Interest Rates & House Prices

Foreclosures, Short Sales, Tax Foreclosures
1

Hey Guys,

So, im really perplexed by whats going on at this point… There are tons of houses on the market, but alot of the REOS / foreclosures are getting 3-4 offers above list price, so in essesnce there is a bidding war going on with regard to the middle family homes (200-220K range), but i still forsee prices dropping more and here is why…

The dollar is taking a beating (and has been for the last several years), and with all the worries in the US economy i believe we HAVE to see higher interest rates (30 yr fixed is 6.33% today) to stop investors from fleeing the dollar… Once interest rates rise, less people will be able to afford houses at these prices (am i mistaken here?) House prices go down with less buyers…

I mean the same houses selling for 200K now at 6% interest are going to be a tough sell at 10-18%… At higher rates barely any houses will be movable…

everyone is seeing bargains but i see trouble ahead and have a hard timing buying unless rent would cover the mortgage, even for a house that i would like to move in for myself and live in… But, these houses are getting bid up like it was 1999 all over again…

Thoughts? Alot of you guys are pretty deep into the market and i would like to hear some of your guys opinons…

Thanks,
Karim0028

2

Anybody? I cant possibly be the only one who has an opinion on this… If you feel im wrong please say so and give your reasons, im interested in getting some sort of debate going as the rates are beginning to rise and peoples income is either decreasing or staying the same while inflation is going up…

I see debate as a way to clarify misconceptions whether in my own head or others perceptions as well…

I would love to hear from folks who lived through the 80s & 90s with the S&L crisis as well (by lived, i mean folks who were actually old enough to remember repercussions such as house prices as interest rose and dollar weakend)

-Karim0028