Rent Price Ratio

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

The obstacles landlords have to overcome causes them to lose their motivation to invest in rental properties and they instead flock towards other housing options to include condominiums, office towers, and hotels.

When the recession happened, and the housing market crashed in Los Angeles a few years back many people lost their homes. The foreclosure crisis displaced many homeowners, drove up demand, and rental prices increased. Now, it is almost two years later, and the dramatic rent increases continue to soar. There would be no issue with cost of living increase except; the increases in income have yet to make the same shifts. “In many cities, rent is rising out reach of

Where there is darkness there is ultimately light and the various homeownership opportunities under the current economy reflect this notion. Real estate prices

In 2008, the American population saw a large wave of home foreclosures during the Great Recession that created an economic crisis that displaced millions of homeowners. Unable to recuperate from the terrible financial situation, these persons found comfort within the rental property industry. These previous owners, unable to purchase new homes, began renting property and living as tenants, contributing to the 4% growth record of the rental industry as published in a study that was conducted by Harvard University. With the growth of this industry, rental property owners began to devote more of their time to the development and marketing of their rental properties. These owners began providing lower rates for their properties, and they began making improvements that allowed them to increase the net profit that they received. With the continual “boom” of the industry and the popularity that it is receiving due to young adults needing places the live, rental property owners need an effective program that allows them to oversee their properties and communicate with their tenants.

There are several forms of rent control, however they all take the shape of legally imposed below-market rates for rental housing. Most rental ceilings came into being at the end of World War II (1939-1945) to help mitigate expected disruptions in the rental housing market due to the demand shock of veterans returning from overseas service in the war. (Rent Controls, 2008) Rent control can still be seen in larger municipalities, such as New York City, to make housing more affordable for low-income tenants. In the short run, the supply for apartments is inelastic and the quantity of buildings already supplied is constant. Rent control, in the long run, reduces the availability of apartments subsequently causing suppliers not to build more apartments due to not being able to make a profit from their rentals. Shortages of rental homes can lead landlords to discriminate against renters and even demand for renters to pay extra monthly payments under the table. Rent control deters new investments that would have gone to rental housing and has validated that it leads to housing deterioration, fewer repairs, and less maintenance. For In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that “a ceiling on rents reduces the quantity and quality of housing

In San Fransisco there’s a site called Rentberry that allows renters to bid on apartments, similar to Ebay. Renters set a rent price, deposit, and other negotiables and the best offer gets the apartment. Services similar to Rentberry are popping up across the country as Americans who rent property surpassed those who own their own property. In half of the U.S’s 100 largest cities renters make up more than half of the people living in the city. The idea for Rentberry came from the concept that Americans bid on homes to own, so why not bid on rental properties. Critics claim that rent prices will rise 5% because of the expansion of rent-bidding. However, results found that rent actually decreased by 5.1% on average. Economists say that there

Macroeconomics is an excellent tool for the analysis of the housing industry as something like a capital good, as a home is considered to be, cannot easily be studied in a short-term platform. Real estate is a good that costs several times more than an average persons annual income, in the United States that number is typically 7 times as much, and in the United Kingdom that number is 14 times as much. Several factors of both supply and demand directly impact the housing market on a macroeconomic scale. (Business Economics, 1)

After World War I, the demand for rental housing in New York City threatened to drive rents higher. In order to keep rents from rising to their equilibrium levels, city officials imposed rent ceilings. Over time, the implementation of rent ceilings caused a market shortage to occur because the demand for rent controlled units exceeded the supply. According to the law of supply and demand when the price decreases below the equilibrium point there is a move to the right on the demand curve. Conversely, the decrease in price causes a move to the left on the supply curve. Customers demand more of an item, in this case, housing, when the price is lower; however, the suppliers are willing to supply less at the new lower price. This shift in New

It is worth noting the difference between gentrification and “incumbent upgrading” in which current residents improve the neighborhood’s housing value with no apparent population change (McDonald, 1986). Furthermore, McDonald stated that the mere increase in value of real estate in a neighborhood does not qualify as gentrification. This is due to the fact that the increase in value can be the result of inflation in the housing market on a national scale. There are many theories of the causes of gentrification. Some believe that the younger or wealthier people move to urban neighborhoods as a way to reconnect with the community while gaining more cultural awareness. There is also the theory of the real estate having a low price tag. The low cost of land attracts buyers who are interested in renovating the business for a large financial

When it boils down to deciding between renting and owning a house, it is just a very complex choice that will require a handle on the micro economic and long-term tendencies. So that you can explore this, you can compare the prevailing cost of rent to average the housing costs and recommend either one or another. For instance, Miami is a buy city right this moment and New York is really a rent city. Once you have an comprehension of the local real estate market, then you need to come to a decision. Be sure you know the local market before making any

It is likely that the renting trend will decline and buying will increase in the future but it is hard to say when. However, “if rent keeps rising and prices keep falling, fearful buyers could slowly become bargain hunters.” (Business Week, 2014). I feel that people will eventually get tired of spending there money on rent and will want to invest more in there future. I don’t think that the real estate market will ever be a boom again. I believe that people have learned that just because interest rates are low doesn’t mean they can financially take on a mortgage.

Housing demand includes household growth, real incomes, real wealth, tax concessions to both owner-occupied and rental housing, concessions to first homebuyers, returns on alternative investments, cost and availability of finance for housing and the institutional structure affecting housing finance provision (Yates, 2008). The growth in the number of households and in real income results in the increased pressure on housing demand.

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.

In this report, the question “How much of the changes in the median selling price of homes in a city can be explained by the changes in median income of that city?” is answered. Home ownership is an important aspect of one’s life stages, and home prices are determined by demand and supply. The demand curve is affected by the one’s income, such that as one’s income increases, one is more willing to pay a higher price for the same quantity of goods (Baye & Prince, 2014). However, there are many other factors that might affect the demand curve, e.g. no. of children, in the household, the perceived quality of education in the school district, or the number of job positions (filled or open) around the city. According to Burda