Greenspan Speaks
Hi,
Alan Greenspan, former Fed Chairman, spoke a couple of weeks ago at the Bond Market Association 30th Anniversary Dinner. His remarks included his take on the housing market. Here is a blurb from the LA Times regarding that speech.
May 20, 2006
Former Federal Reserve Chairman Alan Greenspan said Thursday that Americans’ consumption could taper off somewhat now that the U.S. housing market’s “extraordinary boom” has ended. Greenspan, in his first public U.S. speech since retiring in January from a storied tenure leading the Fed, predicted there is no danger of a total collapse of the housing market. His comments come on speculation the Fed could pause its cycle of rate hikes as a housing slowdown feeds a cooling of the U.S. economy.
“This has been quite an extraordinary boom,” Greenspan said in remarks at the Bond Market Association’s 30th anniversary dinner in New York. “Home sales are off, applications are off, everything is going in the same direction. The boom is over, and you can say that with a fairly strong degree of confidence.” Greenspan said he doesn’t see home prices falling on a national basis, but instead in certain areas of the country. He warned reduced access of Americans to equity loan extraction would have an economic impact, which has had an “important effect” in stimulating the economy. The housing market has been one of the economy’s biggest economic drivers, racking up record-high sales five years in a row. Rapid appreciation in home prices has helped power consumer spending, boosting the economy. [LA Times]
We have constantly blogged on general analysis that points to the same comments that Mr. Greenspan made. When people talked of a bursting bubble, we pointed to data that suggested more of a slow deflation. Yes inventories are up, prices are slightly down, and days on market is longer than six months ago. But factor in all the positive economic factors for our metro area, and we still believe it won't be long before we see some balance.
Adam Tarr, ePRO
Sharon Kotula, ABR
Your Phoenix Area Real Estate Source
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Scottsdale, AZ
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