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Evaluating The Housing Market: Would A Little Inflation Hurt?

Mike in Tucson: Homeownership RateWith the jobless rate hovering near 10% nationally, and the homeownership rate falling in every major market in the US, I have to ask your opinion:

"Would a little inflation hurt?"

Since the 1980s, I've been an inflation hawk.

I remember being a real estate developer as mortgage rates rose to 17% for a 30 year fixed rate.

I built 350 homes in Ocean County, NJ during that time period.

I employed 21 full time carpenters.  For years!

So I just have to ask the question:  Is "a little inflation" the same as "a little pregnant?" 

What's YOUR opinion?

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Comment balloon 11 commentsMike Jones • June 15 2010 07:47AM

Comments

WOW Mike ... very interesting!

VB ;-)

Posted by Robert Vegas Bob Swetz over 10 years ago

Morning Mike, as for your question Is "a little inflation" the same as "a little pregnant?" 

No as one knows the condition of being a little pregnant means it will continue on it's upward & outward course, lol!

I'm doing different things in my business and have not limited it to just staging so I'm trying to stay positive and buck the system :)

Posted by Cynthia Bartch over 10 years ago

Hi Mike,

A little inflation is always good for real estate. The key word is little!

As long as we're exposing our selves, higher mortgage rates would help. Rates need to be high enough so that our retirees can afford to buy and own their own homes!

Bill

Posted by William J. Archambault, Jr. (The Real Estate Investment Institute ) over 10 years ago

Deflation has been the watchword with some prominent economists.

Posted by Richard Byron Smith, NMLS #184479, Mortgage Loan Officer (Mortgage Loan Officer, Fairway Independent Mortgage Corporation NMLS #2289) over 10 years ago

Just for housing.  Just for housing.

Let the price of real estate inflate until I can sell mine, but only real estate.

Careful what you ask for.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 10 years ago

Hmmm, excellent question.  I think yes if I remember basic economics.  I also remember those times & you had to be pretty innovative to sell anything back then!  You could buy a home cheaper on your Visa then too.

Posted by Lyn Sims, Schaumburg Real Estate (RE/MAX Suburban) over 10 years ago

Mike - Unfortunately, inflation is coming, and I don't think we will call it little. When you spend 40 percent more than you make (that would be our federal government), and you don't even bother to plan a budget, You can expect a lot of money to be printed over the next few years. Inflation will show up, but that doesn't mean jobs will follow.

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) over 10 years ago

Inflation for the housing market can't be contained. It WILL spread to the rest of the economy and while a recession is bad (I still contend this will be called Great Depression II like WW II), I also remember the rates over 17%. But of course, flipping the pancake, the homes had equity unlike today.

Posted by Kate Kate over 10 years ago

Isn't alot of inflation heading our way ???????? We may as well start the process !!!!!!!!

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) over 10 years ago

I agree with Lenn, be very careful what you ask for. 

Unfortunately the jobless rate is far greater that the 10% the government throws around.  It's closer to 20%.

Also, I'm wondering where everyone thinks the jobs are going to come from???  Are the jobs that have been sent overseas during the last 20 years coming back the USA soil??? 

The world we live in now does not even remotely resemble the 80's.

Posted by Doreen McPherson, Phoenix Arizona Real Estate ~ (Homesmart ~ Scottsdale ~ Tempe) over 10 years ago

I have to go along with moderation being the key in this, as in most,  issues.

Posted by Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional, Palm Harbor, Dunedin, Clearwater, Safety Harbor (Charles Rutenberg Realty) over 10 years ago

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