Don’t Ask a Journalist to Explain Real Estate Economics to You, Part I

No offense to David Streitfeld, but I won’t be asking him to manage my investments anytime soon.

Streitfeld, a New York Times reporter, declares, “Real Estate’s Gold Rush Seems Gone for Good.” He interviewed several economists who warned that “home ownership will never again yield rewards like those enjoyed in the second half of the 20th century” — or, at least, that’s the conclusion he drew from the interviews.

Streitfeld asked all the right people. Dean Baker told him, “People shouldn’t look at a home as a way to make money because it won’t.” Robert Shiller said, “People think it’s a law of nature” that home prices must go up, but it isn’t. Barry Ritholtz warned, “People shouldn’t be holding their breath waiting for it to happen again.”

All three of those guys predicted the housing crash. They know what they’re talking about…but does Streitfeld?   Continue reading “Don’t Ask a Journalist to Explain Real Estate Economics to You, Part I”

Best of the Week: November 22-28, 2009