...The Housing Market and Macroeconomics Housing is an important part of macroeconomics. It contributes to our GDP through private investments and consumption spending. This includes purchasing a new or existing home and the costs of maintenance or upkeep on the property, in the form of services. Prior to the collapse of the housing bubble in 2007, the market had seen a steady increase in housing prices, and a decrease in interest rates, due to the increase in the federal funds rate (Arnold pg 379). As interest rates fell the demand for housing increased, thus increasing housing prices. But what caused the housing bubble? There are many different arguments to this question. During this period lending practices became less strict and we saw a move to less traditional lending patterns and unsound lending practices. Banks were lending with less documentation and a smaller required down payment, bringing homeowners perilously close to 100% loan-to-value ratios. Another cause for concern was the complex mortgage-backed securities and subprime mortgages of Fannie Mae and Freddie Mac. The last interesting argument for the cause of the bubble is housing starts and land-use regulations, which I want to discuss further. THE HOUSING BUBBLE In assessing the causes of the housing bubbles, many scholars have focused on the demand-side factors, such as low interest rates, zero down payments, and easy lending terms. However, as Randal O’Toole argues, the demand-side factors were more or less...
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...Key words: Housing market, price, increase, decrease, the bubble in housing market Body: In 2010, from January to October, the investment of national real estate is 3.807 trillion Yuan with an increase of 36.5%, which is 105.1% of the annual investment, 3.623 trillion Yuan in 2009. In the first half of 2010, in the context of macroeconomic stabilization and recovery, the Central Government has issued a series of regulatory policies toward the housing price which increases too fast. The severity and enforcement of these control policies of the housing market are both higher than previously. The performance of the housing market 1. Consumers now are likely to wait and observe the housing market, which leads that the housing price in some cities has a small decline. There are many measures being taken by government to protect the public interest, so many people would like to wait and see how the housing market will develop. Most of them are not willing to accept the current expensive housing price, and they do not want to be entangled into the housing market after they finished their purchase with expensive cost. Therefore, the phenomenon has been speared out, and more and more people are waiting for the development of the housing market. The trades of housing market in some cities have decreased obviously. 2. The real estate is very popular as a means of investment. The domestic economy keeps increasing, at the same time the investment of the real estate becomes...
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...Hong Kong Liberal Party Party Manifesto 1. Our vision and mission Freedom is of paramount importance to our citizens, our communities and to Hong Kong. We, the Liberal Party, strongly believe that freedom is the core value that we should safeguard and preserve to make Hong Kong a more prosperous and thriving international metropolitan. Without freedom, Hong Kong would not be the freest economy in the global arena for many years. Without freedom, Hong Kong citizens and other mass media would not have a channel to convey their ideas and opinions openly. Without freedom, there would not be Liberal Party. Pursuit of freedom has never been an easy task, therefore since our establishment, we have been endeavored to pursue freedom wholeheartedly. We believe that only by preserving this value ceaselessly can Hong Kong maintain her prosperity and stability. Pursuit of freedom is by no means our exclusive mission. In order to make Hong Kong a better place to live in, we also place great emphasis in upholding some irreplaceable values such as equality in opportunity, cultural diversity, justice, love and care. The Liberal Party is committed to attain all these goals by an unshakable spirit, which is to serve the Hong Kong citizens at all cost. The Liberal Party will inherit the proud history and continue to serve Hong Kong with our sincere attitude. We will actively listen to different opinions and voices, and grasp every opportunity to improve ourselves to a higher level...
