Wednesday, August 20, 2008

How to Increase Housing Prices? Import Buyers

One way to look at the current housing crisis is that we have built too many homes. Another way to look at it is we don’t have enough buyers. So how do we get more buyers, Alan Greenspan suggests increase quotas for skilled immigrants. Excerpted from a Wall Street Journal interview

"The most effective initiative, though politically difficult, would be a
major expansion in quotas for skilled immigrants," he (Greenspan) said. The only
sustainable way to increase demand for vacant houses is to spur the formation of
new households. Admitting more skilled immigrants, who tend to earn enough to
buy homes, would accomplish that while paying other dividends to the U.S.

He estimates the number of new households in the U.S. currently is
increasing at an annual rate of about 800,000, of whom about one third are
immigrants. "Perhaps 150,000 of those are loosely classified as skilled," he
said. "A double or tripling of this number would markedly accelerate the
absorption of unsold housing inventory for sale -- and hence help stabilize

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