Tuesday, January 25, 2011

Roubini : The housing sector is double dipping

Roubini : ...".....Well, my view on housing is that actually the housing sector is double dipping. Of course you can find a buy at a price much lower than listed, then it is a buy. But if you're looking at the macro data, where in the spring of last year, a time where prices were going up and demand and supply was increasing, but that was all driven with the fact with these first-time homebuyer tax credit.
So anybody who wanted to by a home, bought it by April. As soon as their tax credit expired, demand collapsed, prices started to fall again. So demand is falling, supply is increasing because there is a shadow inventory of millions of not yet foreclosed homes. Therefore, prices are going to fall even further.
So if there is one sector of the economy I would say that is already double dipping, that certainly is the housing and real estate sector. So unfortunately, what is locally working might not be at a macro, national level still working....."
in www.forbes.com

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