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...The Current Housing Market compared to TCO’s A & B Supply and demand is a basic economic principal in which a product's price is either positively or negatively affected by the availability of the product. Consequently, if there is a high demand for a product that is in low supply, the price of this product will escalate due to market conditions that will support a higher price. However, if there is low demand for a product that is in high supply, the price of this product will decrease due to market conditions that are influenced by the high availability of this product. By applying this principal of supply and demand to buying a home, it is easy to see how buying a home during a time of high home availability as well as low demand will mean that you will be able to buy a home for a lower price. This is particularly true when comparing asking prices of homes to a time where local real estate market conditions have low supply of homes for sale but high demand of people who want to live in this area. The different points of supply and demand in an area will have a great influence on the asking price of homes for sale. They will also affect a variety of other important financial aspects to buying and owning a home. There are a number of ways that supply and demand changes in a given area. Although the real estate market is considered to be one of the most stable industries in the United States of America with a strong growth tendency, there are certain events that will influence...
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...Introduction For a while now, the price of houses in Australia have been rising and it doesn’t seem to be stopping any time soon. In this assessment, I’m going to be walking you through the many problems of Australia’s housing market and will offer solutions as to how we can fix it. Topic question: Generation Z will never be able to purchase their own homes. Why? How have house prices changed in Australia in the last 15 years? When surveyed, 85% of first homebuyers in Australia believed that an affordable home would be one priced at under $600,000 (Crommelin, n.d). However in Sydney, Australia’s most populous city, the median house price is over a whooping $1,000,000 (Crommelin, n.d). While the nation’s overall median house price had already surpassed $660,000 two years ago (The true extent of Australia’s rising property prices, 2015). With house prices quickly rising, it’s become clear to many, especially first home buyers, that the Great Australian Dream of owning your own home is now far off in the distance....
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...Name Professor Course Date Economic analysis of the current residential housing market in Houston INTRODUCTION This paper provides an economic analysis of the current market for single family homes in Houston. Over the past few years, the real estate market has been declining in most states where prices of homes have been falling. In addition, the number of home buyers has been falling in most cities over the past few years, even after recovery of the economy from the 2008/2009 global financial crisis. However, in Houston, Texas, the real estate market has experienced a stable growth for the last 21 months (HAR 2013). According to a report by Houston Association of REALTORS®, home buyers in Houston increased by 15.5% in February 2013 as compared to the same month last year (HAR 2013). In Houston City, single family homes constitute about 76.5% of the total housing population. During the month of February 2013, 4,407 single family homes were sold in Houston. Single-family home average sales price increased by 9.6% to $220,445 from $201,113 in February last year. The median price also increased by 7.9% to $161,700 in February 2013 (HAR, 2103). Median price is the price at which half of the homes were sold. The above information is summarised in the table below. | February 2012 | February 2103 | Change | Single-family home sales | 3,815 | 4,407 | 15.5% | Single-family average sales price | $201,113 | $220,445 | 9.6% | Single-family median sales price | $149,900 | $161,700...
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...current Australian housing market” Introduction This paper explores the current situation of the Australian housing market. This paper will place a major focus on how macro and microeconomics impact the housing market in Australia. The paper starts off with the Australian economy and the housing market at the moment. The next section is the major part of this essay as it focuses on the macroeconomics factors, which have formed the housing market. The following section briefly explores the microeconomics factors, which have formed the housing market. And finally the last section of this paper ended by a conclusion. Australia and the housing market Throughout the years we have seen a massive change in prices when buying a house in Australia, this is due to many different factors, which have had a big impact on the economy itself. One of the main reasons why prices have been going up is because of the population growth. As we know as the demand increases, price also increases. Recently we have seen a change in people willing to buy a house, they are mostly aged between 22 to 42 years old and in most cases, they can not afford to buy a house because prices in Australia those days have the status of been really peaky and unaffordable. Key macroeconomic factors As the demand for housing is increasing so is the prices, which were paid for them. Because the demand for housing is so high, sellers can make a lot of money and with limited supply for housing and increased...
