Low, Stable Housing Prices: What’s Not To Like?

May 30, 2012

in News

Low, Stable Housing Prices: What’s Not To Like?

The Case-Shiller Housing Price figures for March were released Tuesday, and they reveal a second month of modest price increases. Although a new surge in housing prices might improve the macroeconomy, there is plenty to like in low and stable housing prices, and that’s what we should now expect in a world free from bubbly delusions of constant price appreciation. The two-month increase in the Case-Shiller 20-city index between January and March 2012 still leaves us only 0.2 percent above the post-2006 market bottom. In the long run, we should expect to see prices stay low in most of the U.S. We have an abundance of land. Meanwhile, building technology continues to improve, which should push down the cost of construction and housing. Housing prices can only stay high in areas that limit construction and that enjoy hypercharged economies and attractive amenities – which is why San Francisco and New York remain so expensive. Yet even these areas face competition from upstart cities such as Charlotte, North Carolina, and Austin, Texas. [Read this article]

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