Alan Greenspan revealed more about his thoughts on the Housing Crisis in Vienna, Austria today:
“So far, prices have dropped only slightly. But it was enough to cause alarm around the world,” he said. “Prices are going to fall much lower yet.”
“There is no doubt about the fact that low interest rates for long-term government bonds have caused the real estate bubble in the United States”
“The Federal Reserve began a series of interest rate increases in 2004. We were hoping to bring the speculative excesses in the real estate sector under control. We failed. We tried it again in 2005. Failure”
Convinced yet?
Source: Yahoo Business
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How long and how low is the question now.
well, i like how alan is a straight shooter; at least he doesn’t try to pull the wool over the publics eyes, by making broad, sweeping statements about how well the US economy is doing, like some people. hint: middle name starts with ‘W’
I agree that we still have some room to go (down that is) but I also find it very interesting that despite an estimated 40,000 foreclosures in Southern California this year, prices are holding pretty steady.
Without question, some areas were overbuilt and over-inflated and they are taking it in the shorts. However, other areas are seeing a huge rise in foreclosures but the prices are not going down much at all.
My belief is that this time it is different. In past foreclosure markets the banks held the paper and therefore had no choice but to discount until they were off the books. This time, the paper is held in Mortgage Backed Securities owned by Funds and Foreigners.
I just read a statistic where 2-1 foreclosures are being held for investment (rented out) vs. being sold as REO or auctioned.
Very interesting times indeed.
Kim Curtis
California Mortgage Loan
I think we’ve known for several years that this was coming, it was just a matter of time. Now that the “bubble” is starting to deflate the question is how fast and how far. People will remain in denial for some time, but eventually we we see significant decreases in some areas I believe.
Finding remortgage quote is the best probable connected where you will find a lot of engaged in press forward remortgage quote with cut-rate rates since their company in large quantity results in tough competition.
Luckily, Charlotte hasn’t faced a lot of the problems that the rest of the country has…and there’s a great amount of investment opportunities available whether you live there or not. Below is a blog I follow which explains what’s going on there…pretty kewl…
http://charlotterealestateinvesting.blogspot.com/2007/09/charlotte-real-estate-market-continues.html
Thats perfect! More great news, just keep it coming. Luckly I dont believe Greenspan
It is always interesting to come across older posts like this. Looking back, and reading what Greenspan said, makes him look pretty short sighted. It just goes to show you even the smartest guys get it wrong sometimes
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