A review of supply and demand factors of housing will show a different situation than the doomsday headlines in the media. Warning: The Housing Bubble Could Get Worse. US Housing Enters 2021 In A Massive Bubble. This is an unhealthy, unstable, and unacceptable state of affairs." Demsas blames restrictive zoning laws for "turning an asset that could be widely available into a scarce one" and suggests that local governments should encourage increased density and more housing production to help supply meet rising demand. Without a doubt, we are in the early stages of a housing market crash. " But "rices are rising, homeownership is increasingly out of the reach of many Americans, and the alternative (renting) is also increasingly expensive, especially in the most job-rich parts of the country. "This isn’t a situation where a ton of people have mortgages that they won’t be able to pay off - the marginal homebuyer is wealthier and more secure than in the lead-up to the Great Recession. Regardless of the bubble status of today's housing market, homeowners and buyers, overall, face less risk than before the 2008 crash. "In general, what people are looking for to determine if there might be a bubble in housing is that the fast price appreciation is detached in at least some ways from the fundamental reasons why prices increase or decrease normally (like supply or demand)." The definition needs to be narrower than that." A "frenzied ethos" is also a key component. "And in everyday conversation, it appears to mean 'prices have gone up a lot and I think they’re going to come crashing down again.'" Regardless of the label, Demsas argues that home prices depend "on public policy choices that are in our control."Īccording to research by Harvard economist Robin Greenwood and his fellow researchers, "just because prices rise really fast doesn’t mean it’s a bubble in danger of popping. "here’s no agreed-upon economic definition for an asset bubble," writes Demsas. With home prices and rents rising across the country, Jerusalem Demsas, writing for Vox, attempts to answer the question, "are we in a housing bubble?"
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |