Sorry, it wont let me post this blog with the article imbedded into the title so here it is: http://finance.yahoo.com/tech-ticker/housing-bulls-are-%22not-paying-attention%22-to-the-facts-says-dean-baker-483703.html?tickers=xhb,^dji,^gspc,xlf,tlt,tbt
I was just browsing the news on yahoo and i saw a headline saying "Expert: Housing optimists wrong", and i thought of what we were talking about and about the video we are currently watching. It's a pretty short article but economist Dean Baker talking about his opinion on our housing situation. Apparently people are saying that housing purchases will rise soon. However, Baker says otherwise. He believes that "...we're going to see a big fall-off in purchases for the rest of 2010 and even into 2011."
What do you guys think? Is there any chance of housing property values to increase anytime soon?
I was just browsing the news on yahoo and i saw a headline saying "Expert: Housing optimists wrong", and i thought of what we were talking about and about the video we are currently watching. It's a pretty short article but economist Dean Baker talking about his opinion on our housing situation. Apparently people are saying that housing purchases will rise soon. However, Baker says otherwise. He believes that "...we're going to see a big fall-off in purchases for the rest of 2010 and even into 2011."
What do you guys think? Is there any chance of housing property values to increase anytime soon?
5 comments:
This is a very good and relevant article. The housing bubble was indeed a hard hitter and I think that investment banks will never go back into the sub-prime market. This downhill slide all started with a simple rumor that destroyed Bear Stearns. If another investment bank starts investing in sub-prime markets, the cycle would just start again, resulting in another avalanche.
If banks want to keep making money, these institutions should stop impeding in the sub-prime markets and stay in secure derivative markets.
I agree with Yoda on the point that banks should stay away from sub-prime markets, but if I remember correctly, we discussed in class why they were even involved with them in the first place. Since banks are constantly borrowing money from each other, they have to be able to provide insurance for these loans.
I think that the housing market is going to make (if it is not already in the process of doing so) a turn for the better at a slow pace as the economy as a whole starts to improve.
I agree with everyone here; that banks aren't going to go back to the way they were. I don't think we are going to see a dramatic decrease in property values. They may get better in the future, and become more affordable. But perhaps not to the point where people can purchase a home on their own.
I believe that the housing market will continue to be low but will steady regain its value. I agree with everyone here that sub prime mortgages are very dangerous and banks should stay away from them and only loan to those who could afford them. Banks probably won't back to the way they were and lets hope it stays that way.
I agree with Yoda that the "housing bubble was indeed a hard hitter and I think that investment banks will never go back into the sub-prime market." From the first day that Mr. Silton started teaching us about subprime mortgages I new they seemed "fishy" and thought they were a bad idea. Too bad the banks didn't. Obviously if 3 out of 10 people fail to pay their mortgages, that's a semi big hit. But what the banks didn't account for was that if they mulitplied it by 10 then it would become 30 people failing to pay their mortgages out of 100 instead of the number of people who couldn't pay being reduced, the percent is still the same.
Also what I think most people don't know is that the government handled the government wasn't necessarily bad. If they didn't do anything, things could have turned out much worse than they are today.
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