Seeking the Simple Solution

CIO Vantage Point
April 20, 2010 Posted by:
Posted by Joe Morgan, April 21, 2010 at 4:45 PM
"Though inflation is currently running at multi-decade lows depending how you measure it, it seems the possibility of outright deflation remains extremely low. Certainly, there has been considerable deflation within real estate, but this was really just the bursting of the bubble. The bigger question for me is: if we don’t intend to have a functioning mortgage market, then home prices must revalue to the point where transactions occur on a cash basis. No one wants this and yet we still find little action directed at this problem.

To answer your question directly, should we enter a period of widespread deflation, the term “double-dip” will not be strong enough. Business will fail, unemployment will rise considerably, and probably the last thing we’ll all be concerned about will be housing values (which will certainly plummet). But, to repeat, I don’t see the makings of this as a possibility today."
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Pending Comments
Posted by Navin Kumar_2, April 21, 2010 at 1:59 AM
"Will there be an impact to US housing market owing to possible deflation?"
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