"The relative cost of owning versus renting is swinging back in favor of homeownership in some US markets, buoyed by several quarters of sharp declines in home prices. ... Now, after two years of rapid home-price depreciation, the relartionship between the cost of rental payments versus after-tax mortgage payments is tilting toward ownership in a number of metropolitan areas. ... A separate report by Moody's Economy.com also finds that home prices relative to rents are more in line with their historical relationship", Nick Timiraos at the WSJ, 25 February 2009.
Real estate prices may be bottoming in a number of areas.
4 comments:
Yes IA... a friend of a friend who is a real estate agent said she had three contracts for sale... two for cash... cash buyers... that's real confidence...
Cash is foreign dollars.
Look for the boom in RE to be fueled by reverse dollar flows. Those folks know that Ts stand for trash. They want real assets for paper.
The only folks in the past that paid cash were dealers and Japanese investors (80s). Today it si Chinese investors. I have a personal example of a Chinese investor who could speak no English buying an orchard. Cashola. FHA/Fannie/Freddie could not be the source of leverage.
Got to repatriate WalMart scrip.
Excellent Printfaster... line of the day...
"Got to repatriate WalMart scrip"
Bottoming is only a good sign of getting out of this crisis soon. Soon enough market will be flooded with buyers wanting to take advantage of the cheap prices. Good thing is, banks won't hand out loans that easily now.
Take care, Julie
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