Reply to Why do expert say: Buckle in for a brutal free-fall in home prices

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Prices are going to continue to fall because of interest rates. It’s a mathematical certainty.

No one knows exactly how far they will fall, but the prices will fall.

You really want to look to economists regarding this, not realtors. A lot of people think realtors have strong, economic backgrounds, or that they are experts in predicting markets. They are not.  [/quote]

I wouldn't trust economists either. (Of course no one should trust real estate agents on this.) But so far prices are not "falling" in the sense that sales prices are markedly lower than last year. They just seem to be going up less and taking longer to sell, and maybe with the usual contingencies in place on the contracts. Maybe things will change next year. I hope so. But given the overall strength of the economy in this area and the lack of supply, I don't see a big decline absent a severe recession.[/quote]

Prices are going to go down because housing is an overvalued asset and the affordability is a huge issue that the Fed is determined to address. If prices don't come down through other pressures, the Fed will continue to increase rates until the bubble bursts. The Fed is trying to control inflation by devaluing overvalued assets, and housing is the most inflated sector of the economy. The Fed is determined to force a housing correction as a mechanism to control inflation in other sectors of the economy. It hasn't hit the tipping point yet, but it will. [/quote]

Well said. [/quote]

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