Bernanke - Recovery will be slow...and housing prices (incentive, mortgage rates, mortgages)

[Kootr]

Bernanke - Recovery will be slow...and housing prices will likely fall another 10% - 15% or more.

[jmking]

They better drop the property tax then! This is going to be a big issue in my area. I can see it now "yes your house has dropped in price by $100,000, but, lo and behold, your land prices have increased $100,000." Aint that something!

[Mjames]

Originally Posted by Kooter

Bernanke - Recovery will be slow...and housing prices will likely fall another 10% - 15% or more.

Kooter, I'm curious. When did Bernanke make the statement about housing prices likely falling another 10% - 15%? I can't find information on when he made that statement.

By the way, I came across this interesting tidbit about Ben Bernanke while I was searching for the other statement:

"Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve."

This was from an Oct. 27, 2005 Washinton Post article.

Thanks!

[heydade]

Here in South Florida, prices will decline another 17% by this time next year before we hit bottom and then it will STAY FLAT for at least 5 years. There is not going to be any run up in prices.

[Kootr]

In the Q&A at the Economic Club of New York where Bernanke spoke he (Bernanke) did not deny (or refute) that housing prices could drop another 10% - 15% or more when asked a question in which the economist stated his opinion about same. There was little doubt that Bernanke did not disagree with the statement.

[texasangel]

No Quick Fix for Housing Prices - WSJ.com

"But some economists say the government needs to do more to address the underlying problems that triggered the credit crisis. "It's very disappointing" that the plan doesn't do anything "to stop the spiral in home prices," which is reducing net worth and creating a falloff in consumer spending, says Harvard University economist Martin Feldstein. He proposes that the federal government offer low-interest loans to replace 20% of homeowners' mortgages."

"Rates on fixed-rate jumbo loans currently average 7.91%, according to HSH Associates, more than a full percentage point above rates on conforming loans eligible for government backing, which jumped nearly a third of a percentage point Tuesday to 6.6%. But fundamental problems remain. The supply of homes on the market remains stubbornly high, while demand for those homes remains relatively weak. Home builders, including Stuart Miller, chief executive of Lennar Corp., are lobbying for a $15,000 to $20,000 tax credit to spur demand, saying the $7,500 credit passed by Congress in July has failed to jump-start sales."

"Chris Mayer, vice dean of Columbia Business School, says the government should push mortgage rates down to 5.25% in order to spur demand. Prof. Mayer has proposed that the government refinance homeowners who live in their homes, can document their income and show they can afford the new mortgage."

[Southside Shrek]

Some homebuilders in Great Britain are guaranteeing their Buyers against a drop in value for a 3 year period. In other words, if the Buyer resells the house within a 3 year period and takes a loss, the homebuilder will eat it under its guarantee.

We need a government guaranteed bottom in housing. Maybe McCain will boldly announce it tonight.

[KCfromNC]

The government can do that easily by raising the minimum wage. Guaranteeing the value of houses at a level that's not affordable to house buyers isn't a solution to anything.

[fairmarketvalue]

Originally Posted by KCfromNC

The government can do that easily by raising the minimum wage. Guaranteeing the value of houses at a level that's not affordable to house buyers isn't a solution to anything.

Not affordable to "WHO"? There are ALL price ranges of homes available from below $100,000- to over $10,000,000 so whats the point? People need to buy what they can afford, not what they "wish they could afford", just because the one they wish is "not affordable" to them. And they also need to have at least a 20% donw payment towards "whatever" that affordability is!

[middle-aged mom]

Originally Posted by Southside Shrek

Some homebuilders in Great Britain are guaranteeing their Buyers against a drop in value for a 3 year period. In other words, if the Buyer resells the house within a 3 year period and takes a loss, the homebuilder will eat it under its guarantee.

We need a government guaranteed bottom in housing. Maybe McCain will boldly announce it tonight.

Private incentives/guarantees versus Government subsidies......