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...economy already under pressure, the housing market is continuing to decline with expectations for recovery this year dwindling away. Foreclosures are currently pushing the price of homes down making it difficult for homeowners to sell. Changes of income, price, expectations, and changes in processing are excellent examples of supply and demand. The change of income came in the form of $8,000 tax credit for home buyers. What this helped was the ability to buy a house with money they didn’t have. This increased the demand for houses because those consumers, who were eligible to receive the tax credit, get extra money for buying a home and qualify for the loan. When it expired, people were unable to qualify any longer for those houses, putting the whole housing market in a downward spiral again. Currently there are an astounding number of new foreclosures. These foreclosures are drastically decreasing the price of a home. When the price of something goes down typically the demand will increase however in the current situation the demand is staying unchanged causing only the quantity demanded to change. According to Zillow, home values dropped in the first quarter by almost 3% compared to last year’s first quarter making it a consecutive 57 weeks of falling prices. The overwhelming surplus of homes on the market will continue to drive prices down until the “clearing price” is reached. The expectation for 2011 was unrealistic. The housing market was showing progress last year so...
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...Economy in the housing market. Economics is a very importamt aspect of everyday life. It is the driving factor in the world of business and consumers. It is the general understanding of how the economy works and how the supply and prieing of goods are set up. One must understand economics and never take it for granted as it is a very important subject to learn about and comprehend. Through this simulation there were many interesting ares that were covered and many of the problems that were needed to be solved were done in a hand on manner. This is, that the simulation would give the reader the problem and help the reader find the correct soulution by suppying tips and advices as well as knowledge. Many different principals and concepts were covered in the similuation from both macroeconomics and microeconomics. The macroeconomics principals and concepts that were illustrated in the simulation were the city councels ntefereance with the housing market and the fact that the councle put a price ceileing on the housing rent. The city councle started regulating the housing prices and put a ceiling of $1550 which is a govenment interefierence and regulation thus making it a macroecnomics concept. There were quiet a few different microeconomics concepts that were used and illustrated in the simulation. Some of the microeconomic conepts were the fact of regusing the prices of the rental appartments and the vacany rates. These two are categorized as microeconomics because first there...
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...1.1. INTRODUCTION Housing finance or mortgage is the pledging of a property to a lender as a security for a mortgage loan which not only enables access to homeownership but also to meet basic needs – a means of economic empowerment. The mortgage market in Ghana, since it is inextricably linked to a country’s economic development by strengthening financial institutions, promoting social stability and improving people’s lives, should have by now seen enormous growth, culminating in affordable houses for Ghanaians. This, however, is not the case as of now. Government role in the management of the nation’s economy in general and mortgage lending in particular has been analyzed and debated many times and undoubtedly it will continue. There is a...
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...Case Study: Tapping the Ethnic Housing Market MKT 87505 – Consumer Behavior Theory & Analysis California Southern University Case Study: Tapping the Ethnic Housing Market “A subculture is a segment of a larger culture whose members share distinguishing values and patterns of behavior,” (Hawkins & Mothersbaugh, 2010, page 156). Subcultures are frequently encountered in America due to the ‘melting pot’ nature, continual immigration into the United States, and various religious and ethnic viewpoints experienced in modern day society. A collision of all these subcultures in America has led to difficult marketing approaches to address both the core values and norms of the American culture and unique market behaviors, values, and norms that may be specific to other subcultures. In the case study, “Tapping the Ethnic Housing Market,” Fannie Mae evaluated ethnic groups to determine the different perceptions associated with the home-buying process (e.g. reason to purchase a home, knowledge about the overall purchasing process, and confidence in the process). The case study will discuss the opportunities and challenges facing housing lenders and real estate agents today based in the perceptions of each ethnic group. Analysis “Ethnic subcultures are those whose members’ unique shared behaviors are based on a common racial, language, or national background,” (Hawkins & Mothersbaugh, 2010, page 158). The Fannie Mae case study analyzes the different perceptions of the home-buying...
