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Recession? Pfft. Can't happen here.

Recs

6

February 11, 2008 – Comments (3)

That's what they say, anyway, though their own evidence seems contrary...

The panelists expect the median single-family home price to dip 3.5 percent to $422,500, and forecast that the number of permits issued for new housing units will fall 21 percent more, to 16,192.

Umm, earth to eggheads. Prices are already dropping more than 7% y-o-y around here, and you figure they'll bottom with another, slight, 3.5% drop? They more than doubled in half a decade, but they're going to stabilize at nearly that point, despite the fact that incomes haven't followed suit? Who can afford that median home around here without the funky loans? Why, with a giant overhang in inventory (especially condos) do they figure prices will stabilize any time soon?

The panelists expect local prices to increase to a degree that would pain a central banker. The median projection is that consumer prices in the Washington-Baltimore area will rise 4.2 percent this year, well above the 2 percent level under which the Federal Reserve aims to keep inflation.  

That's probably true, but they don't think it'll crimp spending to a big degree?

Part of the reason for his optimism: He sees the presidential race this year, and the focus it will put on Washington, as a clear positive for the local economy. "We'll be on the evening news every single night, with that shot of the Capitol dome and the White House as a constant reminder of Washington, D.C.," Dinegar said. "People may not think of San Francisco or Chicago every day, but they'll think about Washington."

Whew. That ought to translate into economic growth!

3 Comments – Post Your Own

#1) On February 11, 2008 at 12:35 PM, Gtrinvestor (99.77) wrote:

Nice article, but why did they have to drag the Tampa Bay Buc's into the foray?  Sure its a good example, but it was bad enough living in Tampa at that time w/out having to relive the experience through business analogies. 

Although I live in Atlanta now, I still say Go Bucs!

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#2) On February 11, 2008 at 1:42 PM, TDRH (99.66) wrote:

Don't know if this is accurate, but the median income for the area (according to Wikipedia?) is $40,127.  Without the alternative financing options a median household of $422.000 would still seem a little high.   Homes are losing their values, and costs are rising, this would generally lead to a decline in consumer spending.  What advantage is it to them to deny what would appear to be pretty obvious?

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#3) On February 11, 2008 at 3:53 PM, ValueIsValuable (79.12) wrote:

From today's Washington Post:

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/10/AR2008021001971.html

 I wonder what the new product will be that takes place of the 30-year fixed loan.... I'm guessing some kind of option on various bodily organs.

That or slave labor.  You can never have enough slave laborers.

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