Tags: Goolsbee | housing | silver | bullet

Former Obama Adviser Goolsbee: Housing Rebound Isn’t ‘Silver Bullet’ for Economy

Thursday, 09 Aug 2012 09:14 AM

By Dan Weil

The housing market may have begun a rebound, but it’s not a cure-all for the economy, says Austan Goolsbee, former chairman of the Council of Economic Advisers for President Obama.

"When the thing [housing] comes back, and I think in many markets you've started to see prices recovering, it's probably going back to what it was for 75 years, not what is was during the go-go days,” the University of Chicago economics professor told Yahoo.

“If people are keeping their fingers crossed that it’s going to be the silver bullet, that’s a mistake."

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

The housing market itself stands far from a full recovery, Goolsbee said. "We've got five million vacant homes in the country and so the thought that we're going to get substantial construction building more homes, I think it's going to be several years before that happens."

Proposals have emerged among real-estate players for local governments to use eminent domain to take control of underwater mortgages.

The legality of such a move is unclear, but it’s worthy of consideration, Goolsbee said.

“We know there’s $750 billion of negative equity out in the housing market, and that's a huge issue.”

The nascent real-estate recovery may not be strong enough to power the entire economy, but it does create opportunities for investors.

The Wall Street Journal suggests looking at homebuilder stocks, real-estate investment trusts (REITs), and buying homes or apartments to rent them out.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

© 2015 Moneynews. All rights reserved.

Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.

You May Also Like
Around the Web
Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved