Saturday, April 24, 2004

Housing prices:

I was in DC few days back and talked to few people about the housing prices. On average, they said home prices have doubled in the last six years. Surprisingly, this is not unusual. Orange County has seen doubling in prices in the past three years. Property prices have also risen rapidly in New Jersey and Philadelphia metro.

The big question I have is: What was the total value of housing stock (similar to market capitalization of all the U.S. companies put together) say five or six years ago and what is it today? My gut feeling is that we have increased the real estate prices in the U.S. by some $15 trillion in the past five years. That's more than the market cap of all companies in the U.S. Home prices here are behaving the way they did in Hong Kong and Bombay in the late 80s and Tokyo in the early 80s.

The U.S. economy is getting stranger every day.

Thursday, April 22, 2004

Global economy:

The IMF is predicting the world economy to grow by 4.6 percent in 2004 and 4.4 percent in 2005, buoyed by an increase in global trade and a surging US economy (or is it housing markey. It is also forecasting growth in developing nations to ease slightly. The latter is obvious: How can a region sustain a growth of 8 percent? Duh!!

Wednesday, April 21, 2004


The housing market baffles me these days. It's strage as well as depressing to see real estate prices rise so fast and people willing to buy homes at these inflated rates.