Skip to content
Andrew Tobias
Andrew Tobias

Money and Other Subjects

  • Home
  • Books
  • Videos
  • Bio
  • Archives
  • Links
  • Me-Mail
Andrew Tobias
Andrew Tobias

Money and Other Subjects

Real Estate, Real Inflate

June 9, 2003January 22, 2017

Caption of the main photo in yesterday’s New York Times real estate section: ‘Anthony Gordon, a photographer, paid $625,000 for his 2,200-square-foot loft five years ago and was recently offered $3.5 million for it.’

Thesis of my story in yesterday’s PARADE: Real estate prices have run up so far so fast in some areas, they may be ripe for a correction. Sorry there’s no link to the story, but it’s not exactly rocket science: Someday, mortgage rates may rise. That will make high home prices harder to support. Uh, oh. Or perhaps the economy will stay sluggish and interest rates won’t rise. High unemployment does not ordinarily a robust housing market make. Uh, oh. (And rising property taxes to cope with massive state budget deficits won’t make home ownership any more attractive, either.)

The Administration and the Fed appear to be pulling out all the stops to keep rates low and housing strong, at least through January, 2005. Adrian Van Eck, a long-time observer of these are other markets, writes in his latest newsletter (Box 1697, Naples, ME 04055): ‘When I began to write this newsletter, just seven days ago, I personally was skeptical about the likelihood that the Fed or Fannie Mae or banks and other lenders could prevent a traditional post-boom decline in home prices. Now I’m starting to believe they can succeed!’

To real estate investors, it is a variation on the old stock market saw: ‘Never fight the Fed.’ If the federal government and, especially, the Federal Reserve, are determined to keep real estate prices strong, as seems to be the case – at least through the next election – they may well succeed. And a strong housing market could be a major lift to the U.S. economy, which is something the rest of the world’s far too sluggish economy sure could use.

Still, if I were photographer Anthony Gordon, I would take the $3.5 million and run.

Tomorrow: My Meeting with John Ashcroft

Post navigation

← ABBA
Help Me Win a Bumper Sticker →

Quote of the Day

"We've forgotten all the sacrifices that the people who've gone before us made to give us this wonderful life that we have. We accept it; we take it for granted; we think it's our birthright. The facts are, it's precious, it's fragile -- it can disappear."

Ross Perot, 1988

Subscribe

 Advice

The Only Investment Guide You'll Ever Need

"So full of tips and angles that only a booby or a billionaire could not benefit." -- The New York Times

Help

MYM Emergency?

Too Much Junk?

Tax Questions?

Ask Less

Recent Posts

  • Our Record-High Stock Market

    June 30, 2025
  • Stuffing The Goose

    June 30, 2025
  • Yes! (Plus A Bonus)

    June 29, 2025
  • How Does THAT Make You Feel . . .

    June 27, 2025
  • Randi, David, Ken, and HYMC

    June 26, 2025
  • Six Links For Your Consideration

    June 25, 2025
  • Weekend Reading

    June 20, 2025
  • Oh, My

    June 18, 2025
  • 3 Quick Clips

    June 17, 2025
  • A Quick Poem

    June 15, 2025
Andrew Tobias Books
  • Facebook
  • Twitter
©2025 Andrew Tobias - All Rights Reserved | Website: Whirled Pixels | Author Photo: Tony Adams