Run for the life boats. This ship is sinking
Good. Twice the pride, double the fall.
You probably all have heard this already but homesales set a record in June of this year.
According to the National Association of Realtors,
In June, existing homes sold at an annual rate of 7.33 million units, an all-time high and an increase of 2.7 percent from the seasonally adjusted sales pace in May, according to a report Monday from the National Association of Realtors.
Of course the realtors are banging the war drums of how great this is.
"Just when you think sales activity is ready to settle into a more sustainable pace, the housing market continues to surprise," said David Lereah, the Realtors' chief economist.
But others have a different opinion.
But other analysts noted that mortgage rates, as measured by Freddie Mac's nationwide survey, have risen for three straight weeks and now stand at 5.73 percent for a 30-year mortgage, a development they expect will start to dampen both demand and prices.
"We are not looking for a burst bubble nationally, but we do expect things to slow down," said Beth Ann Bovino, an economist at Standard & Poor's in New York.
All the Grunt knows is that this a sign of the impending bust. Those of you who are first time investors eager to invest into real estate, the Grunt's recommendation is to act with extreme caution. Do not be pushed around by fast talking brokers who keep telling you that the market is only going to go up and this is the time to buy before interest rates kicks up. And even if there is a bubble that Manhattan will be unfazed. The reality is that no one knows how bad the correction will be. Unless there is a dire need to find a home because of tax or personal reasons, you should just treat real estate like a night at Scores. Look but don't touch.
Recently the Grunt heard on the wire that a lot of the high end homes in Manhattan are being put on the market. The Grunt can only ascertains that segment of the market has gotten the greenlight to liquidate. But they may be too late. Currently the Grunt has seen more demand for starter apartments including studios. The more expensive inventory isn't catching anyone's eye. Maybe it's because of the enormous price tag.