More Fun with Open Houses

We're going to an open house today. We're not looking to buy (my now 7 month pregnant wife would seriously consider trading me in if I even suggested such a thing). But we are watching the market very carefully these days.

Are we on the cusp of a drop in housing prices? More and more I'm thinking the answer is yes. Interest rates continue to rise. We've got inflationary pressures in the North American economy, and the US Federal Reserve is likely to continue in the current reasoning. After all, inflation is considered the enemy, and we've got to control it. It seems the weapon of choice continues to be interest rates.

At the same time, the US federal government is talking tax cuts. Tax cuts are actually inflationary in nature, because they increase the money supply. So we're going to be pulled back on one side and pushed forward on the other. Go figure.

In the midst of this, we do have inflation being driven by the fall-out from this year's serious hurricane season. Families who are rebuilding lives have to buy everything all over again. Even if this rebuilding and refurnishing of lives takes place slowly, it will drive prices up because it drives demand up.

And while the price of gas may be dropping, am I the only one who is noticing that the price never goes down as fast as it goes up?

Well, with all this stuff afoot, we're watching the housing market. After all, Baby #2 is likely to create more space pressure in an already well-used home. We can do some smart renovation and we can make sure that we limit the amount of "stuff" we collect (my wife would love that) but we can't stop the fact that our next family member will also be accruing possessions all his or her own. So, we're hoping to see when the best time is to buy, sometime over the next 2 years. We're hoping our home doesn't lose too much value in comparison to the market, because we're frankly betting on the drop in prices in that time period. And we're just making sure we know what's up, while we wait for our newest family member to decide on the time to be born.

Michael

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