Predictions of House Prices for the future

Just wanted to know what you think of the prices of homes? Do you think they are going to continue to rise like they have for the past year or so, or do you think they are going to level out, or do you think they are going to drop significantly???

I think they are going to keep rising, until the house market is sooo saturated with homes for sale, and the only people that can afford them are the really rich or the really poor.

Scott

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I think they'll still continue to rise but at a slower rate.

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I think its going to pick up a bit, then start slowing down and sometime next year we will see the bursting of the bubble.

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I think that the prices are going to slow down if not level off.
I do not think they are going to continue to rise they way they have over the past year or two.
Condo's and Co-op's might continue to increase slightly.

What i do think is going to happen in that interest rates will start to increase!!!

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I definitely don't think they will drop significantly.
Might just level off or decrease the rate of increase.

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I've been told by people who have made a LOT of money in RE that we will see a burst in 18 months.............

But I take that with a grain of salt - no one can predict the RE market.

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I have been told many different things by many different people...and I dont understand how anyone can forsee what will happen in the future.

Danielle wants to wait now to buy a house, but I am worried that we will not be able to afford anything in a year or 2. Everyone I know is saying that you should buy now and not wait.

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No one can predict the future on any markets whether it be stock or real estate. However, they both move in cycles and I believe we are at the top of the real estate cycle and can expect a 5-20% drop in home prices. The 5% being for the low end real estate, 20% for high end real estate – homes that are 1 million +.

I do see a drop in the near future of about 18 months to 2 years. The reasoning for my impression a few things:

When the Fed Chairman uses the same exact verbiage for the housing market that he did in 1998/9 tech bubble for the real estate market today – it has to make you think.

Also, most mortgages taken out for 1st time home buyers or 1st mortgages in the last 12 months (over 60% of mortgages) in the high end markets like Long Island, NYC and parts of California are adjustable rate mortgages (not arms) and interest only mortgages. This leads one to conclude that the reason for these mortgages are affordability issues since they wouldn’t be able to afford a fixed mortgage payment. The traditional use of such mortgages is for property developers and real estate investors in the likes of Trump.

The mean income doesn’t support the mean home prices with property tax. As interest rates increase, the homeowners with adjustable and interest only mortgage payments won’t be able to afford the increased payments plus property tax. This will lead to defaults hence driving down the market.

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Message edited 6/20/2005 12:40:29 PM.

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If you can somehow afford a house - buy it now.

Dont stress too much over every penny - the rates are low - and if the prices fall...it doesn't matter - as long as you are not selling (and you have a fixed rate mortgage).

Over the long term the prices are ALWAYS going to go up. I have been told by a lot of experts that the hardest part of the market is getting in - but once you are in - you have a lot more options.

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I don't know what's going to happen, but I can tell you values on LI are continually INCREASING at a steady rate. I see it EVERYDAY - we're appraising houses for much more than I would have given the same house a few months ago.

This has been going on for 5 years (not just the last year or two - houses went up 15-20% year since 2000), and every year we hear THIS is the top of the market. I agree, we have to hit the top eventually but I'm not sure this is it and I'm not sure the bubble will burst. In other parts of the country it makes sense, but the demand will always be there on LI...

There are a TON of houses for sale, but unless people are leaving LI in droves, the same people that are selling have to buy, and then there's all the first time home buyers, new transplants, etc.

If I were you (and I was you last year), I'd buy sooner rather than later.

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Long Island Fast Facts

*Median Household Income:
Nassau County - $72,030
Suffolk County - $65,288
Queens County - $42,439
Brooklyn / Kings County - $32,135

*Population:
Nassau County - 1,340,000
Suffolk County - 1,440,000
Queens County - 2,224,000
Brooklyn / Kings County - 2,465,286

*Home Ownership Rate:
Nassau County - 80.3%
Suffolk County - 79.8%
Queens County - 42.8%
Brooklyn / Kings County - 27.1%

**2004 Average price of a home:
Nassau County - $541,443; +12.9% over 2003
Suffolk County - $402,373; +12.7% over 2003
Queens County - $376,670; +12.5% over 2003
Note: Housing Information for Brooklyn / Kings County not available.

Here are some housing statistics for 2004.

The best way to judge the housing market - look at how long houses are sitting for sale. The seller's market has dried up. As the above poster mentioned, lots of people are leaving Long Island because they can't afford to stay. They ran a bunch of specials regarding this fact especially how if effects the volunteer organizations - like Fire Dept.

If you can afford to buy something, I would. The interest rates are great and probably won't get better. But if you ask me about the housing market from an investment stand point - I think the prices are over inflated and can't support themselves.

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Interest rates are increasing, if they continue to, the price of houses has to go down to compete...Although I think it will take a good 3-5 years before you notice...

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I think that it depends a lot on the areas. We bought 2 years ago in an up and coming neighboorhood in NYC. We went with a 7/1 adjustable rate mortgage because we only plan on living here for 5-7 years. In our neighboorhood the price is only going to continue to raise because we bought on the upward swing of the neighboorhood. It might slow, but we have already almost doubled our investment.

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Message edited 6/20/2005 6:11:12 PM.