Only an idot would buy in NYC right now.

evnyc, i'd sort of wonder about growth? people thinking about new ideas? if they don't exist at all, we're fucked.

Interesting thing about the Street Easy renters predicting Real Estate apocalypse. While they wait around 5-10 years to be right, many are living in places they admit to not to liking. Cramped kitchens, lack of laundry facilities , brown water, uncertainty of lease renewal. List goes on.

Niels Bohr was always great for quotes.

confucious said: life is a long, gradual, upward-sloping line, with many peaks and troughs along the way. spend your life obsessing about where to get on, and risk missing the train. learn to embrace the ride and the volatility, and live long and prosper! :o)

and p.s.: just don't leverage too much.

You don't need to know the future to know when the current yield on your money is poor. Further one knows that low yields are historically associated with poor appreciation. That's all that's going on here.

Rhino: some people are unable to predict the present.

Mhillqt, when I thought you'd actually contracted to buy that place, I told you the shit you wanted to hear. The stuff it's polite to tell people in that position.

But since you didn't pull the trigger, and need to feel better, go to www.millersamuel.com (for instance) and look at all those charts. Think about what possible reason there could be for current prices to not drop further.

The only reason I can think of is that there's been a fundamental change in mindset over the past 20 years. I.e., we actually have come to believe that that apartment (typical as they come) is the best we can do on your kind of income. We all know we have to pay more in NY for what we get, but not that much more.

There we go again
w67thstreet
Mhillqt. You are like the guy who goes to a whore house and wonders why he got crabs.

doggie talking about whore houses and venereal diseases.

AR, certainly new ideas continue to come along; this era has no monopoly on them. The only thing I question how much we're capable of predicting them. So here, I'll make a prediction about the future: there will be change, and we won't know what it's going to look like, but our fears and hopes will frequently look absurd in hindsight. We're all feeling our way.

Is that better? I am not a tremendous fan of sci-fi, but it's always kind of an interesting experiment to go back to the classics and see what came true and how much - usually very much the majority - wound up being excessively fearful or hopeful expressions of the time period. Always historicize! Unfortunately that perspective is useless at times.

Mhillqt: I am an owner, and I got back in the market in '06 after cashing out of my debt-ridden co-op. I get the psychological need to own, and I am not even that upset about losing out on better deals in the last 3 years. But one thing I know about RE: there's always another apt out there where you would be perfectly happy at more or less the same price point given current market conditions.

Seriously, patience!

And mill: just to make you feel better, had I waited 3 years to get back in the market I could have bought almost 2x the space for 10% more in the same location. On the other hand, I got to live in a fully renovated space for 3 years. But at every point in the market, there were always "deals" relative to the market to be had and now is an especially propitious time for deals. Not to mention your sweet RS pad - save your bucks, go on some fancy vacations and breathe.

AR, not to boast, but I said that first.

there are some SERIOUSLY deranged people on this board.....apt i looked at was 2004 pricing...not 2007.....and i would never listen to folks who post comments that are as derogotory as the ones posted on this board......anyone that posts like that is obviously not a professional or and doesnt have an ounce of class and probably has NO money as well......

tromp, boast away.

evnyc, yes, and here's to hoping that it's the fears that are deemed ridiculous.
it's just so hard to envision, we've siphoned so much talent away from math and science into finance. will some balance be had, and does opportunity arise out of negative situations, of course. and i'm always spouting off that we need a new bell labs, or nasa, or whatever the hell it is that will take us up. but it's rather indisputable that most of the countries most capable and ready to find that new opportunity can't, or believe they can't, finance the development of it. we'll come out of this eventually, and hopefully we won't be too interesting a case in the history books.

there are some SERIOUSLY deranged people on this board

true. it's also amazing how many disguise pessimism as realism
Street Easy should also employ a language filter. Too many posters get off posting with expletives.

what needs filtering most is your windy political garbage and general redbaiting

that's why your nicknme is REDBAITER!!

Bottom's up!
Sept. 22 (Bloomberg) -- The U.S. Securities and Exchange
Commission will press its case that Bank of America Corp. misled
investors, and said additional claims may be added, after a
judge rejected a $33 million settlement with the company.
“We will vigorously pursue our charges against Bank of
America and take steps to prove our case in court,” the agency
said yesterday in a statement, a week after U.S. District Judge
Jed Rakoff set trial for February. The SEC said it will use the
pretrial process to obtain information and “determine whether
to seek the court’s permission to bring additional charges.”

