by Calculated Risk on 7/19/2005 07:10:00 PM

An American Express economist is predicting that the US housing bubble [is] expected to spread according to the Financial Times.

"...the current bubble, which was already larger than the last one, is likely to grow - and spread even further - said John Calverley, chief economist at American Express, the financial services group.

The boom in US house prices has started later than in other countries such as the UK, Australia, the Netherlands and Spain. However, figures suggest that it is catching up fast."

See Dr. Setser's comments on the Netherlands.

"...Mr Calverley warned that the boom had definitely become a bubble. The giveaway signs included excitement in the media and new lending policies from banks.

People were borrowing as much as they could because they expected prices would only go up. Meanwhile, new entrepreneurs were springing up offering property advice or “condo flipping”, when flats are bought off-plan and sold as quickly as possible.

A swift end to the phenomenon was unlikely unless interest rates rose significantly. Instead, the US could expect an expansion of the bubble and an even harder landing, predicted Mr Calverley ..."