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With existing home prices now +10% year-on-year, some worry Fed-induced low interest rates are...

With existing home prices now +10% year-on-year, some worry Fed-induced low interest rates are giving the housing market a sugar high. But with the threat of higher interest rates on the horizon, buyers may continue to step in and buy now before homes become even more expensive.
Comments (15)
  • A sugar high?? You have to be kidding...call me when the Median existing home price to median family income ratio gets above 3.2...Median existing home price is 173,600...median family income
    (est.for 2012) is 61,700..173,600/61700 = 2.81....Now in 2006 your median existing home price was 221,900 and median family income
    was 58,400...221,900/58400 = 3.80...that is a sugar high...
    7 Apr 2013, 04:09 PM Reply Like
  • great stuff. thank you for the view as always bbro
    7 Apr 2013, 04:57 PM Reply Like
  • Since Obama, the average median family income is down about $4K.

     

    And the average, Union, tenured public school teacher?

     

    Okay......
    8 Apr 2013, 05:54 AM Reply Like
  • And, Property taxes?

     

    By me the average property taxes have risen 50% in the last eight years, while the average sheeple income is flat.

     

    The school teachers Union, thank you for the "Shovel Ready" $800B stimulus that cost nearly as much as the Iraq war.

     

    The Debt,

     

    It's all for the children ya know.
    8 Apr 2013, 05:54 AM Reply Like
  • 2012 election is over...moving on...
    8 Apr 2013, 07:04 AM Reply Like
  • BBRO,

     

    And the 50 yr historical average is........?

     

    Median "family" imcome?

     

    Does that include Jr.'s $8 an our job at WMT?

     

    Maybe grandma should go back to work and juice the number too.
    8 Apr 2013, 09:03 AM Reply Like
  • Provided Jr. is 15 or over, then yes, his income would be included in the median household income calculation. Grandma's would, too, if she'd get her lazy butt out and work. ;)
    8 Apr 2013, 04:45 PM Reply Like
  • Excellent ratio bbro.
    7 Apr 2013, 04:12 PM Reply Like
  • Here's one way to exploit a housing recovery:

     

    http://seekingalpha.co...
    7 Apr 2013, 04:18 PM Reply Like
  • Recent stats show 38% of purchases made in cash. Are low rates are giving those folks "sugar highs," too?
    7 Apr 2013, 05:36 PM Reply Like
  • Great.

     

    Housing a speculative asset class.

     

    How'd that work out last time?

     

    At least this time, it might not blow up the banks.

     

    But the Banksters got record bonuses in 2009, so I guess it never really matters anyway.
    7 Apr 2013, 10:11 PM Reply Like
  • This time is may only blow up the hedge funds and private equity companies. ;)
    8 Apr 2013, 01:57 AM Reply Like
  • The cash purchases are attributable to hedge fund buying....they pay cash with 10:1 leveraged funds....so it is not really a 'cash' purchase in every sense, it's just that the leverage is not with the seller, nor is a bank directly involved.
    7 Apr 2013, 07:25 PM Reply Like
  • Hedge funds don't buy individual homes. The cash buyers are individual investors that are looking for yield and inflation protection.
    7 Apr 2013, 08:18 PM Reply Like
  • Clutch - you seem to have completely missed this trend. It is indeed happening, and said hedge funds are quite price insensitive, driving pricing along with sales.

     

    There's even REITs popping up focused exclusively on SFR houses.

     

    Further, I do agree it is heavily "investors" because the percentage of the population with savings, income, and credit to purchase homes has fallen and underwriting has simultaneously gotten tougher. These details do not reflect either a healthy economy or a healthy housing market.
    7 Apr 2013, 08:32 PM Reply Like
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