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Week of June 7, 2004

Front Page

n Builders Mark National Homeownership Month With Efforts to Meet Workforce Housing Needs
n Sign Up for 2005 Committees and Councils by July 9
n Builder Ralph Manley, 80, Re-enacts D-Day Jump Over Normandy
n Online Registration for 2005 Builders’ Show Now Open
n Calendar of Events
* New Web-Based Resource Documents Important Role of Builders in Species Conservation Efforts
* Test Third Headline
* NAHB Members Urged to Watch the Mail for Liability Insurance Survey
* Housing Snapshot

President's Message

* You Can Help Solve the General Liability Insurance Problem

Housing Politics

* Find Out How Your Members of Congress Voted on Key Housing Issues
* Homeownership Alliance Presents 'Homeownership Hero' Awards

Housing and Economics

* Commerce Proposes to Cut Canadian Lumber Duties in Half, But Builders Want Them Eliminated
* Homeownership Declining Among Families With Children, Study Finds
* No Unsustainable Speculative Bubble in U.S. Housing Market, According to UCLA Physicists
* Eye on the Economy

Construction Safety

* Home Builders Responsible for the Safety of Subcontractors
* Free Construction Safety Seminar at Various Locations This Summer

Environment

* Report Finds Insufficient Link Between Mold and Serious Illnesses

Building Quality

* Competition Opens for EnergyValue Housing Awards

Business Management

* Do Your Financial Statements Add Up? If Not, Be Alert to Fraud

Small Builders and Remodelers

* There’s Nothing Sub About Your Subs

Design

* Best in American Living Awards Entry Deadlines Near

Seniors Housing

* Rentals for Active Adults: An ACE Opportunity for Builders

Multifamily

* Luxury Apartments Rekindle Hollywood’s Golden Era
* NAHB Multifamily Is Looking for Speakers for Pillars Conference

Military Housing

* Air Force and Navy Housing Opportunities Announced

Labor

* New Training Program Enables Association Members to Improve Skills of Their Superintendents

Building Products

* HVAC Contractors Using Fiber Glass Duct Board After Rise in Price of Scrap Metal

Building News Coast To Coast

Association News & Events

* Builders Mark National Homeownership Month With Efforts to Meet Workforce Housing Needs
* Sign Up for 2005 Committees and Councils by July 9
* Builder Ralph Manley, 80, Re-enacts D-Day Jump Over Normandy
* Online Registration for 2005 Builders’ Show Now Open
* Calendar of Events

NBN Back Issues

 

No Unsustainable Speculative Bubble in U.S. Housing Market, According to UCLA Physicists

Physicists at the University of California, Los Angeles last summer released findings that the Federal Reserve’s “aggressively reduced short-term rates yields” and the lowest mortgage interest rates in decades had not created a bubble in home prices in the U.S.

“Testifying before the Senate Committee on Banking, Housing and Urban Affairs in July 2002, Federal Reserve Board Chairman Alan Greenspan told lawmakers that rising home prices in the USA are a by-product of ‘low mortgage rates, immigration and shortages of buildable land in some areas,’” according to the authors of the report — Wei-Xing Zhou and Didier Sornette.

“As a result, home owners have more equity they can use to pay off high-cost consumer debt and for other purposes. This leads to a beneficial effect on the U.S. economy rather than suggesting the possibility of a real estate crash,” they wrote.

“Based on the science of complexity, our analysis provides a confirmation of this conclusion derived from more standard economic analysis.”


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The analysis from the UCLA scientists reaches more troubling conclusions about the situation in Great Britain, where they believe housing prices could be poised for a crash.

The authors also site the segmentation of the U.S. housing market, which housing economists continue to argue is a factor that makes a national decline in the nation’s housing prices highly improbable.

The physicists based their analysis on the science of complexity, which, they say, “explains the spontaneous occurrence of coherent large-scale collective behavior, such as well-functioning capitalistic markets but also financial crashes and depressions, from the repeated nonlinear interactions between the constituents of economies.”

The analysis at UCLA represents a relatively new approach to studying the economy called “econonophysics.”

“Over the past decade, statistical physicists have begun to suggest that economists might want to rethink some of the basic assumptions upon which they construct their models,” writes Philip Ball in “Critical Mass — How One Thing Leads to Another.”

“By importing ideas from physics, say the physicists, economists can start to make sense of the erratic and so far unpredictable behavior of the world’s markets,” Ball writes.
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