Portland Housing Case Study

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

Housing is the biggest factor in the cost of living difference. Which would explain why for many of us it is significant to our everyday lives, and daily decisions. But are housing costs out of control? With constant wages, high rates of unemployment, combined with the gap between affordable housing and the cost of living constantly increasing annually, housing cost has become inflated throughout the years. Although housing cost is simply a product of the functioning free market, along with supply and demand the implications are constantly affecting society.

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.

The housing market in Denver, Colorado starting taking its toll back in 2013 when Realtors were already predicting to have a big year after attempting to rebound after the market crashed the previous year. In 2011, the average real-estate sales dropped below $260,000 comparing back to 2009 where houses dropped down to $242,000. This year alone, the Denver housing market reached a record setting year, which there are more years to come, with the average residential home sales of over $350,000 (Aegerter). The real estate has really become more of a benefit to previous home-owners with families receiving profits from selling their homes, which the money gives the family enough for them to re-locate to another metro area and possibly find an affordable

The market in 2016 saw a supply of homes that couldn't meet the demand from buyers. This lead to a seller's market for those who wanted to buy a home. Sales and prices climbed throughout the year, but according to Ara Balabanian who is the President of the Victoria Real Estate Board, the numbers from last year are not sustainable. They're not the new normal.

Florida is a bellwether state for the U.S. in that trends that occur in Florida tend to be experienced by the United States as a whole. Florida has pushed through some major events such as the Florida Housing Boom in the early 2000’s, the recession in the mid 2000’s, and the long but steady recovery phase towards the end of the 2000’s and modern times.This trend in housing occured throughout the United States and was a key feature of the Great Recession. It is possible to better understand housing trends and economic effects by focusing on a particular example of housing in Florida. In addition to the direct relationship between prices and demand for condominiums in Florida, there is also a direct correlation of how events

Last week we received a number of reports related to housing. The Case-Shiller 20-City Home Price Index for June rose to 4.50 percent as compared to May’s reading of 4.40 percent. Denver, Colorado was the only city to post double-digit year-over-year growth. The index indicated national home prices grew by five percent year-over-year in June. When comparing increases in home prices and wage increases, America has a serious problem. Wages are increasing on average at about 2.0 percent, while home pricing are over twice the rate, making home affordability harder to achieve.

To understand the causes of the housing prices peaking, it is necessary to understand the events beginning in 2001. Alan Greenspan, Federal Reserve

In California, there is a shortage of residential single family homes for sale despite the exciting come back for the market since 2008. According to the California Association of Realtors’ president, Chris Kutzkey the reasons are “Solid job growth and favorable interest rates will drive a strong demand for housing next year.” While expensive markets such as San Francisco and Los Angeles may continue to experience housing shortages, less expensive markets will continue to have housing stock available because of improved job markets in manufacturing, logistics, warehousing, and transportation. This means that For Sale by Owner (FSBO) sellers will be competing for buyers.

Dent is restating the hackneyed predictions we have heard over the past 20-years, "A Seller Tsunami will crush real estate." The population charts clearly demonstrate a growing demand market. The permanency of housing already built does not satisfy the growing population so Mr. Dent's first bullet point is not a cause for a collapse in housing space needed.

The US National Housing market, specifically the One Member Housing Market has seen a steep decline since the latter half of the last decade. The NHS data for the last 35 years (1975-2010) has been shows in the figure below. From the data, three specific trend profiles of the NHS can be witnessed; the period from 1975 to 1991, where the NHS showed a stable trend, the period from 1991 to 2005 where the NHS showed a steady acceleration and the period from 2005 onward showing a steep decline in the NHS numbers.

Between 1997 and 2006, the price of the typical American house increased by 124%. Many people assumed that this trend of increasing housing prices would persist.

New one family house sales from January 1975 through October 2017 has certainly been a roller coaster ride. Unfortunately, the anticipation of climbing that giant hill and the exhilaration of flying down the other side with the occupant’s hands in the air on a roller coaster does not possess the same sentiment when it comes to forecasting new one family house sales. While watching the numbers climb is exciting for economists, the downward decline in sales causes forecasters, economists and the market to throw their hands up in the air while screaming; What went wrong?

Looking at the current state of the U.S. real estate market, the discussion quickly turns to traditionally reduced inventories, increasing sale prices and insufficient building and construction to meet demand.

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%).