[lbo-talk] The Housing Market's Last Gasp

[Doug Henwood]

Merrill Lynch estiamtes that a flat housing market would knock about 
1% off GDP growth. Other estimates are a bit bigger, maybe 2%. Since 
we're now around 3.5%, that's still above 0%. It would probably take 
a bigger hit out of consumption than other elements of GDP.

People who've bought r.e. for spec purposes could take a bath even on 
a flat market. For people who bought overpriced houses just to live 
in, well at least they'll still have the house.

Of course it could be worse - it could cause and/or deepen a 
recession - which is exactly what the US needs according to the 
textbooks. But I just like to remind people that a problem doesn't 
always have to turn into a disaster.

Doug

Steven L. Robinson wrote:


>If so, how would that impact those who have bought real estate for
>speculative purposes? What about those sectors of the economy that serve new
>housing construction?  The prospect of falling house prices in coastal
>California seems like a fantasy from never-never land, but isn't it almost
>as unrealistic to assume that new house construction
>would be the engine driving the larger economy? SR
>
>
>>  Steven L. Robinson wrote:
>>
>>  >The Housing Market's Last Gasp
>>
>>  It could just go flat, like the UK and Australia.
>>
>>  Doug
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