“So far, prices have dropped only slightly. But it was enough to cause alarm around the world,” he said. “Prices are going to fall much lower yet.”
Man, I wish I had his crystal ball.
Problem is, he knew this along time ago (as did anyone who was truly paying attention). And yet he failed to warn or do anything about it, except make the problem worse. They don’t call him Alan “Bubbles” Greenspan for nothing—GGG
I don’t think you need a crystal ball. Housing prices always lag behind starts and sales. So when sales soar, prices follow after a while. When sales plunge, prices follow after a while. Sales have plunged over a year ago. Prices didn’t start to plunge until recently. We are just beginning to see the movement down in prices.
Most sellers seem to be adjusting their prices down slowly and gradually, but are still not selling their homes. It remains to be seen what the actual selling prices of all the homes in existing inventory will be. I have seen huge reductions in prices of new homes sold by builders, and this will have an impact on existing home prices, but so far sellers have been reluctant to let their homes go for those prices, or they HAVE TO HAVE more money to come out even.
I don’t think it will take a crystal ball to predict that home prices are still declining overall nation-wide. It is just the natural outcome of a plunge in sales. Sales have fallen off a cliff.
The media is crazy about Greenspan's crystal balls but that's their problem. Of course prices will go much lower, and they'll go much higher too because prices fluctuate.
Greenspan ignorance shows up in his timing, or lack thereof, like when he whined about "irrational exuberance" at the beginning of years of bull market growth, but all during the dot.com mania all he cared about was that silly killer Y2K scam that was supposed to end all life as we know it.
Sir Alan just isn't all he's cranked up to be.
No crystal ball needed. You just have to look at the number of resetting ARMs for the next five years. The loan to value disparity has been obvious and growing since 2003.
http://attheselevels.com/archives/678-The-Forgotten-Resets.html