Alan Greenspan says home prices will drop further,?

Question

should this be a surprise to anyone since it was the sub-prime lending that artificially drove the prices up in the first place

Alan Greenspan retired, he didn't die!! and a lot of people still listen to him, and he has just come out with a new book.
The sub-prime lending boom went exactly lock step with the run up in housing prices, simply because of the law if supply and demand a huge number of people went into the housing market all at once and the prices went through the roof. Do you're!! homework before posting!!!.

So we're considering an "artificial" run up in real estate prices as an "accomplishment" now?, OOOOK!!! that's the first time I've heard that one.
Yes low interest rates and all were good for the economy "temporarily" but what about now the dollar is as weak as it's been in decades, millions of people are getting kicked out of their homes and their losing all the money they've put into those homes all these years, money they could have put towards a down payment on a house they "actually" could afford, that's all money that went right into the banking industry's pockets, just like they wanted. Doesn't it strike anybody as wrong that you have people who aren't really making that much money living in 400K homes? well now we're seeing the result. the whole thing was totally unsustainable, and they knew it but the were blinded by the lure of quick money, as usual.

Answer 1

No one has a crystal ball so no one knows for certain how long this decline in the market will last EXACTLY.... however, if the reports are accurate and people continue to lose their homes due to income issues, not to mention the people who choose to walk away from homes that they owe $50-100k more than they are worth, the foreclosure market will increase which can be expected to drive prices even lower.

California as a whole probably won't recover from this until 2009. There might be some locations which recover faster than others, but some might take even longer than 2009.

And what exactly is "recovery"? At the point prices stabilize or the point where people who owe $500k on their home actually have a home worth $500k?

Answer 2

There you go again, answering your own question. The real problem is that those artificial real estate prices and mortgages were one of the very few "accomplishments" of this administration. If you remove the low interest prices, where would this economy really be. The stock market would be down the toilet and there would be nothing to offset the very real losses in the national economy as far as employment, inflation, and the balooning trade and budget deficits. China is burying us faster than we can create bogus gains.

Answer 3

of direction they/he did! Alan Greenspan is attentive to this nicely. He and Bernacke have prolonged way too plenty low-priced credit that brought about this contemporary bubble. Now they try to reinflate the bubble. this might reason astounding harm. by utilising the way, what befell to Greenspan? have you ever examine his writings from the Nineteen Sixties? In Ayn Rands "Capitalism: the Unknown ideal", he has numerous sturdy papers.

Answer 4

Alan Greenspan, HA! that's funny.

He testified before Congress that if people went for adjustable rate mortgages, they would have saved a few bucks.

If you took his advice, you are really hurting today.

How many millions of people stepped on dollars to save nickles?

"Don't be penny wise and pound foolish"

I see it all the time. Amazing.

Terry S.

Answer 5

Lord, where are you getting your information from? Alan Greenspace has RETIRED.

Sub-prime lending DID NOT drive the rates up.

Please do research before posting.

Answer 6

Good to hear! Maybe that fixer upper in Atherton, CA will come down a coupla' mill. I'll have to check it out!

Answer 7

In California, they're saying it won't start to turn around until 2009.

-MM

Answer 8

No surprise to me, I thought something was fishy when people were buying homes that they could not efford.

Answer 9

No it shouldn't