my opinion, which is based on the evidence, the days of boom and bust doesn't apply globally anymore.


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