Thursday, August 18, 2005

Short Term Consequences of the Housing Bubble

The housing bubble has many effects. What are the pluses and minuses of this housing bubble? Tthe below lists are just some of the effects of the housing bubble.

Short Term Pluses ( while the housing bubble has not popped)
  • 'Helping' the economy
  • Jobs being created
  • Strong consumer spending
  • Rising amount of assets
Short Term Minuses ( while the housing bubble has not popped )

  • Significantly reduced amount of affordable housing
  • People stretching and overextending themselves to buy houses ( 'house poor')
  • Lack of investment in export orientated industries.
  • Contributes to the trade deficit by encouraging more spending by people using home equity loans

4 comments:

  1. "affects" is a verb. You mean "effects".

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  2. thanks. It has been changed.

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  3. Negatatory: People are much less likely now to actually own their houses. This may change in the future if wages and salaries increase significantly. But as it stands now...

    Negatory: Younger folks cannot afford to live close to where most of the work is. So they have to drive insane commutes which costs them in gas purchases and puts more crap into our air.

    Negatory: Grown children cannot live close to where their parents live. This has societal implications.

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  4. You can't make that affordable housing statement strongly enough. It used to be that affordable housing was considered "low-income housing," but not anymore. Now the term "affordable housing" is being applied to the middle class. But still there are those who would have you believe that there's nothing wrong with this market. Cole @ BigHousingBubble.

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