The NYT Still Hasn't Heard About the Housing Bubble

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Tuesday, 31 May 2011 04:31

The NYT had a front page article on the prospect that house prices will hit a new post-bubble low with the release of new data from the Case-Shiller index. (This refers to nominal house prices. Real house prices are down by about 4 percent from their low in 2009.) The article does not make any reference to the housing bubble.

At this point the bubble is mostly deflated, but real nationwide house prices still must fall back by about 10 percent to get back to their 100 year-long trend. It would have been worth mentioning this trend in this article.

The article also includes a misstatement by Douglas Yearley Jr., the CEO of the builder Toll Brothers. Yearley is quoted as saying, "no one ever renovated the kitchen or redid a room for the kids in a rental."

This is not true. In cities that give security of tenure to renters, meaning that it is difficult for landlords to kick them out, it is not uncommon for tenants to pay for major repairs/renovations to their units.