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Housing Bubble Myth
By: Dovid Winiarz
Attention Homebuyers- Attention Homebuyers!!! There is NO housing bubble. This is the word from Staten Island mortgage expert, Dovid Winiarz, president and chief mortgage manger of Gefen Financial Corp.
"By paying attention to the indicators that move markets, we can get a clearer picture of where home prices are going", says Winiarz. "When will a person stop considering buying a home?" When a person is worried about keeping his job, he will reconsider buying a house, but nationwide, unemployment is at approximately 5 percent. This means that ninety five percent of the people who want to work are working and are candidates to purchase real estate!!
What is going to prevent these working people from buying a home?
If you believe the media hype about rising interest rates, you are buying into the fear that the media is trying to sow, to get you to buy the next days newspaper or to "tune in at 11" to follow the hype. This high ranked New York Mortgage Broker wants to remind the reader that interest rates have been in double digits. People over age 38 reading this article remember the excitement of refinancing into an adjustable interest rate at 14 percent. Let's assume a scenario where rates jump one and a half percent in 2006. On a 450,000 dollar mortgage, the monthly payment would go up, post tax deduction, less than nine dollars a day. Is nine dollars a day going to stand in the way of a hard working family achieving the American dream?
Financial gurus have compared the housing situation to the stock market and have prophesized that "just like the stock market could burst so could the housing market". Stock prices have risen dramatically over the past several years without bursting. Home prices have risen as well. Real Estate is like art-it is worth what people are willing to pay for it. If you look around and see more homes than 50 years ago; remember, however, that the population has grown since then as well. Pulling on information gleaned from team members, Dovid Winiarz comments further, "Another factor to consider is that when a person sells a stock they do not have to buy another one. When a person sells one home, they will almost always purchase another one".
While home prices may be undergoing a correction in certain markets-this is not a bursting bubble. Even if homes appreciate at half the anticipated growth in 2006, we are looking at 5-6 percent appreciation. If you are the person who has been renting for the past 5 years because of fears of a burst bubble-now is the time to put those fears behind you.
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