The guy admits to being a devils advocate, which implicitly means rile people up. Then complains about the language. Yes, and the bears windy philosphical bs is lame filler.

Lets also define what it is to be a bear for a moment. A bear is simply not seeing appropriate risk reward. This is no claimed guarantee for the future. Returns from a 3.5% cap rate - falling rent market...Not likely to be great. Early, when I compared to peak that was just a frame of reference. Arguably at a high price, with higher, rising rents there was at least a momentum argument at peak. At the same valuation vs rents, in a falling rent market with tighter financing...WTF....excuse my language.

Hello, all! I have been reading the posts for a few months and just could not help writting this time. It amuses me to see so many passionate posters debating what they cannot know. What is the benefit of passionately defending a bear market or a bull market? Wouldn't it be better to just try to understand what things really are so that we could all make the right decisions?

So many weak arguments on both sides for the sake of winning the discussion. Let's exchange facts, logic, advice. No need for name calling or disproportionate non-fact-based discussions.

All the best to all.

30yrs_RE_20_in_REO

"Niels Bohr was always great for quotes."

As was Wolfgang Pauli:

"Not only is it not right, it's not even wrong".

(from wikipedia: "...his most severe criticism, which he reserved for theories or theses so unclearly presented as to be untestable or unevaluatable, and thus not properly belonging within the realm of science, even though posing as such. They were worse than wrong because they could not be proven wrong.")

Can anyone link a chart that shows:

1. Unemployment going up and real estate prices going up?
2. Unemployment above 8% and real estate prices going up?

I'm not saying these charts don't exist, but I'd be curious to see any that do.

There was a great play called Copenhagen by Michael Frayn, based around an event that occurred in Copenhagen in 1941, a meeting between the physicists Niels Bohr and Werner Heisenberg...

And yes, people are overly passionate about what price real estate should be today or five years. Not sure if this is opinion searching for fact or posters confusing intrinsic value with market price.

Passionate? Damn f'ing right I am passionate about NYC re. In case noone told you posterboy146, we just passed the single greatest nycre asset bubbble in 2007-2008. We are in 2009 and people are buying like lemmings. Like a unicorn that leads to the path of financial happiness, I be your cussing m'king unicorn. Now grab my tail and let's GO!

Fact is, not one of you has any idea where the market is headed because we have never, ever been in this particular financial matrix as a country. The banks have not experienced this kind of shock followed by a govt takeover/bailout. Debt is humongous and still coming. Plus the Taliban are on the rise again and we know what great fans they are of NYC real estate. NO ONE KNOWS.

That said, I'll take my cue from Richard LeFrak -- who is hugely vested in NYC residential real estate--- trying to lobby congress to give green cards to apt. buyers. He clearly does not believe the current populace can sop up the over supply. That is my blood in the streets. I have been looking to buy but I think most sellers are still delusional--unless you can catch a seriously distressed seller which is a maudlin undertaking. I will be a happy renter at least for another year.

LeFrak said that for the first time in 15 years they aren't building anywhere - they own buildable dirt in NYC and the burbs (and in LA). He said that they can't forecast increasing demand 2 years out so there's no need to put a shovel in the ground now. They'll sit on the dirt until things change.

What would it take to convince you morons than knowing real estate is expensive today, relative to rent, is not the same as claiming you can predict the future. Not buying expensive things is the way to avoid disasters. You may miss momentum (think 2004-2007 real estate or 1998 to 2000 stock market) but you will avoid disaster. BUYING REAL ESTATE TODAY IS RISKING DISASTER BASED ON THE VALUATION. Your bullshit musings about not knowing the future are of no use to you or anyone else.

What would it take to convince you morons than knowing real estate is expensive today
I would be very surprised if the majority in any time period thought it was cheap.

Even in the go-go days, they just thought they would flip it to a sucker

I'm not talking about what was "thought". I am talking about what the history is of value relative to rent on all metrics. Now we see where this disconnect is. Most bulls on this board have very little sense of valuation history. Who cares what people thought?

Rhino, you've built a model in your head. And your model is flashing , "Don't buy". This is no different than a stock market buy/sell signal.

And we know how accurate those models are...

Add to Rhino's list:

- Demonstrably unprecendented and unsupportable peak bubble prices
- Unemployment at 18 year high and rising
- tens of thousands of lost high-paying finance/law jobs
- Restricted lending
- Massive oversupply of new development
- Economic uncertainty
- strong historical RE price trends/timing vs recession recovery

Does the probability of something happening need to be 100% for you people to think that it's even likely to happen? Not EVERYTHING is a 50/50 flip of a coin folks..."gee, it might go up, OR it might go down..so look, it's 50/50!..and nobody has a crystal ball..duh duh dum dee duh..."

