Dean Baker
Dean Baker
Dean Bakeris an American macroeconomist and co-founder of the Center for Economic and Policy Research, with Mark Weisbrot. He has been a senior economist at the Economic Policy Institute and an assistant professor of economics at Bucknell University. He has a Ph.D. in economics from the University of Michigan...
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People are willing to pay them because there is an expectation that prices will continue to rise. Once people don't have that expectation, things will change.
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I've always thought you'll have the movement in price before you'll see it on quantity side, ... As long as the price remains high, if you're a builder, you want to get the houses up in order to cash in.
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We're building at a 2 million-a-year pace, which is more than demand, and we're going to keep building at that pace until home prices correct, ... It's already showing up in the rental market, oversupply is pushing down rental prices.
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Hawaii's home prices suffered in the 1990s because of economic trouble in Japan, ... If home prices in California reverse, it will have ripple effects.
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I wouldn't necessarily predict this would be a trigger, but I wouldn't rule it out either. It wouldn't surprise me if you see money leaving the secondary mortgage market, leading housing prices to fall.
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The optimistic scenario gives you about 2 million jobs next year -- about 180,000 a month. If I had to make my best bet, I'd say we'll have level home prices and growth of about 1.5 percent for the year. There'll be job creation of about 80,000 or 90,000 a month.
home prices run
There has never been a run up in home prices like this.
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Normally when you talk about housing bubbles bursting, you're talking about a specific local market. But we've never had a nationwide run-up in home prices like this. I don't think it's realistic to think the decline won't also be national. I think a 15 percent nationwide decline is very plausible. In many bubble areas, could be looking at 20-25, maybe 30 percent declines.
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Historically, rent prices and sale prices have moved together.
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Home and rental prices will come back together by home prices falling. I don't think landlords will be in any position to raise rates too much.
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Home prices are going through the roof, forcing people to turn to exotic loans and unorthodox financing. These people have no room for error.
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If home prices level off, that can knock down growth by 1 or 2 percentage points, from 3.5 percent to 1.5 percent.
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These monthly numbers are very erratic. It can be that this is a sign (of the bubble bursting), but I would never make too much of one month's number. Especially since the other timely data we get, the mortgage applications for home purchases, have still been pretty high.
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is kind of (the oil companies') good luck. They didn't do anything to earn it. And we're sitting here with a $150 billion bill from Katrina.