Real estate question
Since interest rates are dropping soon, it would be smart to buy in sf now where prices are dropping greatly and sell in a couple of years (1-3) when things recover. What are your thoughts ? Give a first principled reasoning please. My observations: - low interest rates -> less buyers -> prices drop and vice versa -sf has lay offs and high mortgages which is pushing people to sell to not lose their initial investments - interest rates seem like they will be dropping soon. #mortgage #housing #sanfrancisco
Generally, no. You don't appear to have information the market does not, and without it you are just gambling. To remember: you'll lose around 5% of the value in closing costs at sale, and there are other fees you'll pay on both sides of the transaction. Many of the homes in SF do _not_ have comparatively high mortgages: only those who bought very recently have those crazy numbers. Because of the lock-in with absurdly low mortgages and property taxes, that majority is very disincentivized to sell, keeping the inventory very low, even now. There may be specific opportunities, but unless you have a wealth of knowledge of RE and the market, you'll have to work hard to find those deals.
My closing costs are 1.61%
On the sell side or buy side?
Interest rates are not going down, idk why people keep repeating this lie, when it has been repeatedly proven false for nearly a year. Even if the fed rate was going down, it would already be priced in. Delusional
Do not buy real estate until you have an appreciation for location location location. And only buy something that will work for you for 10 years.
Why would rates go down when we have the lowest unemployment rates on history and the best economy ever?
Because the Fed literally said in December that they are cutting rates 3 times this year, and the market is expecting rate cuts to begin in June. The Fed’s dot plots literally show rates going down.
Mortgage rates are forward looking. It’s priced in
Personally I would not weight “potential increase in house price” in my decision to buy a house. I would base the decision strictly on the cost to buy vs rent. I would pay heed to the downside risk of prices dropping more, of layoffs, etc, and factor those things into my decision. I would not factor “prices are gonna go up and I’ll be rich!” into my decision at all.