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Greenspan is Not Saying Too Much... He Isn't Saying Enough !

By
Real Estate Agent with New Home Hunters of Fort Worth and Tarrant County

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 !

Posted by

Faina Sechzer
Henderson-Sotheby's International Realty - Princeton, NJ
Real Estate Expert - Princeton, Montgomery ,Hopewell, NJ
Karen - I watched his interview yesterday - it was not as much about the economy and housing as the one with Leslie Stahl on 60 minutes.  From what I understood him saying, he was not making a distinction between various parts of the country, but rather talking about nationwide trend that he sees. Several months ago he was predicting a decline in single digits and now he revised his view -to double digits. Last year he was even more optimistic. When I did Google search yesterday, you can clearly see how his views changed over time.
Sep 17, 2007 10:46 PM
Adam Waldman
Westcott Group Real Estate Company - Hauppauge, NY
Realtor - Long Island
KAREN ANNE:  I missed the interview, but you are absolutely right.  It's time that people like Greenspan actually start clarifying and talking responsibly.  There were "hot-spots" throughout the country that had unrealistic gains because they were building tons of condos and people were flipping them before they were even built.  It was tantamount to being a pyramid scheme, only it was legal (albeit foolish).  The problems with those areas started because the experienced investors were selling to the inexperienced investors and no one ever had any intention of living in these units and homes to a lesser degree.  This created a glut on the market, and a virtual game of musical chairs.  The problem is that it worked for a while when there were more buyers (players) than homes (chairs).  When the tides turned, it reversed the game and they ran out of players (buyers).  Thank you for sharing this for those of us that missed it. 
Sep 17, 2007 10:59 PM
Christopher Benedict
BIG Realty - Collegeville, PA
AskTheBigGuy
I think Greenspan is really passing the buck...he lowered rates for quarter after quarter and saw the writing on the wall, but now blames just the mortgage co's and Bush!
Sep 17, 2007 11:05 PM
Joe Manausa - Tallahassee, FL
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate
Nice post Karen. I agree with you in most ways, but from what I can tell, most markets have their own version of a bubble. In Florida, beaches have a huge bubble, but even the "inner markets" saw appreciation due to the beach markets crazy rise. With values nationally doubling over the past 7-10 years, I suspect we will all see some cooling off.
Sep 17, 2007 11:12 PM
Susie Roscoe
Signature Realty Associates - Brandon, FL
Real Estate Specialist | Brandon, FL

You're Right!!  I missed it...LET HIM SPEAK!!!

Sep 18, 2007 12:25 AM
. .
no thanks - Harlem, MT

Great post! Can you Bluetooth what you Tivo'd over to me so I can watch the interview?! Just kidding! One Greenspan Biography I read had this to say about him,

"He is commonly perceived as an inflation hawk, often criticized for focusing on controlling inflation rather than on lowering unemployment rates.Greenspan's general comments can be so strong that they can send financial markets sharply in either direction."

He was chairman of the Federal Reserve Board for 5 straight terms and was not eligible for renomination to a sixth term in that position. Just because he is not chairman of the Fed anymore, does not mean that we should not listen to him. What he has to say still carries weight and is worthy of listening to.

I too, think that it would be nice if he would not lump real estate trends together and give consumers the idea that the entire country is seeing double-digit drops in housing prices, BUT I think that due to being the former chairman of the Federal Reserve Board, he tends to look at numbers on a national level. It's not his job to break it down into regions, areas, cities, neighborhoods, etc. That's OUR job :)

The good news is that we get to be area experts and educate Buyers and Sellers that we work with in our area! Let us shine!

Sep 18, 2007 03:33 AM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate
Hi Bridget:  I think I just might go out and buy Greenspan's new book.  One additional thing he said last night occured when Maria Bartiromo asked him about his opinion of all of the presidents he worked with.  He said that Nixon and Clinton were the most intelligent.  Thanks for reading my post, Bridget.
Sep 18, 2007 06:17 AM
Paula Henry
Home to Indy Team @ HomeSmart Realty Group - Avon, IN
Realtor - Indianapolis Real Estate - 317-605-4174
Karen Anne - That's the problem when they start talking - they generalize and I am tired of hearing how bad the market is - It is NOT the same everywhere. There are differences in neighborhoods within a city, depending on location and price range. It is not all bad!
Sep 18, 2007 03:34 PM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate
Paula:  I totally agree.  Perhaps you might know some really bad guys up in Indianapolis who might go visit Fox and MSNBC and "straighten them out."  Ya know... have a little "chat" with them.  LOL
Sep 18, 2007 04:04 PM
Joni Bailey
101 Main St. Realty - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

Weather we like it or not, the stock market responded to Greenspan. Sometimes that was good, sometimes it wasn't so good!

Oct 17, 2013 05:13 AM