Shaun Kenney | Politics and Religion in Virginia's Public Square


Thursday, March 23, 2006 Housing Market Still Hot, Cooling Elsewhere Interesting article on the current U.S. housing market: The price of homes sold in February rose to $209,000 for the nationwide median, the point where half the homes sold for more and half for less. That was 10.6 percent above the median price in February 2006. But analysts are forecasting those double-digit price gains will also moderate this year as demand slackens. In other economic news, the Labor Department reported that the number of newly laid off Americans filing claims for unemployment benefits fell by a larger-than-expected 11,000 week to 302,000, signaling that the labor market remains healthy. The increase in sales in February represented the first gain in demand after five consecutive monthly declines, the longest stretch of weakness since 1999. Economists believe that both new and existing home sales will dip by around 5 percent this year as rising mortgage rates cuts into demand. The concern is whether the decline could be more sizable than that. Some analysts are worried about that the speculative fervor in housing over recent years could come crashing down similar to the bursting of the stock market bubble in the early part of this decade. I've been of the firm opinion that the "housing bubble" does not exist. The demand for housing is still readily apparent, and the building will not stop until the market bleeds itself white. The only question is what, and when, will the housing market level off? So long as we're seeing double-digit gains elsewhere in the country, could it possibly be that the "housing bubble" is a self-manufactured crisis? Why hasn't it popped by now, given the slowdown in the economy, rising energy prices, etc.? Privately, I think we've already seen the downturn and we're on the move back up again. Of course, my telescope only reaches as far as Central Virginia, so I could be entirely wrong... but I doubt it. posted by Shaun Kenney \| 3/23/2006 12:33:00 PM \| 0 comments 0 Comments: Post a Comment Home
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