How about predicting a highly likely future based on the facts at hand and historical precedent? And if you reject that, at least do nothing, i.e. DONT BUY NOW!

You only need to know that the economy is no where close to where it was in 2004 - especially in NY city. And if you try and tell a broker that you might be willing to pay 2004 prices they laugh at you. That is a tell of delusion. In the vernacular of W67 - which I am loathe to do unless, like here, it is appropriate --Brokers feed on lemmings and s**t unicorns.

Riversider, you are very basically not bright. Your analogy is terrible. There is nothing about cap rate and price to rent history that I created in my head. And the model that says dont buy stocks when the market is trading above 20x rent actually works pretty well. It avoids blowups, like I said.

Add to Rhino's list

Y'all may be right, but I do sense a great deal of group-think on Easy Street.

Riversider, I get the sense you dont read many books...but that you do read just enough of the Times to burp terms and throw weak analogies against the wall, without ever really taking a stance or attempting to make an actual point.

There is nothing about cap rate and price to rent history that I created..

I am talking about what the history is of value relative to rent on all metrics

The two statements are in conflict.

I invented the cap rate and price to rent history of apartments in Manhattan? Are you for fucking real? Pardon me while I invent the S&Ps P/E ratio history going back to the Depression.

Rhino's "price to rent history" is practically made up in his head. He makes wrong conclusions from second-tier data to create his "history."

Re: This is no different than a stock market buy/sell signal.

The real estate market is not the stock market.

invented the cap rate and price to rent history of apartments in Manhattan?

Relax, I don't mean literlly, but you clearly have an informal one , even if it's not committed to paper or computer.

Buy Stocks Because U.S. Dollars Will Be "Worthless," Says Faber. Says to buy assets and that one of few plays for U.S. citizen is real estate.

He refers to REITs that have gigantic yields when compared to residential real estate in Manhattan.

LICC, how do you boldface deny sourced graphs. Its like a disorder. On top, 30yrs backs the general gist of the history I've presented.

ieb: do you have the link for that statement. did he say where to buy re. do you think he would suggest NY re after an unprecedented bubble like rise that has still not come out of the market? Remember in 2008 when everyone said buy in FL for 30 cents on the dollar -- which had to be an absolute bottom. Until it went to 16 cents on the dollar in tony bal harbor. i would buy in FL now. But not NYC

Says to buy assets and that one of few plays for U.S. citizen is real estate

Faber is a smart guy. Income producing real estate like Farm Land? Certainly if the dollar continues tanking it makes Agricultural imports expensive. And we always have to eat.

Rhino, there are some true head in the sand kind of lemmings on this thread. They've been cluseless since I've been on this board. Where is my unicorn with the eye patch?

I can't believe that a post from anon3 has generated this much discussion.

http://finance.yahoo.com/tech-ticker/article/338419/Buy-Stocks-Because-U.S.-Dollars-Will-Be-%22Worthless%22-Says-Faber?tickers=fcx,gld,nem,chk,ng,xom,pfe&sec=topStories&pos=8&asset=&ccode=

yes, the comment is in video and not about nyc real estate but how does that matter? print money til it's worthless and what's left but asset classes?

When the foreigners who we owe money realize the currency is worthless, they'll look toward hard assets. Very hard to argue with the logic.

JuiceMan, the discussion is always the same regardless of the thread. And it is always the same people. It's such a waste of time. I also dont appreciate the curse words and name-calling. It would be most helpful if people debated using facts, not repetitive arguments wrapped up in curse words and unpoliteness. Who can stand Rhino taking every single argument personally? It is always the same regardless of what people say.

Rhino,

I do appreciate your efforts to make this discussion fact-based. Kudos on that. (I don't much appreciate it when you start calling people morons or not bright -- that's completely unnecessary -- but whatever works for you.)

Anyway, your prices vs. rents metric is interesting. I don't think anyone is discrediting that. But you've still got to explain WHY is 5% cap rate the right number?

If you look over long, long periods of time, rents GROW. Asset values grow too. Anybody who was around in the 60s, 70s, 80s knows this.

Rents may keep falling for awhile, and maybe prices are already 30% off the peak and still dropping. But that doesn't mean there won't be long term gains. Just to take a very simple example.

