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Posted by: Amey Stone on August 08, 2005
There is a whole class of economist that doesn’t believe we are in the midst of a serious real estate bubble, but is nonetheless quite concerned about the health of the real estate market. Barry Ritholtz, chief market strategist at investment firm Maxim Group, is in that camp.
He fears that a mere slowdown in real estate will lead to major job losses and much slower consumer spending. He marshals a lot of the recent evidence on his blog, The Big Picture.
Even worse, he thinks that even if housing prices don't fall by much, the economy could go into recession in 2006-2007. He wrote to clients today:
"Given the significance of this sector and the relative modest strength of the rest of the economy, we suspect the Fed will fail in their attempt to engineer a soft landing. We expect a recession in the 2006-07 time frame."
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.