WTOP radio here in D.C. this morning quoted Stephen Fuller (GMU Center for Regional Analysis) as saying the region's housing market was "tipping in favor of the sellers." There were no qualifiers on the remark, as far as breaking down the whole region into counties.
I'm sure the sellers in Prince William county, with over a year's worth of inventory, are thrilled to hear that.
Oh, and the 10-year-treasury note yield is today the highest it's been this year.
Does anyone really believe this?
Frightful Forecast for Region's Housing Market
May 30, 2007 - 3:48pm
Adam Tuss, WTOP Radio
WASHINGTON -- The forecast for the future of the region's housing market is in -- and it looks outrageous.
If current trends continue, by 2057, the average home in the D.C. area is likely to cost more than $14 million, says Stephen Fuller, director of the Center for Regional Analysis at George Mason University's School of Public Policy.
Even more frightening is the fact that the numbers are based on the current market, taking into account the trend of home prices generally doubling every 10 years and growing by about 7.2 percent annually.
"It will take more than 11 times the average annual income to afford a home," Fuller says. "This will be a totally unaffordable region."
4 comments:
This is what I find so odd: he makes an accurate mathematical statement -- that if homes grow 7.2% compounded for the next 50 years no one will be able to afford a home -- but then concludes that this means no one will be able afford a home, not that his forecast of 7.2% growth is absurd.
"If current trends continue...".
Of course, Mr. Fuller wants us to believe that this Ponzi will keep going on forever. Of all people, this GMU economics guy should know what happened to housing prices in Fairfax between 1993--2001. Why do people tolerate such tenured frauds in universities?
Warren Buffet made a similar comment about the stock market a few weeks ago....something along the lines of that if the stock market grows at 5% per year each year over the next century then it will be at around 2,000,000 in the year 2100.
Maybe. Maybe not.
One must take into account the fact that most of the growth in stocks occurred post WW2....why? One analyst said it was because the US was on of the few places on the planet where goods could be made and sold.....everything else was destroyed during the war or it it was still a 3rd world country.
Only time will tell.....one things for sure....it's boom or bust....buy low and sell high....that will never change.
Fuller is an embarrassment to the field of economics. He is suggesting that homes will sell for an ultra-unaffordable 11 times income, but doesn't explain how prices will get that high if no one can afford them. He missed the correction and is now on his last leg, trying in vain to prop up what's left of the housing market before it completely collapses. If you have any question as to why Fuller would make such a nonsensically optimistic projection, look no further than the fact that his salary is paid by local area builders and realtors. He is a paid shill.
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