The US real estate market has been in a “terrible” state, and it appears the real estate industry has no idea how to fix it, according to a report from the University of California-Berkeley.
According to the survey of 1,500 real estate professionals conducted by the real-estate school, a third of respondents believe that the country is in a bubble.US real estate experts have long been warning about the bubble, but they have not focused on its real-world implications, including the damage caused by a sharp drop in home prices, the report said.
“It’s clear that we have a problem.
The real estate bubble was created by a combination of market forces that were not aligned with the goals of policy makers, and the policies of Congress and the administration, and that’s what we’re seeing today,” said Dr Mark Siegel, professor of real estate at UC Berkeley.”
What we are seeing now is a very, very fragile environment that we need to fix,” he added.US house prices have fallen more than 30 per cent since 2007.
Siegel and other experts have predicted that the economy would start to recover, and prices would recover as housing stock was added to the market.
But the report also said that the real market is far from back to pre-crisis levels, and there is still a risk that the housing bubble will burst.
“If we don’t get some relief from the recession, we’re going to see some serious damage.
We’ve already seen it,” said Siegel.
The US real-market has been a key driver of the economic recovery, but it has been hit by an influx of immigrants, a sluggish job market and a weak economy that has hurt growth.
“The real estate boom is a mirage.
It’s a myth,” said Brian Merten, senior economist at the Center for Strategic and International Studies (CSIS), a think-tank in Washington DC.
The report said that even if housing prices were to return to prewar levels, the housing market would not have recovered from the crisis and the real economy would not be back to its pre-bubble strength.
“Housing prices in the US are currently at their lowest level since 2007, and a sharp increase in home values would cause housing prices to decline even further,” it said.
The CSIS, which has advised the Trump administration on housing policy, said that while the bubble is over, it would not go away.
“A sustained increase in housing prices is not in the cards.
We believe that a gradual recovery in the housing markets will require sustained, robust economic growth and a long period of adjustment, which is unlikely to occur without further fiscal and monetary policy accommodation,” it wrote.
The study also said it would be a mistake to “exaggerate” the current housing market.
“There are significant obstacles that remain to the return of the housing boom to precrisis heights.
Real estate remains far too expensive, and so many housing markets are still in a period of severe recession,” it noted.