Monday, April 04, 2005

More on Housing Speculation

by Bill McBride on 4/04/2005 02:49:00 AM

My most recent post is up on Angry Bear.

Housing: Speculation is the Key

Although my post on Angry Bear is about speculation and the housing bubble, I am mostly concerned with the impact of a housing slowdown on the general economy. Here is my thinking process:

1) Is there a bubble? Yes.
2) If there is a bubble, how widespread?
3) How and when will it end?
4) What will be the impact on the general economy (and the trade deficit, and interest rates)?

Click on Graph for larger image.

This graph is part of the answer to "how widespread?" The graph shows home appreciation, in both nominal and real terms, over the last 5 years by region (and the US total). In some of the Central areas, there has been very little appreciation, but I would still be interested in leveraged financing and Mortgage Equity Withdrawal numbers in those areas.

Best Regards to All!