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...All housing markets vary with strong and weak periods so there is really not a perfect time to buy or sell. Nobody can predict the real estate market, but as history has shown, the market will always rise in the long term, so it is still good to know how the market functions. A good economy equals a more potent housing market which additionally fosters more construction and development. The winter months have a tendency to be slower for a few reasons. The primary reason would be the merriments of the Christmas season. A great many people are just excessively occupied and pushed with Christmas. Revolting climate is another reason, as everyone knows their home and yard look better in the mid-year months. On the upside to the appalling climate,...
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...Urban Housing Markets in China Yongzhou Hou Stockholm 2009 Report 88 Building and Real Estate Economics Department of Real Estate and Construction Management Royal Institute of Technology Kungliga Tekniska Högskolan © Yongzhou Hou 2009 Royal Institute of Technology (KTH) Building & Real Estate Economics Department of Real Estate and Construction Management SE – 100 44 Stockholm Printed by Tryck & Media, Universitetsservice US-AB, Stockholm ISSN 1104-4101 ISRN KTH/BFE/M-09/88-SE ISBN 978-91-977302-5-9 Abstract This thesis focuses on problems of prices and risks in the housing markets of urban China. What drives the dynamics of housing prices across regions is not only of great interest for academic researchers but also of first importance for policy makers. It is also interesting to pay attention to the issue of housing bubbles at a city level and risk allocations from an institutional view. To address the issues, the thesis applies both qualitative and econometric approaches in analyzing the urban housing markets of China. The first paper reviews articles mainly published in Chinese core journals. The existing studies are mainly concerned with such six topics as institutions, policy, land, finance, price and market. The first three topics involve the public housing allocation system reform, such fiscal and monetary tools as tax and interest rate, and the land reserve system. The housing finance treats such subjects of mortgages, bubbles and financial systems...
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...an efficient market? Or is Australia in the midst of a housing bubble that can jeopardise the stability of the financial system/economy? At a first glance, from all the media speculation and coverage on the Australian Property market, I believed that the Australian housing market was showing increased prices due mainly to foreign investment. But after undertaking The Financial System subject at UTS, as well as researching and gaining a greater insight into the matter I can state that my hypothesis is in fact that Australia's housing market is inconsistent with that of an efficient market, although it cannot be labelled as a ‘bubble' as a bubble only truly exists once it pops (Duke, 2015). In an efficient housing market, an increase in the demand for property will see an increase supply. Although as seen in Australia over the past decade, this increased demand has far exceeded the supply and driven prices up drastically. Analysis done by the ANZ has indicated that although NSW is on track to construct 56,000 new homes next financial year, demand is expected to grow to 63,000 leaving a shortage of supply by 7,000 and a total housing shortage of 99,137 in NSW alone (Irvine, 2016). This housing shortage is causing frustrating for aspiring first home buyers like myself as prices continue to increase. The Federal Governments initial First home buyers grant of $15,000 for those purchasing property under $750,000 has only led to a further increase in median housing prices driven...
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...challenges facing housing lenders and real-estate agents across ethnic subcultures. Lenders and real-estate agents face different opportunities and challenges among the African American and Hispanics in regards to the housing market. African Americans make up one of the major ethnic subcultures, representing 13 percent of the American population, where on average, are younger than the white population, have less education, and lower household incomes. “One-third of black households earn $50,000 or more and nearly 10 percent earn $100,000 or more” (Hawkins). African Americans are segmented as market leaders or market followers. Within those are generational differences which pose challenges when it comes to marketing because they don’t follow the stereotypical images that they have been subjected to. Many are “driving growth in income and purchase power through education and professional achievement. African Americans represent $799 billion in buying power, which is expected to grow by some 34 percent through 2011” (Hawkins). This fact gives lenders and real estate agents opportunity to implement specific marketing tactics. Internet usage among African Americans is on the rise, allowing marketers to leverage online-based advertising for example. Hispanics represent another major ethnic subculture and have diverse nationalities including people of Cuban, Mexican, Puerto Rican, South/Central America or any other Spanish ethnicity. “The Hispanic market is now the largest...
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