Re: The Housing Market’s Last Gasp
Merrill Lynch estiamtes that a flat housing market would knock about 1% off GDP growth. Other estimates are a bit bigger, maybe 2%. Since we’re now around 3.5%, that’s still above 0%. It would probably take a bigger hit out of consumption than other elements of GDP.
People who’ve bought r.e. for spec purposes could take a bath even on a flat market. For people who bought overpriced houses just to live in, well at least they’ll still have the house.
Of course it could be worse - it could cause and/or deepen a recession - which is exactly what the US needs according to the textbooks. But I just like to remind people that a problem doesn’t always have to turn into a disaster.
Doug
Steven L. Robinson wrote:
If so, how would that impact those who have bought real estate for speculative purposes? What about those sectors of the economy that serve new housing construction? The prospect of falling house prices in coastal California seems like a fantasy from never-never land, but isn’t it almost as unrealistic to assume that new house construction would be the engine driving the larger economy? SR
Steven L. Robinson wrote:
The Housing Market’s Last Gasp
It could just go flat, like the UK and Australia.
Doug
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