I don't think [the Fed will be forced to raise rates]. I think Bernanke is obsessed with house prices because he knows how important house prices are for the net worth of the average American, and they're crucial. The fact that house prices are still declining has got to be telling him that QE2 is still not doing what he hoped it was going to do.
So, I think if house prices keep falling there's a good probability that he's not going to end QE2 and there may be a QE3.
~Barton Biggs, managing partner, Traxis Partners, Bloomberg News interview, March 24, 2011
Showing posts with label housing prices. Show all posts
Showing posts with label housing prices. Show all posts
May 22, 2008
David Lereah on housing prices (2007)
The steady improvement in [home] sales will support price appreciation... [despite]... all the wild projections by academics, Wall Street analysts, and others in the media.
~ David Lereah, chief economist, National Association of Realtors, BusinessWeek, January 10, 2007
~ David Lereah, chief economist, National Association of Realtors, BusinessWeek, January 10, 2007
Mar 25, 2008
Jeremy Grantham on housing prices being tied to median incomes
A: The other near certainty is that house prices will go back to a normal multiple of family income. In the end, we, the people, have to be able to afford the houses and they are affordable at something around 2.8 times family income. When they peak in Boston at 6 times and nationally at 3.9 times, you know you are in for tough times.
Incidentally, it was late in '06 when [Fed Chairman Benjamin] Bernanke said he thought the high prices of homes in the U.S. merely reflected a strong U.S. economy. Was he not looking at the data? Did he not measure long-term house prices? Had he not seen how they ebbed and flowed as a multiple of family income, which they do here and in the U.K. and everywhere else? And with it being so obviously a bubble, how could he have said that?
Q: Where else does this housing crisis lead us?
A: It has a lot to go. It still has to drop 20% to 25% to reach more normal levels, or if you prefer, it could wait five years for income to catch up, barring no big recessions.
~ Jeremy Grantham, "This Credit Crisis Has a Long Way to Run," Barron's, February 11, 2008
Incidentally, it was late in '06 when [Fed Chairman Benjamin] Bernanke said he thought the high prices of homes in the U.S. merely reflected a strong U.S. economy. Was he not looking at the data? Did he not measure long-term house prices? Had he not seen how they ebbed and flowed as a multiple of family income, which they do here and in the U.K. and everywhere else? And with it being so obviously a bubble, how could he have said that?
Q: Where else does this housing crisis lead us?
A: It has a lot to go. It still has to drop 20% to 25% to reach more normal levels, or if you prefer, it could wait five years for income to catch up, barring no big recessions.
~ Jeremy Grantham, "This Credit Crisis Has a Long Way to Run," Barron's, February 11, 2008
Subscribe to:
Posts (Atom)
