The Great Debate UK
from The Great Debate:
-- James Saft is a Reuters columnist. The opinions expressed are his own --
When prophetic long time bears turn a bit cuddly, it is usually best to take notice. A real estate maven who rejoices in the "nom-de-blog" of Professor Piggington has now, after five years of correctly shouting bubble, labelled San Diego housing prices "reasonable" based on the latest available housing data.
Remember, San Diego has been, along with Phoenix, Las Vegas and parts of Florida, among the most bubbleicious markets in the U.S., and the massive busts there still represent a huge problem for bank balance sheets, for employment and for the U.S. economy generally.
So a bottoming, if that is what we are seeing, would be very significant. Housing is usually among the first sectors to recover in the aftermath of a recession and many economists argue that it actually drives the economic cycle.
Piggington, whose mother knows him as Rich Toscano, is making more modest claims; that prices are reasonable historically, but his arguments have some merit and fair value is a necessary but not sufficient precondition for a bottom and a turn.