Westchester Business Journal has published a story on the real estate market outlook from the point of view of agents, and I was among those quoted.
I see quite a few parallels of the current market with the last crash in the late 80’s and early 1990’s. Back then we also had a banking crisis (the Savings and Loan Crisis, which saw the failure of over 700 thrifts and the end of the FSLIC), a housing crash, and a financial crisis which resulted in a severe recession. Locally, it took us until the mid 1990’s to regain home values to where they last peaked in 1987.
Our current recession and market decline now is far more severe. Whether this takes longer to recover from is a big question, and, indeed, whether we are past the nadir is also unknown. When we do recover my sense is that it will be a long flat period, because too much damage has been done to consumer confidence for there to be any rush on the proportion of the early 2000s.
Policy makers will be wise to avoid any rules which create a hot market again- it is clear to me that two huge crisis in less than 30 years prove that the consequences of irrational exuberance are all too easily forgotten when the money is “easy.” Frankly, we got spoiled. We should not allow ourselves to be fooled again. We need better monetary policy and far-FAR- better oversight of the financial industry to avoid a third meltdown.