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Housing Bubble News, May 30, 2006

The Suffolk News-Herald has an interesting OpEd today titled Housing woes.1 The writer, Andy Prutsok, has good insight in the supply-and-demand situation that has created the rise of prices across every market in the U.S. There are those who say there is no housing bubble, and I actually tend to agree with them — prices are higher, but only because the dollar is worth less. Yet the big problem in high home prices is not the price of the house, but the ability of people to pay for their home. If the dollar should fall, we might see prices in other areas go up much faster than our wages do, which could cause many defaults and foreclosures. Both bring about price falls no matter what the money supply is doing (usually getting worth less). Read this entire article at the housing bubble site.