Aren't there some benefits to the working class for people to be able to buy
houses for less ?
Charles
^^^^^
by Devine, James
July 25, 2004
GRETCHEN MORGENSON
Housing Bust: It Won't Be Pretty
LET the stock market slide. Let the bond market sink. As long as home prices
keep rocking, it's easy for Americans to feel fat and happy.
But what happens when the run-up in housing prices loses steam, or worse?
The implications are sobering, not only for homeowners but also for the
economy as a whole.
With the growth rate for home prices starting to slow, now may be the time
to ponder what a bear market in real estate may bring. A recent study by two
economists at Goldman Sachs provides some answers.
For now, prices are still climbing over all. The average home price in the
nation rose 7.71 percent in the 12 months ended in March.
But the first three months of this year showed far slower growth than
previous periods. Prices rose only 0.96 percent, according to the Office of
Federal Housing Enterprise Oversight, which keeps an eye on Fannie Mae and
Freddie Mac. The last time housing prices grew by less than 1 percent in a
quarter was in the spring of 1998.
More ominous, six states showed declines in housing prices in the first
quarter: Vermont, Alaska, North Dakota, South Dakota, Iowa and Nebraska. No
state had price declines in the previous quarter.
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