Greenspan: Housing Market Bottom Yet To Come

Posted by: Prashant Gopal on August 4, 2009

Today I wrote that pending home sales hit a two-year high in June — seemingly another indication that the housing market has hit bottom.

But former Federal Reserve Chairman Alan Greenspan warned on ABC’s “This Week With George Stephanopoulos” Sunday that recent signs of housing stabilization might only be temporary, according to a Reuters report.

Foreclosures are expected to rise in coming months as banks dump more inventory on the market and pay-option adjustable rate mortgages recast.

It is possible that could get a second wave down … Under those conditions, we would get a very significant change in the underlying confidence in the consumer area [as foreclosures rise and more home values fall below their mortgage levels].

Reader Comments

edy

August 5, 2009 9:39 AM

Greenspan spoke! Don't buy a house any time soon.

Kenneth G. Smiith II

August 5, 2009 11:19 AM

Real Estate is three things: Cyclical, Emotional and Seasonal. Right now we are seeing all three aspects, which is very rare.

Eric

August 5, 2009 12:26 PM

Capitalism requires spending and borrowing to work. Focus on doing good work, going above and beyond, and spending money.

al

August 12, 2009 4:07 PM

i remember not long ago a house cost 350 thousand. the boom came... then the house was worth 650 thousand. now you can get it for 525, 500. i believe when you can buy that house for 350 we have hit the so-called bottom. only thing is, people have less money now then before the housing market went nuts.

al

August 12, 2009 4:07 PM

i remember not long ago a house cost 350 thousand. the boom came... then the house was worth 650 thousand. now you can get it for 525, 500. i believe when you can buy that house for 350 we have hit the so-called bottom. only thing is, people have less money now then before the housing market went nuts.

Jaren

August 14, 2009 2:35 PM

Sounds like a negative attitude out there. It's obviously a good time to buy...yeah maybe we haven't hit bottom, but why not take advantage of the lowest prices in 7 years (in MN), fixed rates around 5% and $8,000 of free money if you're a first time home buyer. Never time the market...it doesn't work, else we would all be rich. Be educated and jump in when you're ready. It's not a bad time to be a buyer!

jhenry

August 18, 2009 11:55 PM

Yes, Your vehicle must be less than 25 years old on the trade-in date

Jhenry
Blogger
www.cashforclunkersfacts.info
http://www.cashforclunkersfacts.info

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About

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.

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