By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
And everywhere we went, the interest rate forecast was rosy.
"Well," I said several times, "we're both kind of scared about where interest rates are going."
"Oh, my," one sales rep said. "Don't even think about that. Nothing is going to happen. And if it does -- which it won't -- you just re-fi later."
"And anyway," he continued, "even if rates go up -- which they probably won't -- you're only talking a few extra dollars a month anyway."
My wife chimed in: "We figure at least $100 a month."
"Yeah. Just a few extra dollars," he said, shrugging. (His new Ford Excursion waited outside.)
Sales reps invariably snickered at my Greenspan comments. In two sales offices, several sales reps actually converged on us to laugh when I mentioned Greenspan and interest rates.
Don't worry, they said. It's an election year. The administration wouldn't allow the economy to be killed with high rates because it would kill Gore's chances. Again and again we heard: "It's just a few dollars a month." "You can always re-fi."
Refinance. Refinance. When things get worse they always get better, they said. And most every sales rep had a happy personal story of rebirth through refinance.
They were pouncing on any mention of higher interest rates and Alan Greenspan. And in my mind, the consistency and fervency of the pouncing implied that there had been earlier meetings, closed meetings, meetings to discuss the rise in interest rates and the drop in new building. And at those closed meetings much anxiety was vented. The real estate Dust Bowl of the early 1990s was mentioned to much hemming and hawing. And in the end, although they could not alleviate their own fears, they did create a new encyclical for fielding and diffusing the fears of the masses.
Although my little inner Cassandra kept screaming otherwise, we decided to build a new house. We loved the house. We loved the location. We even liked the sales rep because he was knowledgeable, human-looking, a little surly, and he talked us out of a couple of upgrades.
But it was too much money. And it's just going to become much too much money over the next few months.
But Alan, those models are just so pretty.
Maybe, just maybe, I'm terribly wrong on all this. It may be a case of plain old buyer's remorse. To those sales reps, maybe $100 or more a month isn't a big deal. And maybe they're right. Phoenix's economy has remained strong for several years now. This isn't a recession coming, for God's sake. This is an attempt to moderate an overly healthy economy. Being real estate crazy, Phoenix may bear the brunt of this a little bit more than other cities, but it will be just fine.
Maybe that Apocalypse I envision is, like most prophecies, just a projection of personal anxieties.
But when it's down here on the personal-finance level and you've just committed to the biggest outpouring of cash ever, it's very hard not to feel like the sky is falling.
Whatever the truth might be, just be careful out there, young couples. Study the market, know the forecasts, bring along your calculator and stick to what you know you can afford.
Because you will be told over and over that two plus two only equals three. And I promise you, after enough days in the Phoenix heat and model beauty, you will begin to believe it.