Barry Ritholtz: Housing Prices Are Still Too High (VIDEO)
Barry Ritholtz, founder of investment research firm Fusion IQ and writer of the popular blog, The Big Picture, is known for his bearish views -- and the housing market is no exception.
In a recent interview with Henry Blodget and Aaron Task of Yahoo's Tech Ticker, Ritholtz argued that prices are still too high for most potential homebuyers. Nationally, prices are off about 30 percent from their peak. And, houses have been the most affordable in 40 years -- says Northern Trust economist Paul Kasriel in a recent housing report.
But Ritholtz argues that due to less government intervention in the housing market, home prices are bound to dip. (It's what he called the "beginning of the second leg down housing.")
"The general expectation amongst marginal buyers sitting on the fence is, if I'm gonna buy a house and I'm gonna be there for less than 5 or 10 years then I'm gonna get hit with a small loss," Ritholtz said.
Here's more from Ritholtz:
"The government tax policies, the first-time home buyers credit, the massive mortgage purchasing by the Fed and [quantitative easing] to keep mortgage rates down had a temporary impact of slowing down the falling home prices, and now that that's going away, we see that reverting."
WATCH the interview: