Housing Crisis or Numbers Taken Out Of Context - You Decide
August 8th, 2008 Categories: Real Estate Market Trends
I ran across a pretty neat video over on CNBC.com from their Business Nation segment. Financial commentator Dennis Kneal argues that the so called housing crisis in America is no crisis at all. And he has some very compelling numbers to back up what he is saying.
He runs through some statistics that show out of 140 million homes in America, only about 4 million are at risk of foreclosure. He goes on to make an interesting point that I happen to agree with. The real problem is a 53% aggregate run-up in home prices since the year 2000.
That just ain’t normal folks and a correction had to occur. Is it a problem? Yeah. Especially if you are trying to sell your home in a correcting market and only purchased it a couple of years ago. It it a crisis? I’m not so sure that’s the right description.
What we are experiencing on a national level is a very normal market correction. The “invisible hand” that Adam Smith wrote about in his classic, “The Wealth of Nations” is at work doing what it always does.
Of course all real estate is local and the Raleigh real estate market never saw a 53% run-up in home prices. As a matter of fact we saw no run-up at all. We’ve been chugging along at 3-5% annually just like any normal, healthy real estate market should.
Check out the video by Dennis and let me know what you think.
