Dow Continues To Drop!

BearMtnHIB wrote: Honestly- I have no idea how the DOW got as high as it was. this economy was never worth 11,000 dow - more like 8500 is the reality here.

The market appears to be moving on the news of the day, instead of reality. The stock market is a propped up house of cards supported by the FEDS printing press.

Reality is still a long way off.

For once, I absolutely agree with you.

SS109 wrote: I wonder if interest rates started to rise if more people would buy homes etc? Right now if you are looking to buy a house, you can afford to wait and hope housing prices continue to fall as more foreclosures are closed. But if you knew interest rates would be 7% next year, you might buy now.

If you knew that interest rates were going to be 7% next year, you would (or should) also know that housing prices wil be even lower next year than they are now. As interest rates go up, homes prices go down because people can't afford as much house.

SS109 wrote: I wonder if interest rates started to rise if more people would buy homes etc? Right now if you are looking to buy a house, you can afford to wait and hope housing prices continue to fall as more foreclosures are closed. But if you knew interest rates would be 7% next year, you might buy now.

That is a possibility. It really is a great time to buy a starter home if you have 20% down. A friend just picked up a $110K house in Chicago, nice place and area he said. And he is a fresh college grad with a teaching job. 4% fixed for 30 years is a deal. If it goes to only 5%, that raises payments by about 25% That mortgage is probably $600/month -cheap!

SS109 wrote: I wonder if interest rates started to rise if more people would buy homes etc? Right now if you are looking to buy a house, you can afford to wait and hope housing prices continue to fall as more foreclosures are closed. But if you knew interest rates would be 7% next year, you might buy now.

The interest rate on home financing is the lowest it's been in ....decades? 3.75% I think the housing market hasn't bottomed out yet. There is still a ways to go; and I think that foreclosures are also going to continue. Between the low rates and the choice real estate out there (foreclosures in particular) to be had for much more realistic prices, now is as good a time as any to buy. Unfortunately, getting a bank to loan to you is another matter.

AspenValley wrote:

SS109 wrote: I wonder if interest rates started to rise if more people would buy homes etc? Right now if you are looking to buy a house, you can afford to wait and hope housing prices continue to fall as more foreclosures are closed. But if you knew interest rates would be 7% next year, you might buy now.

If you knew that interest rates were going to be 7% next year, you would (or should) also know that housing prices wil be even lower next year than they are now. As interest rates go up, homes prices go down because people can't afford as much house.

Most people don't buy houses as investments, it was just a perk, they buy houses cause the need or want them and don't have the tools to make a good decision on many or any other variables.

Those that are in it for investment would be best to stay out of commodity markets and get the benefits of understanding a more unique market. Boxes on little lots have no real value in the long run. The boxes were built to artificially jack up the perceived value of the land. I have made money on buying and selling right on through this market, but not buying boxes on .25-10 acres.

I will give a free tip, just buy farmland right now, not any farmland, undervalued farmland. You will thank me. Do you really think that in 20 years there will be as much growth in the stock market as the value of the land that grows our food and now our fuel. You can picture the seeds getting planted, the food growing and being harvested for market, you know it MUST happen. Can you picture exactly how apple or GE is going to maintain it's market edge for something that we don't really need. I just can't, hope they do, but it is all very poorly supported. Learn something from the last few years, these fake markets are not strong, they are tool to extract your $, by design.

It would not be too tough to cash in your 401k and buy a medium farm and lease it right back to the guy you bought it from. Very common tale with some happy playas.

Think about local markets in stead of generics. Park County will have its value absolutely gutted in the next decade or so at the same time that many other specific areas will 4x in price, especially undervalued farm land out of the mtns.

Worship the dow and it just might let you down, again.