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Bank cheers "house party" as prices soar

Posted by Scott Van Voorhis March 15, 2013 07:03 AM

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Remember that little thing called the housing bubble? You know, that tiny little problem that nearly plunged the global economy into another Great Depression?

If so, you have a much better memory than some of our country's big banks, which are now shamelessly cheering for bubble-like increases in home prices.

Bank of America has nearly doubled its estimate for home price increases in 2013, bumping its prediction to, Bloomberg reports.

OK, maybe fair enough, but the title of the report by that makes this frothy prediction is truly disturbing.

"Someone say house party?" is not the headline of a blog post by some Kool-Aid chugging real estate agent. No, it is actually the name chosen by a BofA economist and pair of analysts for the report predicting the big price spike, the financial news service reports.

Really? After everything we've gone through we are back to this kind of mindless cheerleading for crazy price increases?

Still, shameless choice of words aside, BofA's actually predict of an 8 percent increase in home prices nationally over 2013 is actually somewhat tame compared to number JP Morgan is pushing.

The New York-based financial behemoth is predicting a 14 percent increase in home prices through 2015, doubling its estimate for 2013 to 7 percent, according to Bloomberg.

Runaway prices are good in the short-term for banks, helping reduce their load of distressed and underwater mortgages, but bad in the long-term for everyone.

And frat house style talk of a "house party" by a bank economist certainly raises some red flags.

After all, it does make you wonder. Are these are truly legitimate estimates, or just the kind of hyper promotion of the type we saw all too much off back in the bubble years?

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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