I am truly amazed by the strength of our domestic housing market. Almost every investment guru has predicted softening or pullback in the last couple of years. Including yours truly.
But on it goes… up, up and away!
Recent Commerce Department comments reveal that a “larger than expected” number of homes being built were started in December 2003. Like a cherry on top, the news capped off the best year for new housing in 25 years.
Millions of people have suffered job losses and many more lurk under the shadow, but it seems America has an ample supply of people willing to buy new homes and refinance existing ones.
What happens when interest rates start to climb? I have to wonder.
Everything looks rosy at the lowest mortgage rates in forty years, but drive them up to six or seven percent and we will see a certain substance hit the proverbial fan.
Why? Because people are overextending themselves and ending up bankrupt in record amounts at this point in time. And that’s at low rates. I can’t see it improving when rates climb… because they will. It is, after all, just a matter of when. And how high.
Makes me think that tens of thousands of homes will end up on the bank auction block in the future. Perhaps
“power of sale” will replace the popularity of “jobless recovery.” Who knows?
Here at PROFIT CONFIDENTIAL, we are considering selling our homes and locking in some good profit. The money we lock in now could go towards buying two, maybe three, homes at fire-sale prices in the future. Power of sale indeed! We are ready. And willing.
But are we?
I seem to have forgotten something rather important. Where am I going to live meanwhile? Go back to giving my hard-earned money to some landlord? I don’t think so.
Gosh darn it&there had to be a catch. Damned if you do; damned if you don’t.