The crew of CNNs In the Money opened their December 10 program
warning about a bursting housing bubble, but an interview with a
Harvard housing expert quickly deflated that story line.
Filling in for co-host Jack Cafferty, business reporter
Susan Lisovicz introduced viewers to the first guest,
Nicolas Retsinas of Harvard University: Well, if you're into
gloom and doom predictions about the housing market, the news this
week has plenty for to you chew on.
Lisovicz promised viewers that Retsinas, the
universitys director for the Joint Center for Housing Studies,
would help us figure out who is in for the most pain in the
housing market, showing a preference for looking for victims in
the economy rather than people who might benefit from housing values
growing at a steadier rate, like first-time home buyers.
Retsinas quickly set about dispelling the notion of a
housing bubble, noting something the
Business & Media Institute documented in a November 30 analysis: the
medias extreme predictions havent come to pass.
Well, talk about a housing bubble has been around now
for the last three or four years, and reports of its demise may be a
little exaggerated, but clearly its slowing, Retsinas, a National
Housing Hall of Fame member, said in response to a question by
Lisovicz about recent data showing record new home sales coupled
with declining sales of existing homes.
The former Clinton-appointed Treasury official informed
viewers that the national housing market is really an aggregate of
wildly different local markets and that those supply/demand
relationships have to affect those particular areas. Even so,
Retsinas reminded the In the Money panel that overall it's been a
pretty prosperous, a pretty thriving sort of housing market, even
though there were some signals of slowing in selected markets, in
selected jurisdictions.
Even though Retsinas said there was no national bubble,
Fortune editor Andy Serwer continued assuming one existed. He argued
that the Anderson Forecast by UCLA predicts if this thing does
burst it would have dire consequences on the job market. They're
saying 800,000 jobs might be lost, 500,000 in construction, 300,000
in the related finance sector.
Answering Serwer, Retsinas urged the business reporter
to have a longer view of the economy, noting that historical
perspective is important. Nationally, home prices have not declined,
as best we can tell, since the Great Depression.
Of course, the way CNN generally and Serwer
specifically have reported economic news, one might think there was
another Great Depression on the horizon. The Business & Media Institute
noted, for example, that Serwer predicted an economic downturn
resulting from
Hurricane Katrina. In reality, the economy grew at a rate of 4.3
percent in the third quarter as a brief spike in gas prices to
$3.05-per-gallon in early September declined steadily through
December and now stands at
$2.17-per-gallon.
Harvard Professor Deflates In the Money
December 12th, 2005 2:00 PM
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