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Quote of the Day: Thornberg on Housing
“People are saying the reason prices are falling are because of all of the foreclosures, but the foreclosures are happening because the prices are falling. They’ve got it backwards. The prices are falling because they’re too freakin’ high.”
Chris Thornberg, Beacon Economics, Aug 27, 2008
Calculated Risk: Quote of the Day: Thornberg on Housing.
This is not a “which comes first the chicken or the egg” question. It’s a solid economic theory. Due to cheap credit and lousy underwriting guidelines, house prices went way too high and got beyond affordable. They are now adjusting back to affordable.
Where will “affordable” be? Depends on the individual market, your mileage may vary.
Tom Vanderwell
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