Tuesday, August 12, 2008

Former Treasury Secretary on Housing Outlook

Former U.S. Treasury Secretary Larry Summers on housing:
Several sources of evidence suggest that house prices will fall for some time to come, perhaps by 10 per cent or more. Big further declines would be necessary to restore their traditional level relative to rents, incomes or the price of other goods. There are growing signs that rates of default and foreclosure will rise considerably even well outside the subprime sector.


  1. Sounds a lot like "real estate values will rise forever!", except in reverse.

    Bubbles. They're funny.

  2. It is the "100th Monkey Effect" in action.


    Well, actually, Neil is the 100th Monkey.

  3. "10 per cent or [40 per cent] more"