21
Feb

Housing prices are falling is the US. Where else?

Escrito el 21 Febrero 2007 por Juan Toro en Financial Markets

Despite a wide consensus of housing overpricing (real state in general) almost in any national market, prices seem resilient. Contrary to expectations we have hardly seen any significant price correction recently. In mid 2006 Nouriel Roubini from New York University declared:

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Ang 3 Marzo 2007 - 00:41

I hope it won’t be us. As Spanish economy is widely based in real estate, price droppings would affect seriously the welfare and the families economies seriously.

We live in an indebted country, many householdings asked for a loan over what they would usually be able to afford fue to the low interest rates. If rates rise, and prices drop, we will face a huge economical problem.

But it won’t be nothing compared with the crisis we will face if the big real estate companies, indebted to their limit, begin to see the prices of their products drop and could not afford to pay back their loans.

What do you think is the more realistic scenario for the next years?

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