January 24, 2008

HousingPANIC Quote of the Day

"The current US downturn could not be more different. House prices are falling, and have further to fall before reaching a more sustainable level (in terms of the price-to-rent ratios as well as several other measures). Core inflation has been above the Federal Reserve’s comfort zone for some years now.

There is no way that either the Fed, the Bank of England or the European Central Bank could, at this stage, create another housing boom even if they wanted to
. Housing downturns have a strong dynamism, which is not easy to break. This is not a great time to take on debts, but to pay them off."

- Wolfgang Munchau, Financial Times, January 2008


Anonymous said...


Just a year late!

blogger said...

Housing now has a stench that people wont forget for awhile

Anonymous said...

That's what I thought, too. I had another conversation (loose term) with some coworkers today. I've still yet to own a home and all of them own, some more than one. They mentioned to me that I should get ready to buy as the interest rates are going to plummet. I explained that a price drop would be a lot better, and cheaper. They didn't like that rationale, even after I showed them on a mortgage calculator just how much interest rates affect payment, especially when you're unable to bring 20% to the table. If prices were back to 2000-2001 levels I could feasibly come up with 20% but now I'll struggle to get 10%.