With Alan Greenspan being in the news so much recently... I have heard several of my Realtor friends say that they wish he would just keep quiet ! They say he is talking too much, and now that he is no longer Chairman of the Federal Reserve, that he needs to let Mr. Bernanke do the talking. Personally, I think Greenspan needs to talk more... not less. Please allow me to explain.
I personally think it is foolish for anyone to disregard what Alan Greenspan has to say. I watched his entire interview tonight... one hour long... with Maria Bartiromo on CNBC. I was expecting it to be a great interview, so I even Tivo'd it.
Alan Greenspan is a brilliant man, and his knowledge seems boundless. I do, however, think that one thing Greenspan could do... is to say that when he is predicting drops in home prices... he is mainly talking about the specific areas of the country that have experienced double-digit price increases over the last three to five years. I think he really needs to make that clear.
Those increases were very unrealistic, and somewhat fueled by frantic investors jumping on what appeared too good to be true, and trying to take advantage of it. That is what investors do. Well... it was too good to be true, and values in those areas are now experiencing "price corrections."
I think a large part of the national housing problem (besides the sub-prime market crisis) is that when consumers hear all this stuff, they take it to mean that prices are falling in EVERY city in the country... and that is not the case. Then... they start to panic. Not a good thing !
If Mr. Greenspan is going to continue predicting a drop in home values, I think he needs to make the distinction between areas with unrealistic housing-bubbles... and all the thousands of cities in Main Street America where home values continue to be stable, and where real estate continues to be The American Dream !