patrick.net

seaside says

It looks like they’re trying to get the full advantage of spring market before obama credit expires.
The same happening in your area?

Yes, very much so. Things on my favorite list on Redfin are going pending and selling like mad, both in the Sac foothills and here in the East Bay (west and central Contra Costa). It's picked up A LOT in the last 2-3 weeks.

This "tax credit" thing is a load of BS.

People who were going to buy, by and large, buy anyway. The number who bought only BECAUSE there was a tax credit, you've going to have a hard time making the case the measly amount that it represents is what pushed them over the brink.

Sales are DOWN
Mortgage rates starting to creep UP
BofA announcing principal forgiveness just to keep underwater hamsters on the treadmill
Fed will soon stop buying MBS, there's a bigger factor than your tax credit

Vicente says

This “tax credit” thing is a load of BS.
People who were going to buy, by and large, buy anyway. The number who bought only BECAUSE there was a tax credit, you’ve going to have a hard time making the case the measly amount that it represents is what pushed them over the brink.

Well, what it is doing is pulling sales forward. If you were planning to buy anyway, you might decide to buy sooner because of the tax credit. And let's also not forget that in most of the country, $8k could represent 5% of the purchase price. That's a pretty decent chunk. But I agree that it's not going to change anyone's mind about buying.

I've been making offers, all cash mind you, on foreclosures in San Francisco~~~and I've been outbid every time. Anecdotal, I know, but it's frustrating as I'd like to be able to buy an investment property there and keep it as a place for future retirement. I'd like to think that prices will go lower, but there are lots of cash buyers out there who have been waiting for prices to fall. I don't think I need to rush into buying, but part of me is beginning to fear that the best time to have bought might have been early last year. I realize that there are bargains to be had in the outlying areas, but I want to be in the heart of the city so that I can maximize my rent potential, should I decide to rent it out.

WillyWanker says

I want to be in the heart of the city so that I can maximize my rent potential, should I decide to rent it out.

To maximize your rent potential, you want the highest percent return on your investment, not the maximum rent! That generally means avoiding the heart of the city, where rents are high, but percent returns are among the lowest in the whole Bay Area.

But there are a few good reasons to buy in central SF if you already live there:

It's easier to manage a rental near your than farther away.
You may want to live in it, where you would not actually want to live in Vallejo.

She has been right about a lot of stuff!

My first post after reading PAtrick.net for nearly 5 years...

Has anyone read this article?

http://www.fool.com/investing/general/2010/03/30/housing-24-hours-from-the-next-leg-down.aspx

When the Fed stops buying MBS (in 24hours) this will have an effect on interest rates and housing prices.
The questions are how soon will housing prices be affected?... and to what degree?...

cheers.

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.