Friday, August 06, 2010

Two stories in this morning's papers and the future of house prices

Firserve says that house prices will not regain their previous peaks in the sand state until 2025, and it will be even longer in places like Stockton.

This could well be right, except that I infer that Fiserv is looking at nominal house prices, whose dynamics are driven in part by the underlying general price level. As the New York Times notes this morning, Jan Hatzius predicts falling general price levels; Richard Berner says they will rise--if Hatzius is correct, it will of course take longer for house prices to return to the past peak; if Berner is right, it will take less time.

2 comments:

Unknown said...

I think it would take some time to get back to normal position for real estate pricing. However, I still don't believe that it is going to take so much of time; 2025 is pretty long time.
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Unknown said...

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