Tuesday
Jun172008
All things local, foreclosure crisis up close
Tuesday, June 17, 2008 at 4:13PM
By watching the news most Americans believe that there is a real crisis in the foreclosure market. This is not the held belief though of Charles Calomiris who is currently serving as a visiting scholar at the American Enterprise Institute (AEI).
Discussing whether the effect of foreclosures on housing prices has been overstated, Calomiris railed against foreclosures to start. “Foreclosures also waste resources because the vacant homes deteriorate or are vandalized. These are also problems for the lender, which is frequently holding the title to the home until it could be sold.”
Calomiris was joined by others from AEI who joined with him in their assertion that the foreclosure crisis is not as serious as some critics have stated. One voice that strayed from the pact was that of Mark Zandi who believes that foreclosures on homes should be attributed to the impact on home prices. “There is a correlation said Zandi.”
Calomiris, who is known as a professor of Financial Institutions at Columbia Business School, posed the question: “foreclosures really have small efforts on prices, they make prices go down but what is the big effect?”
If anything that was agreed upon it was that there is currently no national system to gauge the foreclosures market. Calomiris summed it up when concluding the discussion by stating “housing is a local market.”
Discussing whether the effect of foreclosures on housing prices has been overstated, Calomiris railed against foreclosures to start. “Foreclosures also waste resources because the vacant homes deteriorate or are vandalized. These are also problems for the lender, which is frequently holding the title to the home until it could be sold.”
Calomiris was joined by others from AEI who joined with him in their assertion that the foreclosure crisis is not as serious as some critics have stated. One voice that strayed from the pact was that of Mark Zandi who believes that foreclosures on homes should be attributed to the impact on home prices. “There is a correlation said Zandi.”
Calomiris, who is known as a professor of Financial Institutions at Columbia Business School, posed the question: “foreclosures really have small efforts on prices, they make prices go down but what is the big effect?”
If anything that was agreed upon it was that there is currently no national system to gauge the foreclosures market. Calomiris summed it up when concluding the discussion by stating “housing is a local market.”
"The Great Recession" Has Ended, Says Economist
“The recession is over,” said Dr. Mark Zandi, Chief Economist of MoodysEconomy.com, Monday afternoon at the National Governors Association’s winter meeting. The closing plenary statements were hopeful in regards to the economy and the increase in jobs.
The economy has begun to grow and the loss of jobs should end after one more month, according to Zandi. The increase of the Gross Domestic Product by four percent in the second half of 2009 will act as a gateway to not only more jobs, but the continued stabilization of the economy as a whole, he added.
“The coast is not clear, at least not yet,” said Zandi with regards to the economic standing.
While the tide is slowly starting to turn with the job market, there is still a lot of work to be done in terms of the housing market, which is a major factor in our nation's economic standing, said Zandi.
The housing market will take much longer to rebound in comparison to the job market. The amount of foreclosures that have recently flowed into the real estate market will be what keeps the housing market depressed and what keeps local tax revenue constrained, Zandi said.
“Even when we are on the other side of this great recession...when the economy is growing again your troubles will not go away,” said Zandi to the panel of Governors on the issue of state and local revenue growth.