Posted by RESPA Dog

Doctors Alan Greenspan and Ben Bernanke, former and current Federal Reserve Chairmen, respectively, have declared the housing patient on the mend. Are they right, or is it a case of another early diagnosis (like Greenspan’s 1996 “irrational exuberance” diagnosis, over three years before the market’s top)?

I lean toward the view that the recent improvement in housing inventory and pricing is more about warm weather, lower interest rates and normal seasonal patterns than a sign of a true bottom. The pace of deterioration may have bottomed. But given the surge in empty houses for sale (see below) to an all-time high, I believe the most apt description for the current trend is “suspended animation.” Even if we’ve seen a turn in pricing and inventory, problems in subprime-lending land and housing-related employment remain ahead of us.

 

 

 

 

 

 

 

 

Read more…

---