U.S. home prices are likely to bottom out by early in 2009, former Federal Reserve Chair Alan Greenspan told listeners at a Deutsche Bank economic conference in Singapore last week.
"We are having some liquidation now, it will accelerate, but it will not be until early 2009 that we will get close to having eliminated most of (the excess home inventory)," Greenspan said, according to a transcript of prepared remarks.
Greenspan also said he expects the credit crisis to end next year provided that the world economies maintain growth in the face of "a significant further decline" in U.S. home prices.
What’s next? Once home prices and credit markets stabilize, Greenspan foresees a period of inflation.
Source: Dow Jones International News (05/14/2008)