Monday, June 09, 2003

Well, Money Magazine is pretty confident that the next 12 months will see no housing bubble bursts in the US. The only market in which it sees housing price declines is Salt Lake City, and that a mere -0.4% change. The good times just keep on rolling . . . so much for The Economist's argument that
the latest housing boom has inflated bubbles in several countries, notably America, Australia, Britain, Ireland, the Netherlands and Spain. Within the next year or so those bubbles are likely to burst, leading to falls in average real house prices of 15-20% in America and 30% or more elsewhere over the next few years, in line with average price declines during past housing-market busts. This time, however, with inflation so low, house prices will fall more sharply in money terms than they did in the past.
Or maybe the day of reckoning is just always beyond reach?

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