REALTOR® Magazine-Daily News-Housing Less Likely to Be Wealth Builder

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Daily Real Estate News | September 1, 2010 | Housing Less Likely to Be Wealth Builder
The housing market may stabilize, but some economists believe that real estate will never again be the investment it once was.

Stan Humphries, chief economist for Zillow.com, predicts that in the future housing values will only keep up with inflation. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”

Dean Baker, co-director of the Center for Economic and Policy Research, says it will take 20 years for the market to recover the $6 trillion lost since 2005 and values will never catch up.

Bob Walters, chief economist of the online mortgage firm Quicken, is more optimistic. “You have to live somewhere,” he says. “In three or four years, people will resume a normal course, and home values will continue to increase.”

Source: The New York Times, David Streitfeld (08/22/2010)