$6,000 rent, $1,500 maintenance, cap it a 4%, that's a $1.35 million apartment.

Assume over a 10-year period, rent-maintenance grows at 3% per year. Hold the cap rate at 4%. In 10 years, that same apartment is now worth over $1.81 million, with no change in cap rate.

AND- you've been making the 4% income over that 10 year period. You have both income and capital gains.

This is not a bad return at all in my estimation. And cap rates never touched 5% in this example.

What are long-term trends in NYC rents and prices over long periods of time? I'd be surprised if +3% is overly optimistic. I simply don't think it's true that the market has to price in 5% cap rates before real estate can be a good investment.

I've already disproved rhino's "price to rent history" and exposed his misapplication of his graph. I used primary source information unlike his second-tier data. Everyone who had seen the prior discussions agreed.

http://www.realestatechannel.com/news-assets/GraphC.jpg

Face the facts - NYC RE is going DOWN. Period. Goodbye.

1986-1992 - 6 years to the bottom

2006-2012 - 6 years to the bottom

Get it? Don't buy until 2012. See ya.

http://www.realestatechannel.com/news-assets/GraphC.jpg

What happened beween 1993 and 2001?

"What happened beween 1993 and 2001?"

What's your point, exactly? You were going from a 11.5% cap rate in 1992 as a base; today its about 5%. Credit is MUCH TIGHTER today than it was in the 90s. Completely different scenario. You're in denial, dude.

Bottom line - there's no point in buying in Manhattan until prices stop collapsing. Why step in front of a freight train and get run over??? And pay transaction costs for the privilege of doing so. That would be...um, really dumb.

BS is comparing the worst period of high crime in NYC (early 90s) in a century to now. How can you think that 1992 should be the basis for a good real estate market?

"http://www.realestatechannel.com/news-assets/GraphC.jpg

Face the facts - NYC RE is going DOWN. Period. Goodbye."

I posted this graph a while back. People appreciate it and gave examples from their own purchase histories in the 1990s that jived with the picture painted. LICC still insists I "made it up in my head". What is the right response other than, LICC you are a fucking moron?

PS: BS exposer, the Manhattan decline didn't begin arguably until summer 2008.

PPS: I never said 5% is right... I said its a start to even consider. It is based on the fact we actually sow 5% at a time before the credit bubble started. Numbers below 5% came out of the credit bubble.

Class dismissed.

I said it was the BASE (not basis) for a bull market in RE. You see, most bull markets start from a LOW, not a HIGH. Get it?

BTW, the ONLY data point at the moment favoring buying is low interest rates. So if you can lock in a conforming loan at 5% for 30 years, might buy if you can successfully low ball an already distressed ask. Otherwise, forget it.

So rhino bases his analysis on misapplying a second-tier graph and some comments from streeteasy bears. What a joke. I disproved his whole analysis with primary source data and he just can't handle how his mistakes were thrown in his face.

Re: What happened beween 1993 and 2001?

the music started to really suck

LIC - you can "disprove" anything you want - doesn't change the law of supply and demand [demand down, supply up = prices down]. Prices are going DOWN for the next few years. Just accept reality.

West34 - Kurt Cobain died in 1994 - coincidence? I think not. Although the Foo Fighters have done an admirable job trying to keep things good since then.

I've noticed, though, that following 2001 the force of gravity got a lot stronger.

LICC you are braindead. No one agreed with you. You are literally making that up. You are a noted idiot on this board. Second tier is a meaningless phrase. You found two different sources from two different articles at two different dates and created your own ratio. The most obvious problem with that is there is no telling the rent source matches the same apartment to the price source. The bigger picture is, why you need to deny that price to rent ratios hit single digits and cap rates hit double digits in the 1990s? Its still not clear to me what your interest is in denying that happened. Person after person told their story and it all pretty much jived.

BS -> I have much less problem with LICC disagreeing with our predictions then I do him calling me a liar and denying historical fact... That's just deranged.

If I bought wildy overpriced property during the peak of The Great Real Estate Bubble in a strange horrible pit of an area that most folks only see from a safe distance when they leave Manhattan for La Guardia Airport, I'd be clinging to a few pathetic bromides as well.

Great chart, Rhino. Scary.

Thanks.

