Builder - February 2009 - (Page 19) BMAIL bring tranquility to our markets and somehow slow down unemployment. Mr. Shiller expects another 10 percent drop from our current situation. That would bring us to levels of July 2003, which I believe is a fair bottom. 2000 price levels are way too low to be realistic. [I expect] the price composite of the 20 cities [to] be around 141 by July 2009, which will be equal to 2003 levels. Hopefully that is the bottom, and we can shift our thinking from crisis to recovery. The crisis started with the housing bubble, so it should end here within the housing prices. That is why it would be unrealistic to assume that it will be 1990s levels. I believe even 2000 levels are just way too low. Anyway, let’s hope prices bottom in July 2009. Posted on BuilderOnline.com in response to Boyce Thompson’s blog post “Calling the Bottom with Affordability Metrics” Reverse Equity way to stimulate T he most obviouswith new-home conthe economy is struction. However, supply and demand will not allow it. Until they fi x the supply side by fi xing the foreclosures, there will be no growth and obviously the economy will take longer to recover. It amazes me that at every downturn in the housing market, the forecasters say, “Yeah, but the economy is still strong.” Then, six to eight months after the housing crash, the economy crashes. And this time, it’s exacerbated by the loan situation. More speculators were allowed in. I recommend the government offer a “shared equity” with troubled homeowners or a 100 percent reverse mortgage for owners over 55 years of age. Once they die, the government gets the house. Or, if they sell, the government would get the equity for making the payments. The idea is that it would take millions of houses off the market, reducing the supply and allowing new housing starts, which would put the economy back on track. Not to mention that by not having a house payment, the money would go back into the economy. I’m also amazed that economists haven’t figured out how much the construction industry is a leading economic indicator. I’m sure this housing crisis has left more unemployed than if the Big Three were left to fend for themselves, as the construction industry always does. Posted on BuilderOnline.com in response to Boyce Thompson’s blog post “Builders Likely to Get Cool Reception in Congress” Callback I n our story “ChangingweDirection” [January 2009, page 35], incorrectly stated that OKKS Development’s initial capitalization was $500 million; it was $500,000. We regret the error. DO YOU HAVE A COMMENT OR QUESTION? E-MAIL DENISE DERSIN AT: ddersin@hanley wood.com Go to http://builder.hotims.com for more info http://WWW.BUILDERONLINE.COM http://WWW.BUILDERONLINE.COM http://www.strongtie.com http://www.strongtie.com http://builder.hotims.com
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