Greenspan: Housing Will Hit Bottom in 2009

Skilled immigrants would help end slump, he says
By Jim O'Neill,  Newser User
Posted Aug 14, 2008 11:19 AM CDT
A sign declaring a lower price stands outside a home on the market n Denver on Sunday, July 20, 2008.    (AP Photo/David Zalubowski)
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(Newser) – Alan Greenspan said housing prices could continue to edge lower through 2009, but should “stabilize or touch bottom” in the first six months of the year, reports the Wall Street Journal. And, the former Fed chief says, while a government bailout of Freddie Mac and Fannie May was the right thing to do, the companies should have been nationalized.

He contends the housing market will begin to rebound as the supply of vacant housing stock, now about 800,000 more than the norm, is erased. That, he says, is already beginning to occur. And immigrants could help supply some demand. "The most effective initiative, though politically difficult, would be a major expansion in quotas for skilled immigrants," he said.