The one thing that bothers me with historical charts is that they’re HISTORICAL! I don’t think that anyone here can deny that we’re in UNCHARTED territory. The way that I see it is:

Deflation + unrestrained printing of money = temporary illusion of normalcy.

kind of how you feel full after leaving a Chinese restaurant. Buying an asset like real estate is the best protection and the only question is when and how often to pull the trigger. When you have to trade you 10000 bill for a one dollar bill you might feel good about holding real estate.

"Buying an asset like real estate is the best protection"

Not if it's overpriced. Why not buy an UNDERPRICED security instead? Or buy UNDERPRICED real estate elsewhere in the country, where prices have almost bottomed. NYC has a long way to drop - we're only in the 3rd inning of that implosion.

BS 0 Duhh .- why state the obvious

""What happened beween 1993 and 2001?"

I actually meant 1997 to 2001.

Greenspan, repeal of G-S, Citigroup purchase of Travelers (1998), etc., etc., etc.

JM - it's over - I'm sorry for your loss. You can argue all you want - you know the reality - IT'S OVER.

"it's just so hard to envision, we've siphoned so much talent away from math and science into finance. will some balance be had, and does opportunity arise out of negative situations, of course. and i'm always spouting off that we need a new bell labs, or nasa, or whatever the hell it is that will take us up."

Wow, I thought I was the only one paying attention to this. I remember some talking head saying that if we didn't allow the Wall St firms to give big bonuses there would be a "brain drain" away from Wall St. What i immediately thought was "the thing which caused a lot of this country's problems has been a decades long (meaning multiple decades of it) brain drain BY Wall St. When I was at Cornell Engineering, there were TONS of foreign students. the VAST majority of them went back to their home countries and practiced in the field what they learned at Cornell Engineering. A bunch of the best graduates went to Bell Labs. But rather than going to manufacturing firms, a lot of the other American students went to Arthur Andersen (as I did), Booze Allen, McKinsey and Wall St firms. i know this was the same in the Math and Science departments as well. So while other countries had their best and brightest going into producing things, we had our best and brightest becoming virtual bookies, being teh best at setting the odds on stuff in their fields. Hell, when guys for the fucking Agriculture school went to Wall Street to become futures analysts rather than do anything which might actually help GROW STUFF, WTF do you expect is going to happen to our economy in the long run (unless you're a Keynesian, in which case you don't care).

"As was Wolfgang Pauli:

"Not only is it not right, it's not even wrong".

(from wikipedia: "...his most severe criticism, which he reserved for theories or theses so unclearly presented as to be untestable or unevaluatable, and thus not properly belonging within the realm of science, even though posing as such. They were worse than wrong because they could not be proven wrong.")"

Perhaps they had just heard Bohr tell them:

"Never express yourself more clearly than you are able to think."

"There was a great play called Copenhagen by Michael Frayn, based around an event that occurred in Copenhagen in 1941, a meeting between the physicists Niels Bohr and Werner Heisenberg..."

Let me guess: the stage directions have Heisenberg constantly talking to Bohr but facing somewhere that Bohr wasn't at.

"Sept. 22 (Bloomberg) -- The U.S. Securities and Exchange
Commission will press its case that Bank of America Corp. misled
investors, and said additional claims may be added, after a
judge rejected a $33 million settlement with the company.
“We will vigorously pursue our charges against Bank of
America and take steps to prove our case in court,” the agency
said yesterday in a statement, a week after U.S. District Judge
Jed Rakoff set trial for February. The SEC said it will use the
pretrial process to obtain information and “determine whether
to seek the court’s permission to bring additional charges.”"

Look, this was the Judge rejecting the settlement which the SEC fucking agreed to. So what do you think they are going to do now? Go after them for $25 billion instead? The settlement was for $33 million. Let's say they end up with TRIPLE that amount. That's $100 million. And that has exactly what effect on the economy? The top 5 B of A execs get a 30% decrease in their bonuses this year?

They'll go after individuals. Saying the company is guilty of wronging shareholders and then sticking shareholders with the fine is absurd. Good for Judge Rakoff!

"What happened beween 1993 and 2001?"

I actually meant 1997 to 2001.

The seeds were planted....

Not if it's overpriced.

What if cash is over-priced?

"JM - it's over - I'm sorry for your loss. You can argue all you want - you know the reality - IT'S OVER."

What are you sorry for? What did I lose? What's over? Are you on drugs BSex?

Riversider translation: I read the NY Times, so I know the US dollar has been falling. Allow me make a provactive statement that I don't fully understand.

