patrick.net

AiJ, thanks for posting that. Good article. My feeling is that moderate interest rate increases without an accompanying wage increase will result in a decrease in house prices. However, if interest rates rise dramatically, triggering fears of runaway inflation, house prices will likely rise as people flee to hard assets (I will be one of those people).

I don't think we'll see prices drop until this Fall (unless the stock market tanks sooner) as the Spring/Summer buying season will cause sellers that can hold out for bubble prices. Also as long as the market holds or rises people feel "rich" and won't want to discount.

Stagflation will be the endgame.

Anything that unfolds this year will likely be a continuation or variation on the various rope-a-dope schemes we've seen this year and last. Get people in houses and keep the money supply moving. Bernanke has already stated that the Fed will simply start buying up MBSs again if housing sales begin to seriously contract (correct).

Austinhousingbubble says

Stagflation will be the endgame.
Anything that unfolds this year will likely be a continuation or variation on the various rope-a-dope schemes we’ve seen this year and last. Get people in houses and keep the money supply moving. Bernanke has already stated that the Fed will simply start buying up MBSs again if housing sales begin to seriously contract (correct).

Agree, I think this game would never end. Fed will just double down and by another $3T of MBS, because nobody else would. If they let it go, interest rate would definitely go up by 1.5-2%, which would cause the housing sale to go down rapidly(already its down for the last two months). I think they wouldnt let anything happen until this election.