Wednesday, September 13, 2006

Senate Banking Hearing Statements

Here are the statements from the Senate Banking Hearings:
David Seider sees the crash bottoming out middle next year:
The downswing in home sales and housing production should bottom out around the middle of next year before transitioning to a gradual recovery that will raise housing market activity back up toward sustainable trend by the latter part of 2008.
He also acknowledges that prices may drop:
National average house price appreciation is likely to be quite limited in the near term. Indeed, some decline is a distinct possibility, and the rate of price appreciation should remain below trend for some time.
But as we move along, we start getting into deeper waters:
However, much of this negative impact should be offset by strengthening activity in other sectors of the U.S. economy, keeping GDP growth reasonably close to a sustainable trend-like performance.
Let me paraphrase: Housing is out of gas, and something else needs to step up to the plate and carry us for a while. It's easy to say, but hard to do, considering how much overall impact the housing boom has had on jobs, wealth, and growth.

He makes an interesting prediction:
It’s likely that the bulk of the downswing in home sales and housing production will occur this year, with market activity stabilizing around mid-2007 and moving back up toward trend by late 2008.
Again, let's paraphrase: The bubble has popped, like everyone said it would. But, the recovery will only take a year or two. Put a star by this one, I have a feeling we'll be adding it to the quote list later on.

More soon...