The commercial banks main losses were incurred in the residential and commercial housing market.

Some, observing the crash of the sub prime mortgage market, say, Don t worry, it is only a problem in the real estate sector.

Most homeowners are not gambling for pleasure.

Mortgages are available at outrageously high interest rates.

Moreover, commercial real estate is beginning to follow the downward trend in residential real estate.

Real estate booms have been going on in these countries major cities for years.

This apparent paradox is explained by a combination of high corporate saving and low levels of residential and non residential fixed investment.

We are now in the late stages of the biggest real estate boom in US (or world) history, driven by frenzied market psychology.

Alternatively, rising interest rates and a downturn in the real estate market could so weaken consumer demand that the economy slips into recession, squeezing exporters in other countries that depend on the US market.

Until now, the future course of real estate prices has been merely a matter of diverse opinion.

The level of real residential investment is still less than half its level before the recession began.

Latin Americans have long regarded real estate as a long term asset and as protection against inflation.

Moreover, real estate prices will most likely stop rising rapidly indeed, they may even decline.

The dramatic run up of home prices made it too easy to count on real estate values to continue to rise.

Nor is the Chinese property market about to implode.

Those bubbles may keep expanding, or may burst, leaving many homeowners mired in debt.

Moreover, continuing investment in real estate makes it all the more difficult to wean the economy off its real estate addiction, and the real estate market off its addiction to government support.

International investors are not likely to want to invest in these cities unless expectations of a price decline are built into the futures markets, as people in Tokyo understand from their own bitter experience.

Today, that market is dead and the money must go elsewhere.

Moreover, commercial real estate is beginning to follow the downward trend in residential real estate. After all, who wants to build offices, stores, and shopping centers in the empty ghost towns that litter the American West?

Last but not least, US tax policy hardly encourages private sector savings, especially giving the preferential tax treatment of real estate.

The sub prime crisis has diverted attention from rising fears about Sovereign Wealth Funds (SWF s) as the new bogeyman of global finance.

But the minute the sub prime crisis subsides, anxieties about SWF s will return.

Until recently, the US asset price bubble first in the stock market, then in real estate masked the underlying depreciation of American enterprises.

These developments offer hope that current and future homeowners will be spared the agony of worrying about the vicissitudes of the real estate market.

American households will need to learn to accumulate wealth by cutting consumption rather than speculating on real estate.

As a result, refinancing of mortgages will grind to a halt, leaving no money to draw out of housing to sustain Americans consumption binge.

Moreover, this same sharp turnaround occurred in many countries and for many assets, including oil prices, gold, and, in some countries, residential real estate.

Massive capital inflows caused real estate and stock market bubbles in the US and parts of Europe.

Statistical evidence suggests that this relationship will weaken once the real estate market recovers, but this remains a long run prospect.

It will take years to overcome the excessive indebtedness and real estate overhang that resulted.

The introduction of measures to cool the property market, and new direct regulatory controls over shadow banking credit, represent a step in the right direction.

Thanks to decisive policy moves to pre empt a housing bubble, the real estate market has stabilized, and further corrections are expected soon.

The Obama administration s efforts to deal with the real estate market have been a dismal failure, perhaps succeeding only in postponing further declines.

If the foundations of economic growth lie in advances in science and technology, not in speculation in real estate or financial markets, then tax systems must be realigned.

Glass Steagall also strengthened regulators ability to clamp down on lending for real estate and stock market speculation.

Even if Japan had never experienced a real estate and stock market bubble, the meteoric rise of its giant neighbor China would have been a huge challenge.

Distortions in the real estate market are a powerful motivation for saving, particularly among young people who struggle to meet the high down payment needed to buy a first home.

In the near future, substantially higher oil prices, lower real estate prices, or both, could, depending on public reaction, put Bernanke into uncharted territory for economic stress.

Residential density The number of people living in an urban area area of residential land.

The US housing boom is due, first, to low interest rates, which mean that large amounts of money can be borrowed for mortgages with moderate monthly payments.

Nevertheless, it will require some adjustment for New Yorkers seeking to hedge their own real estate investments to sell futures contracts that have a built in price decline.

A liquid, cash settled futures market that is based on an index of home prices in a city would enable a homeowner living there to sell in a futures market to protect himself.

Our hope is that as more and more agents put up All races welcome listings, it will build momentum to create a more inclusive rental market and landlords will start to realise that it is not just socially unacceptable to discriminate, but also economically unviable.

These markets have been insulated in part because most investment in real estate backed securities has come from local investors who often need to invest in local currency markets.