jump to navigation

Causes of the Housing Bust Part III: Conclusion July 9, 2009

Posted by John Watch in AccuriZ Reports.
Tags: , , , , , , , ,
trackback

housing-market-crisis

How does one create additional supply when the population is not growing? 

The answer was to lower the ownership standards and permit those who could not afford home ownership the ability to do so with No-doc, No Asset verification loans.   Home ownership is based on decades of proven lending standards since the Great Depression.  So, did we lower standards to meet demand or were standards lowered to create demand?  In either case, the result is the same:

Did analysts conclude that a loan made to an unqualified buyer at a lower loan amount would be offset by a quality loan from a qualified owner?   Did 3.5 million new home buyers in the market cause a “bubble”?  Did developers, who needed new home buyers to stimulate the housing market ignore supply and demand factors out of greed or just bad analysis?  And finally were new communities in warmer climates, notably Florida developed to attract  those preparing  for retirement or did an influx in migration cause development?

According to public records and property data, there is no less than 4 million excess residential units in the United States, of this over 70% are single family properties.  Given current population growth estimates and natural building activity needs, an absorption cycle of no less than three years will be needed before the housing industry experiences a significant increase in housing starts and achieves development of over 1 million units per annum.

Bookmark and Share
Advertisements

Comments»

1. Penny Stocks Report - February 22, 2013

This is a decent article, may father who was an adviser told me.

. Your investing plan should include a list of reasons for investing.
Figuring out why you want to invest, and what
you are going to do with the money you earn can help you formulate the rest of your
investment plan. It will also help you stay motivated to contribute
to your investments.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: