Why is housing in some cities still booming? The answers may help you navigate your own market.
For the most part, the iron laws of supply and demand explain what’s going on…
The basics haven’t changed. Job growth and rising incomes boost demand for, and prices of, housing…
If it’s not demand pushing prices up, it’s got to be you-know-what…[supply]
A trio of economists, Joe Gyourko, Christopher Mayer and Todd Sinai, have argued that persistent growth in cities they dub “superstars” (for example, New York City and San Francisco) is fueled by a limited supply of housing and by a concentration of high-income families who are willing to pay top dollar to live there.
True, both cities have hit bumps in the road in the past, and prices over the past year in the New York metro area rose by only 2.7% while in San Francisco they sank by about 1%. But, Gyourko says, “over the long term they will outstrip the national average.”
Thank you “Craig”. Thank you readers. Thank you commenters. Thank you CNN Money. Have a good weekend.
Why is housing in some cities still booming? The answers may help you navigate your own market. [CNN Money.com]