"In examining the hottest markets for home price appreciation, we see a rolling boom moving from one metro area to another over time, as well as a spillover effect into nearby areas with lower home prices”David Lereah is correct about the idea of a 'rolling boom. After this unprecedented housing bubble there will be significant price declines in the bubble markets. The soft landing scenario is not in the cards. A 20 - 30% inflation adjusted price declines will occur in most of the bubble markets.
“That is spreading the wealth of housing returns, with a natural easing of appreciation in areas following a period of extraordinary price growth. Even after slowing in a given area, prices typically have continued to rise faster than historic norms."
Sunday, October 09, 2005
David Lereah's Recent Statements
David Lereah, chief economist of the National Association of Realtors® recently said ( as reported by the Chattanoogan):
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The 'rolling boom' is a correct comment in that the bubble started in the major bubble markets ( LA, San Fran, LV) then fanned out to smaller markets like Reno and Bakersfield etc.
ReplyDeleteHowever, the boom in 'bubblette' cities ( Bakersfield) is over as well.
The bust has begun. Stagnation and small price declines are now the norm.