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TAKE NOTE
POP GOES THE HOUSING BUBBLE . . .
The sound you’re hearing just might be the bursting of the housing
market bubble. The nation’s housing boom has been watched closely
and has been the subject of much speculation as to when it will end.
In its August issue, Kiplinger’s Personal Finance magazine
reports on the 13 riskiest housing markets in the United States based
on Walnut Creek, CA-based PMI Group’s index of risk that housing
prices will fall in the next two years. Forces from investor speculation
to job market losses could be the reason.
The riskiest major housing markets measured in the percentage chance
of a price fall in the next two years are: Boston, MA (53%); Los Angeles,
CA (40%); San Francisco, CA (40%); Sacramento, CA (40%); Providence,
RI (39%); Detroit, MI (38%); New York, NY (31%); Minneapolis-St. Paul,
MN (25%); Denver, CO (21%); Washington, DC (19%); Ft. Lauderdale,
FL (19%); Miami, FL (18%); and Tampa-St. Petersburg, FL (14%).
. . . OR MAYBE NOT QUITE YET
The view on long-term mortgage rates was quite different in late June
when the Federal Reserve met. Economists then were beginning to suspect
the decline in long-term interest rates is more than a temporary aberration.
Chairman Alan Greenspan called mortgage rates, which have been at
their lowest level in decades, a “conundrum,” according
to The New York Times.
Theories as to why mortgage rates have remained so low include low
bond yields, which reduce demand for credit; rates being depressed
by a savings glut around the world; and long-term rates mostly driven
by investors’ expectations of long-term inflation.
MAKE MINE TROPICA EXOTICA
Crest toothpaste, a division of Procter & Gamble, has been asking
people to go to its Web site to vote for their favorite new flavor
(lemon ice, sweet berry punch and tropica exotica are on the list.)
Soon the days of focus groups and surveys may be long gone in favor
of immediate, interactive sampling. The idea is that when consumers
actively vote for a product or participate in its development, it
is more likely the new item will sell well, says Michael D'Esopo,
Lippincott Mercer, a design and brand identity firm that is a division
of Mercer Inc. |
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