A realistic look at the real estate market today

It's a fact, historically low mortgage rates have, in a de facto sense, extended the first time home buyer credit. Also, the billions allocated to residential properties via extraordinary and unprecedented actions of large funds, distorts comparisons.

Plus, there is an increased use of HAMP/HARP, etc programs, as well as seniors using reverse mortgages to buy both primary residences, as well as investment properties. So, apples to apples is a bit more complicated.


Therefore, it is a given that median income has recently declined for the first time in the post-war era. The low mortgage rates probably mask a 'normal' real estate mortgage/purchase/qual... scenario-but it's anyone's guess as to how higher mortgage rates can be absorbed in a world confronted with higher property taxes, higher utility costs, insurance, etc. (given, as indicated, the inescapable issue of declining median income).

Please realize a reasonable bounce was anticipated. But what run rate is sustainable, and under what set of interest rate assumptions?

Is it possible that the folks having the means to buy a new house are taking advantage of low rates? There is pent-up demand in that group. But, as that set is played out-what next?

I don't have a clue.

So, in the housing market today, I know for sure is that the game has changed in a major way. If you've owned real estate from the late 1960's forward-you have to know that the world shifted in 2007. It's not the same anymore-not even close.