More plain talk from Steve about home prices and future appreciation rates. He is talking to realtors.

What I sent to Steve:

Hi Steve,

I enjoyed your deep dive today and also put it on my blog where local realtors are known to hang out.

You mentioned that you are studying the locked-in effect.

I don’t think it has the effect people think it does, and I’m not sure there is any effect.


  1. The extreme difficulty of finding a superior home.
  2. The extreme difficulty of winning a superior home, once you find one.
  3. Paying capital-gains taxes on the sale of the previous home – and usually six-figures of taxes.
  4. Higher property taxes for most, even in California.
  5. Start the 30 years over again on the mortgage – which those extra years should be a bigger hurdle than the higher rate for those who analyze the differences in costs.
  6. Then pack up the stuff and uproot everybody and everything from the previous house to start fresh in the new place….and hurry up with the $25,000 to $50,000 in repairs and improvements that literally every buyer has to do when buying a resale home.

We will only know if there is a locked-in effect if rates plunge to 3% again, which is very unlikely. So it’s all just fodder for the twitterverse.

But if rates did plunge – even to 4% – then we’ll find out that homeowners are still reluctant to move.

Then the problem will be re-labeled as the Forever-Home Effect.

Just my 2 cents!

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Jim the Realtor
Jim is a long-time local realtor who comments daily here on his blog, which began in September, 2005. Stick around!

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