Houses selling for 20% less than they are assessed

2008 will be an interesting year. (0.00 / 0)

The Federal Reserve Bank will do everything they can to prevent a collapse in the housing market, which is the lynchpin of the economy. Just remember, the market can and will do whatever it wants.  The Fed only has so much power.   But expect interest rates to go much lower, possibly even 1%.  It will be a great time to refinance but beware of adding to your debt burden.  And be warned, the banks might become too frightened to give out mortgages at low rates in tough economic times.

The Federal Reserve Bank has chosen to inflate its way out of the looming economic crisis by lowering interest rates and printing money.  The idea here is that inflation (as painful as it is) could minimize the staggering national and consumer debt burden by reducing the buying power of your $$.  If you survive the period of high inflation, your debt won't seem so terrible afterwards.

But this approach comes at a price.  The value of the US dollar is being destroyed.  And it could lose its position as the global currency of choice, further reducing it's demand and value, leading to more inflation.

It is hard to know what the housing market's future is. I think we are in unchartered economic waters.   If the Fed's plan fails, and there is a good chance it could, housing prices will plummet, and America will enter its worst economic crisis since the Great Depression.  

If it works, the Fed will have staved off disaster for another day. And housing prices could stabilize.  One thing for sure, stocks and bonds are dangerous bets during periods of high inflation.   You are at the mercy of the declining value of the dollar and are not truly diversified.  Don't trust financial advisers who tell you otherwise.  Think for yourself.  Every fiat currency in the history of the world has failed after deficit spending orgies.  Eventually people realize it's just paper and lose confidence because of the debt.  Why should the US be any different?  Because we are special?  Don't delude yourself.  Metals like Gold could be good bets long term if you are worried about a currency crisis like I am.  

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by: John @ Wed Feb 06, 2008 at 11:40:23 AM CST

Assessed Value vs. Market Values (0.00 / 0)

Assessed values and market values have never been equal in Dedham or any other town that I have worked in selling homes. When prices are going up, assessed values lag and vice versa. Prices in Dedham are down approx. 11 % from the peak of 2005. If you would like to get accurate sales information on the Dedham home market, go to www.dedhamrealestate411.com and read the 4th Quarter and year end review post.

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by: Jay Donahue @ Thu Feb 07, 2008 at 17:44:32 PM CST