Posted by Wayne-NC on July 09, 2005 at 11:44:01:
Hi John, that came to me in a private e-mail and that person claimed to use RE computer software and some math. Never did get the formula. I like your analysis very much dispelling the correlation between interest rates and housing prices. What I was looking for is a hypothetical situation that may occur or another tool to quickly analyze a future purchase from a historical point of view. For example, I would like to buy in Kauai and prices are 3rd on the list of potential bubbles. I know that mortgage interest rates are going up and I would like to see home prices drop. But how much would make it a better deal than now? Well, if next year rates are 1% higher and home prices have gone down (maybe a market loosing air) by 12% or more, than I view it as a better value buy than now. One way to look at things. Also, Hawaii has been a very volatile market due to a couple of reasons. First and foremost, it is a fly too destination which takes alot of very expensive fuel to get to. Second and related to that is terrorist fears of flying which along with fuel, will hurt its major industry-tourism. I might add that local wages cannot support those prices. Sooner or later, homes will cashflow and that will be my time to buy. Every trip out there will now be tax deductable! I hope they move the next convention there. Mine is already paid for.