A Stupid Question About Housing Prices

December 28, 2012 7:52 am

1. If prices go up due to increase in demand (availaility of housing loans), we shout “it’s a bubble”
2. If prices go down due to increase in supply (inability to pay, foreclosures etc), we shout “it’s a crash”
3. If prices go up due to decrease in supply (low housing starts) we shout “housing has stagnated”
4. If prices go down due to decrease in demand (people thinking that the prices are high), we shout “banks are not lending, this is not the true picture”

If supply and demand cannot explain housing prices, we are forced to ask:

“What forces do we think should truly drive housing prices?”

For Interesting Statistics Everyday, Find Statspotting on Facebook and Follow Statspotting on Twitter

1 Comment for “A Stupid Question About Housing Prices”

  1. Caleb Rackliffe

    Household income is a good starting point, but that is most useful when examining things in a purely domestic context.

Leave a Reply