Is there a ripple effect?

IIPM BEST MBA INSTITUTE

While the real estate boom in India is just beginning to lose some semblance of sanity, the market in the US is in the middle of a decline, after having spiraled ridiculously out of control in the recent past. Mittal of Triveni comments on the situation in the US, “Nationally, the overall outlook seems reasonable: 7% appreciation for 2006 and fl at for 2007. According to the forecast, a third of the nation’s 100 largest metro areas (accounting for 60% of US population) are expected to see modestly falling house prices.”

Around the year 2000, the US Fed had softened its monetary policy considerably in order to boost the economy. This resulted in a massive diversion of funds to the real estate sector, with heavy borrowing from banks. Later on, in the light of the bubble that developed, the Fed went on rate hike spree, increasing interest rates for 16 times in a row. The drop has hit hard. US home building stocks have fallen by over 50% from their peaks in the last two years.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Rashmi Bansal Publisher of JAMMAG magazine caught red-handed, for details click on the following links.

• Hindustan Times Article - Publisher goes underground
• Rashmi Bansal (Editor of JAMMAG)
• Rashmi Bansal (Publisher of JAMMAG)