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Non-Tech : Investing in Real Estate - Creative Opportunities
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To: tejek who wrote (1624)5/25/2013 11:22:04 PM
From: John Vosilla  Read Replies (1) of 2722
 
"You build a house, you're adding $300,000 to the capital stock," Case said. "That's a lot of GDP just in the direct effect of housing starts. It's been the perfect instrument of housing policy."

Yep another part of the equation as to why the economy can't jump start as fast as everyone wants. The multiplier effect of new construction ripples through so much of the economy. Think about it coming out of the last financial crisis 1990-91 it was slow going for a good 2-3 years more years in large part due to subpar housing starts and tight lending. Coming out of the tech crash, 9/11 and corporate capital spending freeze into 2003 real economy took several years to come back and only then it was due to record home construction, easy financing and the RE price appreciation bubble already in place. This time will be a bit different since J6P being left high and dry from tight credit, lackluster job growth and another casino type atmosphere quickly building without his participation?.. He is out of stocks, he is now missing housing, the crucial component for him too. Tough to build equity especially when your paycheck also lags inflation.

"There is momentum in the housing market," Shiller said. "Momentum suggests increases in the next six to 12 months." Longer term, he added, "I'm not so optimistic. It's not going to be another big up and down."

Why doe Shiller say this bad? You want stable slowly rising prices. Instead I fear another huge bubble in 2-3 years if current policy keeps up. Seems we are already there in some prime coastal submarkets
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