From The (London) Times:



US heading for house price crash, Greenspan tells buyers (http://business.timesonline.co.uk/article/0,,16849-1752866,00.html)
By Graham Searjeant, Financial Editor
August 27, 2005

WALL STREET shuddered yesterday after Alan Greenspan, the United States’ central banker, warned American homebuyers that they risk a crash if they continue to drive property prices higher.

He said that the US house-price spiral had become an economic imbalance, threatening stability like the country’s trade gap or its budget deficit.

In a pre-retirement speech to fellow central bankers at Jackson Hole, Wyoming, Mr Greenspan said that people were investing in houses as if they were a one-way bet, not allowing for the risk of price falls. He said “history had not dealt kindly” with investors who kept ignoring risks.

> more (http://business.timesonline.co.uk/article/0,,16849-1752866,00.html)

He's only about six months late -


Frothy? yeah right Greenspan.........

Sounds like we should sell the house now, live in an apartment for a year or so and then buy a house again once the dust settles. :noldus:

Many people are trying to do just that especially on the coasts & Vegas - that's why the markets are becoming flooded with new listings and buyers are getting a larger variety of homes to choose from. It's almost a self fulfilling prophecy.

What's really scary is when the Interest only loans/ Arm loans kick in the and the payments go up and the value in the home has dropped - that's when people start to walk away... foreclosure time.

I think some desperate buyers and investors have speculated us into this mess - rents aren't keeping up in the hot markets, when they can't get enough rent to offset their mortgage payment, taxes and insurance, they try to sell - when there are so many other homes to choose from, desperate investors will drive the prices down. Messy, messy...

Homes really just need to be thought of as a place to live and possibly a tax write off, not a road to easy money because usually what goes up must come down as they say...

Of course, no one has a crystal ball so please don't take anything you read on the boards as investment advice....