Monday, September 19, 2005

After the Boom: What Term?

Many terms have been used to describe how the housing boom will end. Here is a list:


  • Hard Landing
  • Pop
  • Bang
  • "Loud Hiss" - Bubble Meter
  • "hiss" ( Paul Krugman )
  • "fizzle, not a bang" S&P Chief Economist David Wyss
  • Soft Landing
  • "permanent plateau"
  • End? Double digit price appreciation forever - Crazed Speculator

I am sure many other terms have been used to describe how the housing boom will end. The boom is over in most bubble markets. Now, most bubble markets are in a period of stagnation ( "standoff") . The stagnation period will soon give way to price declines. All these terms are interesting, but numbers are more important. Will the LA market be down 25% inflation adjusted from its peak by December 2007?

5 comments:

  1. From my experience in the Hartford CT area- Housing soared here 28% in 1987, then slowed dramatically in 1988. It began a slow decline in 1989. The decline picked up in 1990-1992, now this is 4-5 years after the peak. The declines
    where something like this.
    Peak year 1987
    1988 2-3% price rise
    1989 5-6% decline
    1990 5% Decline
    1991 5% "
    1992 5% "
    1993 3% "
    1994 3% "
    1995 2% "
    1996 1% "
    1997 3% rise
    1998 3% rise
    1999 3% rise
    2000 2% rise
    2001 3% rise
    2002 6% rise
    2003 8% rise
    2004 12% rise
    2005 13% rise (thus far)
    So here it was a slow hiss- that added up to a pop that was damaging for the local economy for years.

    ReplyDelete
  2. It depends who you are. If you are an economist, you can say that prices moderated or even "decreased". If you lose all your money, you call it a disaster.

    ReplyDelete
  3. Maybe a better term than "housing bubble" is "housing flatulence". Bubbles can disappear in many, many ways and do not always have an unpleasant end, but on the other hand we all know what is left behind by the term chosen above....

    ReplyDelete
  4. Really, cev, that was a naughty comment

    Judy

    ReplyDelete