Reality check: If we experience inflation, interest rates will rise, overwhelming the impact on real estate values from rising rents. See 1999 as an example - a strong rental market, higher interest rates, much lower price to rent ratios / higher cap rates.

Discuss.

PS: Cue LICC to deny that price to rent ratios were lower and cap rates were much higher in 1999.

in 1999 banks were hiring people like crazy. completely different scenario than today. thats why you see falling rents and for sale prices today.

forget cap rates, price to rent ratios...its all pretty much meaningless in this environment. stick to the basics...until suplly = demand, prices keep falling

30yrs -- Riversider does in fact read the NYT - the judge wants actual heads to roll -- he's looking for individual charges against the execs AND the lawyers and he's the not buying the attorney client privilege line one bit. basically judge to SEC "go back and do your fucking jobs you idiots"

rhino, the thing is that argument goes both ways. for people who are desperate to own a home (and they still exist) and who need significant mortgages, the increase (IF sudden and large) in interest rates would kill any possibility of home ownership. the gov't and the media play on this fear every day.

there is no evidence that there will be a sudden and/or large increase in interest rates in the near term. medium term if you'd like to buy but need a mortgage it would serve you well to pay quite a bit of attention, but we are nowhere yet near the inflationary 80s requiring huge increases in rates.

if you have inflationary pressure but it doesn't show up in housing prices, which is extremely likely as the demand seems extraordinarily weak, then you will do better buying later, and that advantage increases obviously with the percentage of cash you can put down. there is a reason why investors swoop in once interest rates go through the roof and prices crash.

west34, i love judge rakoff's opinion. i may have even linked to the pdf, i certainly had it.

that's not the point.

I provided documented evidence of general Manhattan market prices and rents, the primary information. Rhino shows a second-tier chart and three comments from bears on a streeteasy board.

rhino, everyone here knows that when someone provides information that shows you are wrong, all you do is hurl insults at that person. You are useless.

Reality check: If we experience inflation, interest rates will rise,

So wouldn't paying a 6% loan in a 10% interest rate environment(you pick your numbers) be a good thing?

Reality check: If we experience inflation, interest rates will rise,

So wouldn't paying a 6% loan in a 10% interest rate environment(you pick your numbers) be a good thing?

say it as many times as you like, you're still a liar.

Rhino, that graph is a sobering one. I did not appreciate how much higher cap rates were doing those earlier periods (assuming the data is accurate).

It would be interesting if someone could find a way to plot mortgage rates or treasury yields on the same chart. The correlation to cap rates has got to be very high. For borrowers who can get mortgages, rates are very low right now. 30-year fixed keeps going down. This is going to provide some support to multiples and keep cap rates low, all else equal, as long as this interest rate environment lasts.

Also, if inflation and rates start to rise, that's usually a sign that the economy is heating up (i.e., more jobs, more growth). The Fed is not going to raise rates if we remain mired in recession.

It's all kind of circular, as you know. Cap rates and multiples are a product of their time, based on the particular economic circumstances of the time.

http://www.youtube.com/watch?v=qaK5pebdlXY&feature=related

sick and tired of you.

http://www.wackypackages.org/realproductsscans/bayer.jpg

BS, that is a fanstastical chart. and i think it can't be overstated that the bubble started in the second half of the 90s, not the first half of the 00s. real estate cycles tend to run 20 years. what this one will do, given the excess in credit and the later demographic effects of significant unemployment for a number of years and balance sheet repair, is hard to call.

i started out by saying 2012. as they continue to pump in monetary stimulus (btw, i don't know if that's entirely a good or bad thing, as we seemed doomed either way), it may delay the pain. which, i fear, is the absof'ng worst alternative.

Youd rather not have bought when rates are six when they go to ten because prices adjust down and the principal loss would be huge. This is one of the most common misperceptions about real estate. Buy when rates are high and falling. Sell when they are low and rising. When the economy improved the fed will tighten offsetting much of the demand impact of the recovery that allowed them to do so.

Macro demand always equals supply at the market price. Be precise.

rhino, yes and no. that only works for a certain subset of buyers. there are many who would give up the discount to get the rate, and due to their cash abilities that's what they perceive they need.

if you have a lot of cash, the game is very, very different.

The nominal price of real estate didn't crash the last time rates sky-rocketed(70's). It was only in real terms that they didn't fare that well, and if you are paying for the purchase with inflation dollars( a hedge).

I did this from memory, so feel free to counter.

rhino, we agree on many levels, but the "macro demand always equals supply at the market price. Be precise."

really. what were you thinking?