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Pimco, the big bond fund manager run by Bill Gross, has a long record of beating the market. Their take on housing prices and the economy? Pimco predicts a “stagflationary soft landing.” The fund company figures the Federal Reserve has just about reached its limit on interest rate hikes and will stop the increases at a 4% federal funds rate. As a result, Pimco expects that housing price appreciation will slow to the mid-single digits. Couple that with higher energy prices and Pimco expects the economy to slow slightly, hence the stagflation. But the bond gurus aren’t taking any chances. Fearing a housing meltdown in some markets, Pimco has representatives riding around with realtors in some cities, monitoring listing times, price reductions and other signs that housing is slowing down even more than in Pimco’s rather benign forecast. Stay tuned.
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.