Investors and others are engaged in a spirited debate as to whether the U.S. housing market resembles a bubble about to burst. With stock equities tumbling, many Americans have chosen to put their money in property adding to inflated home prices. Perhaps only time will tell if they have been right. But there’s no denying prices are soaring.
In fact, while the hottest markets kept soaring, the report from the realtor’s association didn’t show major price gains for all parts of the country. Price increases slowed in cities like Minneapolis-St. Paul and Dallas, especially in the markets for high-end properties priced above $1 million. Realtors in certain markets say properties have started taking longer to sell and that some owners are dropping their selling prices.
Analysts note that real-estate markets tend to peak two or three years after a stock-market peak.
Source: Patrick Barta, Housing Prices Soar, Fuelling Bubble Fears, Wall Street Journal, August 14, 2002.
For text (WSJ subscribers) http://online.wsj.com/article/0,,SB1029269911436918675-search,00.htm
For more on Economic Growth http://www.ncpa.org/iss/eco/
FMF Policy Bulletin\20 August 2002
