Greenspan speaks out on Housing prices.

Discussion in 'Current Events' started by Xtremehkr, Aug 28, 2005.

  1. Xtremehkr macrumors 68000


    Jul 4, 2004

    An article worth reading, for those who are invested in the housing boom or considering entering it. Greenspan is very cautiously warning the nation about how over inflated the prices have become. And how consumers may have become too complacent about the performance of the economy, in regards to how much they are saving as a percentage of their earnings. There are many related articles worth reading as well. Given Greenspans position and experience, his opinion is as good as any when it comes to predicting trends.
  2. Music_Producer macrumors 68000

    Sep 25, 2004
    Absolutely.. we don't even need Greenspan to confirm this.. its just something waiting to happen. Its surprising, how so many people don't understand the term "principal"..they do know about interest rates, but not principal, and are increasingly going in for interest only mortgages.

    Look at the economic scenario the US is heading for:

    1. The biggest deficit - what.. like $330 billion or something?
    2. China is buying US treasury bonds daily.. at a rate of 10 billion $/day
    3. Oil prices going up.. and up..

    On top of that, stupid Bush is wasting billions on Iraq just for his/cheney's profit making scheme..whatever.I don't want to talk about that.

    The average US household has ZERO SAVINGS!!! People in villages in India have savings!!! Somehow Americans just don't believe in saving, its all about credit cards and showing off. Its not only the housing market thats going to collapse.. the job market, trade sector, etc.. everything is going to dip. I just hope we don't go into a recession.. but it looks like we are heading into one.. at a pretty fast rate.
  3. Les Kern macrumors 68040

    Les Kern

    Apr 26, 2002
    The signs have been there for a long time... something is horribly wrong in this country and I doubt it can be fixed before all hell breaks loose. It goes way beyond the housing issue mentioned, but real estate is the last thing holding the economy together. There's no other stop-loss. Americans, as mentioned, have zero savings. Want to read one scary-ass article? Check THIS OUT.
  4. Henri Gaudier macrumors 6502a

    Henri Gaudier

    May 4, 2005
    Naive in the extreme....

    .....Greenspan doesn't predict economic trends. Along with Wolfowitz Soros & the rest of the financial elite he dictates them. He is one very dangerous sick individual.
  5. aloofman macrumors 68020


    Dec 17, 2002
    I think you missed the point of that article.
  6. jayscheuerle macrumors 68020


    Philly is NUTS.

    Bought a house 7 years ago for $89,000.
    Sold it last year for $320,000!!

    Unfortunately, the ex got half and $150,000 got me a MUCH smaller house in a MUCH less desirable neighborhood. Prices are still going up in an INSANE way and I could probably sell my place for $180 if I wanted to, but I couldn't even afford to move back into THIS crappy neighborhood then...
  7. highres macrumors 6502a


    Jul 1, 2005
    Near the Singularity
    Los Angeles and Santa Cruz have got you beat...3 years ago a normal two bedroom house cost $300,000-$375,000, three years later the median price for that same exact type of house is $700,000-$750,000! I for one am glad a bit of reality is being injected into the housing market, and have known for a couple of years that the housing prices had to even out or maybe even decrease a little...However space is at a premium in California and the population will be doubling so real estate is going to keep climbing even if there are a few downturns in the market.
  8. Xenious macrumors 6502a

    Mar 22, 2004
    Texas, USA
    Now if that housing bubble pop would be just enough for me to buy that nice 2000+ sq ft home in San Fran bay area that I always wanted. ahha
  9. jayscheuerle macrumors 68020


    Percentage wise though my place increased 359% in value instead of 200%. In our case, all the people that graduated college and went to live in the burbs got bored out of their skulls and are moving into Center City areas, along with people who are ditching NYC for a less intense city (with better beer though!). It's a walkable city, with housing among the downtown, so people like the idea of not needing cars to get around. I used to be able to walk to work in 22 minutes. Now it takes me 45... As long as people with higher levels of income continue to want the city experience, it will price others out. Many can't afford to sell their houses, others take the money and run (to New Jersey?)...
  10. wdlove macrumors P6


    Oct 20, 2002
    Just normal business cycles, what goes up will come down. At least here in Boston it's greedy speculators that have driven up prices. They are the only ones that really profit. :(
  11. jayscheuerle macrumors 68020


    I just visited Boston for the first time this month and LOVED it. It made me think of Philly done right! All the history, none of the trash!
  12. strider42 macrumors 65816


    Feb 1, 2002
    I can't wait for the housing bubble to burst, at least a little. Here in the SF bay area, its just insane. a house in a crappy part of oakland is like 400k. I asve my money well and figure I'd have enough money in a few years for a 20% down payment on a house of about 400-500k, but I'll have a hard time getting a loan for the remaining amount cause its just so much money and I don't earn that much. And besides that, 500k doesn't get you that much around here anymore. If it bursts, other people's loss will be my gain as I'm positioned well to be able to buy should it happen. Counter intuitively, I'll be better of when interest rates go quite a bit higher. But I'm limited right at the moment. Maybe I should just keep renting.
  13. x86isslow macrumors 6502a

    Aug 10, 2003
    :( my folks are moving from the boston area down to the philly area. hope its not too bad. i know my dad had sticker shock when he compared the realtor's valuation for our current house with those in the market down there
  14. Chip NoVaMac macrumors G3

    Chip NoVaMac

    Dec 25, 2003
    Northern Virginia
    Not the first time he has spoken on this issue.

    While I agree with you, lets try to keep this out of the Political Forums. As hard as that might be. The tax cuts have only benefited the wealthy in our nation. The gas price rise is benefiting those that can afford to bet on the future of those that can't.

    Those that have been able to "gamble" on the future with their homes and stocks; were warned by Greenspan this past week - that the gravy train can not last forever.

    The difference is that when Greenspan speaks, people listen. His words have been right on, like it or not. Maybe not as dire as he said - but still on target.

    His shoes will be very hard to fill.

    And the very reason that I am happy with the Republicans in restricting my rights to share my life with another man.

    For me, I split with a lover of 12+ years, with only $14K worth of his debt that I had to pay off.
  15. savar macrumors 68000


    Jun 6, 2003
    District of Columbia
    It's surprisingly poor for a Yale Law student.

    But, yes, the poster probably didn't read the thing carefully. I see nothing scary about it. It's really just an indictment of the credit industry and American views on bankruptcy, not a critique of American financial habits.
  16. Counterfit macrumors G3


    Aug 20, 2003
    sitting on your shoulder
  17. Xtremehkr thread starter macrumors 68000


    Jul 4, 2004

    No, Greenspan only called people unrealistic about their expectations. Aside from that, I think I did little other than present the article.
  18. Xtremehkr thread starter macrumors 68000


    Jul 4, 2004
    Greenspan can do a lot to dictate the economy, this is true. But he cannot stop the public from investing in a bubble as they did in the late 90s, or perhaps even now. More than anything, he just seems to be calling for more caution when it comes to how much debt people are taking on. Bankruptcy laws are about to change, and people are not going to be able to remove debt like they used to be able to. Considering all of the interest only loans and potential for the interest rate to continue rising, there may be a problem if people do not become more realistic about how much debt they feel they can safely take on.
  19. Xtremehkr thread starter macrumors 68000


    Jul 4, 2004
    I agree, I cashed out in Huntington Beach and moved to a cheaper market. In the last month, the inventory of available houses has more than doubled. New houses are still being sold at record rates, but anyone who lives in an expanding city realizes the advantages of living close to where you work. Besides that, around here, an older house comes with a lot that can be up to half an acre. Buy low, sell high.

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