Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (150524)	2/10/2002 5:14:04 PM
From: Cactus Jack	Respond to of 436258

Housing Bubble? msnbc.com <<Morris at HSBC, by contrast, is more worried. In a report entitled ?The U.S. Real Estate Cycle: The Other Bubble?? he presents evidence in the form of ratios comparing real-estate values to income. That, he argues, is akin to a ?price-to-earnings? ratio for the housing sector, giving a good idea of how pricey homes are relative to Americans? earnings. By his calculations, one version of the ratio now stands at about 1.6, meaning homes are historically very expensive when judged by how much people are earning. The level is about equivalent to the high reached in 1989, the year before the last prolonged drop in inflation-adjusted home prices. In much of the 1960s and 1970s, the ratio usually hovered at around 1.2. Moreover, Morris says the high cost of housing today is being masked by extraordinarily low interest rates, which allow consumers to lower their debt burdens and afford more expensive homes than they?d otherwise be able to buy. An uptick in interest rates this year ? which he expects ? could ?cause the housing market to tip over.>> jpgill