By Brian Summerfield, Online Editor, Realtor® Magazine
In an agricultural metaphor not unlike Ben Bernanke’s “green shoots” of economic recovery, Dr. Alan Greenspan said Americans are beginning to see the “seeds” of a bottom in the housing market in a keynote address at NAR’s 2009 Midyear Meetings. (Watch video highlights.) The former Federal Reserve Board Chairman kicked off the afternoon portion of the Real Estate Summit today.
Greenspan said U.S. consumers and businesses are just starting to recover from the crisis of confidence that was sparked by the collapse of financial firm Lehman Bros. and the credit market generally in September 2008. Indicators of a turnaround include a recent surge in both high-grade and junk bonds.
“We are beginning to see an increase in availability of money,” he said. “I’d like to say it’s going to continue for an indefinite period.”
A major issue that remains for the U.S. economy is housing prices, he said. If prices don’t fall more than 5 percent, the recovery should continue more or less unabated. However, if they fall further than that-and more conventional mortgages go underwater-then it could make a turnaround much more problematic.
What are your thoughts on additional declines in housing values? Do you think we’re at or near the bottom? Or will prices fall even further?