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The Obama bubble?

Posted by Scott Van Voorhis September 13, 2013 06:58 AM

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Home prices are on a tear again, posting double digit gains not seen since the bubble.

And there are mounting questions about how much of the current real estate rebound is being fueled by the Fed's multitrillion-dollar monetary manipulations rather than honest demand.

Here's an interesting take from a Louis Cammarosano , formerly of HomeGain, who has just launched his own real estate and economics site,

Writes Cammarosano:

The notion of manipulating interest rates by printing money in order to get people to move in an out of ever more expensive houses to drive economic growth is up there with other crackpot economic ideas like wishing for alien invasions and advocating government "shovel ready" make work programs like digging ditches and filling them back up to spur economic growth.

Frustrated by where home prices are headed? Read on.

Here's more from Cammarosano:

The Fed's chosen methodology of driving interest rates down to drive home prices up to help the economy recover from the Great Recession is at odds with two long standing government objectives- increasing the home ownership rate and making homes affordable. While the Fed may claim some success in getting home prices to rise, home affordability is declining along with the home ownership rate which is now at an 18 year low ...

Sustainable economic growth comes from private capital investment made to meet naturally occurring consumer demand.

The real economy measured by production, job and wage job growth has been almost non existent. Many believed and took solace in the false signals of declining initial jobless claims as an indication of job growth. The actual non farm payroll job numbers show this belief to be an incorrect, yet persistently held correlation.

This blog is not written or edited by or the Boston Globe.
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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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