Florida property boom unsustainable - Atlanta Fed

[UpInArms]

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-07T205749Z_01_N0796442_RTRIDST_0_ECONOMY-FED-HOUSING.XML

WASHINGTON, Nov 7 (Reuters) - Soaring property prices have pushed parts of the Florida housing market into white-hot territory, but the gains are not sustainable, the Atlanta Federal Reserve said in its latest quarterly economic survey.

The Atlanta Fed, whose district includes some of the frothiest property markets in the country, has persistently voiced concern over rampant price rises.

"The supply of new housing now becoming available in Miami exceeds what was built in the past decade (9,152 units) and does not include another 212 projects encompassing 57,392 residential units that developers have proposed throughout the city," it noted in an article from its EconSouth magazine.

<snip>

The U.S. central bank worries about the durability of the housing boom. Consumers have used higher home values to finance continued spending despite stagnant wages, and policy-makers fear a dip in the housing market as the Fed raises interest rates could hurt consumption and sap national growth.

...more...