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Articles
Housing: A Good Long Term Bet, VHF
Has anything happened to change the long-term structural dynamics around residential investment? Not really. There are more efficient building techniques, and the overall size of structures is likely to diminish, but the demand for residential fixed investment is driven by the population’s housing need. Population grows, existing housing stock ages, bylining costs come down, and new capital pours in as part of a virtuous cycle.The current challenge of the housing market is that the alignment between supply and demand still is not set. Demand is suppressed because of the weak employment market and frozen lending channels; supply is too strong because of the overhang of building during the housing boom.Each quarter the housing market regulates a little bit more, and a recovery in the housing market is not that far away.
By Dan McAarthy, Sept. 13, 2010, Viral Housing Fix
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Now Is/Is Not the Time to Buy a House, NPR
Economist: Now Not The Time To Buy A House
Economists are divided on whether buying a house is a good move in the current market. Host Guy Raz talks to economics blogger Barry Ritholtz, who thinks prospective buyers need to watch out. He says prices could drop another 10 to 15 percent.
Professor: Now Is The Time To Buy A House
Host Guy Raz talks to Karl Case, a professor of economics at Wellesley College and inventor of the Case-Shiller housing price index, about whether it's a good idea to buy a house in the current real estate market.
npr.org, Sept. 11, 2010, All Things Considered
Link to audio story
Beware Demands of Ultra-Rich Clients, Barclays Says, BB
The ultra rich saw their wealth rise by almost 22 percent in 2009, faster than other millionaires’ 19 percent returns, according to a June report by Capgemini SA and Merrill Lynch. The report attributed the higher gain to a “more effective reallocation of assets.”
The world’s richest clients often come with “impossible demands,” push margins down and cause internal conflict with investment banking colleagues, said the vice chairman of Barclays Plc’s wealth management unit.People with at least $30 million to invest, known as ultra high net worth individuals, insist on paying less for services, Gerard Aquilina of Barclays Wealth, told a conference in Zurich. They also ask for credit to invest in property, which may not generate private banking fees, and demand help with getting children into schools or last-minute concert tickets, he said.“Beware of the complexities of dealing with ultra high net worths,” said Aquilina, who until 2006 was chief executive officer for the Americas at HSBC Holdings Plc. “Demanding and often unreasonable” requests may create “impossible demands on the organization,” he said.
By Warren Giles, Sept. 2, 2010 Bloomberg
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Volatile Housing Market Baffles Homeowners, NPR
Tax credits for buyers, mortgage help for homeowners and new rules for lenders haven't stopped the slide in the housing market. Some economists argue the best way to balance the market in the long term is to let it crash in the short run. Many homeowners and prospective homeowners are unsure if it's time to buy, to rent, or to wait.
Guests
Mark Zandi, Moody's Analytics
Amy Bohutinsky, Zillow
David Streitfeld, New York Times
Radio interview recorded on NPR's Talk of the Nation, 09/07/10
Link to audio story
In Defense of Home Ownership, NYT
It’s hard to read the headlines and not conclude that becoming a homeowner is a terrible idea...as with stocks and the weather, it is dangerous to assume any certainty in the housing market. And by wallowing too much in the misery of others, people looking for a new place to live run the risk of thinking every home purchase will end in regret, at least financially. Many still could, if they buy in hard-hit areas where prices could fall further. But a mortgage is still a form of long-term forced savings, after all. This is more important than ever, since fewer people have access to generous pensions than they did during the last big housing slump. A 401(k) or similar plan is no bargain, either, with its erratic returns and employer matches that come and go as the economic winds shift. Social Security is also likely to be less generous, and Medicare will probably cost more. Besides, owning a home isn’t just about what shows up on a net worth statement — something that bears repeating after all the “investing” that people thought they were doing when buying homes over the last 10 or 15 years. Many of these more qualitative factors, from living free of a landlord’s whim to having access to a good school district or retirement community, haven’t changed and probably never will. It is possible, as a homeowner, to make very little money but still buy plenty of happiness. So before you swear off real estate, reconsider a few of the basics.
By Ron Lieber, August 27, 2010 NYT
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