Is Us Housing Back In Frothy Territory?. The Us Housing

The housing crisis of 2008 can trace its origins back to the stock market trends of the mid- to late 90 's. During a period of extended growth in the stock market, increased individual wealth among investors led to generalized increases in spending, including in the housing market. With more disposable income in the pockets of consumers, the demand for housing increased in the late 90 's. Due to the fact that homes are large projects and their construction takes a large amount of time, the supply of homes in the market is inelastic on the short term. Because of the fixed supply of homes, as per the law of supply, which

Shortage of housing supply, especially in the coastal areas, is the critical issue that drives housing affordability crisis in California. California’s major coastal metros (such as Los Angeles, San Francisco and San Diego), where about two-thirds of Californian live, is lacking in sufficient housing to accommodate all the people who want to live there . For example, in 2015, there were 133,000 jobs created in the Bay Area while only 16,000 units of housing added there . In addition, the construction of new housings in California’s coastal metros, from 1980 to 2010, was low from both national and historical standpoints. During the past three decades, the number of housing units in the typical U.S. urban center grew by 54%, compared with 32%

In 1979 under Thatcher 's reign, the conservative government published its housing bill promising with it the Right to buy. A popular demand at the time as people living in social houses aspired to finally own their home. At the time a blessing, however 30 years later we find that the bill promised the current generation housing at a discounted price. however, only at the expense of the next. The bill forbade local authorities from replacing the council houses sold in the right to buy system. Due to the nature of the right to buy properties, the houses sold were not empty nor was it available, many of the properties were already inhabited. Over the course of 30 years, over 2 million social houses were sold; as a result, there was a large demand for social housing which the local authorities could not meet. Subsequently due to heavily discounted prices of the houses, used to ensure that those vulnerable families are able to become home owners; not enough income was being generated in order to build a replacement home. Since local authorities could not replace them themselves, social landlords struggled to build enough to replace those sold through the right to buy. The bill also opened made way for private companies to abuse the bill and make profit out of properties previously owned by the local authority.

Two economic factors affect supply in a stable housing market, price of related goods or similar houses, and the price of the good, best represented by style or size in the case of the housing market. The affluence of a community typically determines how much homes sell for in those communities, and therefore communities where a lot of people want to live become areas where average home prices are high. (Kumar, 1) There is little space in these affluent communities, and therefore little supply. A good example is New York City, where no homes are available, only apartment buildings, and very few apartments are actively exchanged each year.

Miami was hit very hard by the sub-prime mortgage crisis of 2008-2009, but according to recent housing data, Miami’s housing market is recovering rapidly. Average housing prices, both condominiums and single-family homes, have increased greatly from the bottom that occurred after the crisis. Data from the last quarter of 2013 reported by the Economic Development Division of Miami-Dade County showed an increasingly strong real estate market, as single-family median home prices were up approximately 16% year-over-year and foreclosures down 6% year-over-year (Cruz and Hesler).

South Florida's housing market is now one of the most stable in the country. I am currently living in the city of Boca Raton, considered as one of the wealthiest communities in South Florida. Using a scale of 100 for the United Stated as a whole, the cost of living in this area is 124; therefore, it could be more expensive to live in this area than many other places around the country. The highest aspect affecting the cost of living is housing, which is a 163 on the scale. As right now, this city is in a seller’s market in housing; the demand in houses is high, which means that are more people seeking to buy a property than there are available homes on the market. In consequence to keep up with this demand, developers are prompted to build

“Why didn’t Canada’s housing market go bust?” This is a question that has attracted interest from economists, market researchers, and the general public as a whole. The Canadian and U.S housing markets are moderately comparable in numerous respects, but when it comes to the financial crisis both countries resulted in extremely diverse ways. There are many things that can be attributed to the different outcomes of both countries, including: lending standards, rise of real estate, and above all the crash of the sub-prime mortgages which will all be examined. What will first be analyzed are the history of the housing market in both Canada and the U.S prior to 2008 and the market crash, then the comparison of the factors that caused each scenario in both Canada and the United States, as well as the present situation in both Canada and the U.S.

The current housing market is experiencing another large, daunting bubble that I fear is leading to another burst and market crash. The “Baby Boomer” Generation and the “Millennial” Generation are currently experiencing a great disparity gap between the two of them, both in pay and in purchasing power which directly affects the housing market. As the Baby Boomer Generation begins to retire and move on from where they currently live, the housing market will suddenly experience a boom in available housing. The issue then becomes that the Millennial Generation does not currently have the economic buying power to purchase these houses. This issue is currently visible in the Bay Area where housing is at an all time high. Houses are currently being listed as Baby Boomers want to move out of the higher cost of living areas into lower cost of living areas when they retire, but their current listing prices are prohibitively expensive at the current wages the new buying generation makes. These houses are being listed for longer periods of time, many homes listed over a year, with no successful bids.

In the post years of the real estate crises, we saw slow but careful recovery progress. The homebuyers and sellers in the new market who either lived through the crises or watched the aftermath of the effects, learned valuable lessons and approaches to buying real estate.

In 2005, The Economist published commentary from a speech Greenspan gave to Congress where Greenspan noted “at a minimum, some local [housing] markets are distinctly frothy and a decline in prices would undoubtedly entail economic distress; [however] such a decline is by no means inevitable, nor sure to produce large macroeconomic effects even if it does occur” (The Economist, 2005, para. 9).

According to Wikipedia a housing bubble is a type of economic bubble that occurs periodically in local or global real estate markets. It is characterized by rapid increases in valuations of real property such as housing until they reach unsustainable levels and then decline. Four years into the housing bubble downturn, much of the country remains hopelessly confused about what happened, why it happened and who is to blame. In my research paper I will try and demonstrate what a housing bubble is, some of the reasons for the bubble, was it preventable, how it kept growing, how it burst and how it has affected our economy.

Housing’s importance to the economy is undeniable, with a healthy housing market essential to robust economic growth historically.

In 2017-18, the federal government will put downward pressure on rising housing costs. In order to reach a greater housing supply and get more

Auckland is New Zealand’s largest residential property market.There has been a physical shortage of houses, particularly in Auckland. Strengthening economic growth and migration inflows as well as loose credit conditions multiplied demand in construction sector. More recently, the Official Cash Rate (OCR) has been increased from 2.5 percent to 3 percent for the purpose of preventing general inflation pressures in the broader economy. Housing supply conditions have also started to improve with a recovery in residential construction, centred in Auckland. These factors are all working to reduce the

Australia’s Housing Market Is slowing down, alongside moderate economic growth of 0.3% during the march quarter. Whilst house prices on average across eight capital cities rose by 2.2% in the March quarter and 10.2% through the year to the March quarter. Also, if looking annually at the residential property price rises across 8 major cities we can see that Sydney has the highest annual price raise at 14.4%, Melbourne (+13.4%), Hobart (+11.3%), Canberra (+8.9%), Adelaide (+5.0%), Brisbane (+3.5%), Darwin (-5.9%) and Perth at (-3.5%).