Smarter investment options and the ability to gain research and insight into money management is not longer the privilege of only the upper class.
Where Europe and other older societies has class distinction to define position in society, the U.S. uses "square footage" of their homes as their status symbol. It is established that most homeowners in the U.S. move on to a larger home in about 7-10 years. Homeownership is also linked to the employment rates in the region and the type of industries and income sources that can be obtained. For example, New York and San Francisco always experience a high demand for housing due to their proximity to industry and jobs. It is observed that even section of New York City like the Bronx, have been experiencing a rising trend of housing demand.
The dwindling supply of available land has made location an important factor that drives the supply, demand and prices for housing. "Regulatory and natural constraints on land use are driving up land costs, restricting development of affordable housing." (Chappell-Theunissen, 2004)as the Fed's interest rates continue to climb, the demand for housing might slow down. In the past, housing market crashes generally fooled increased interest rates. However, in spite of the downturn in the U.S. economy in 2000, and the relatively slow upswing, the controlled interest rates have helped the housing market grow. If there is an excess supply for the housing industry when compared to the demand the prices in many of the overheated section of the country will drop significantly. Economists and market trend predictors have been stating that this could happen...
It is still unclear if the bubble will really burst.
Americans are looking for atmosphere, elegance, and ease of maintenance within the confines of their homes." (Chappell-Theunissen, 2004) Old or new home that have the ability to satisfy this growing demand and expectation of the public will find buyers in the current market. Demographics and the personal preferences are also changing. Retiring adults, for example, are no longer retiring to warmer places permanently; rather they are choosing to maintain more than one home and using both to a similar extent. Another very disturbing trend that is also being observed with respect to housing is that Americans are spending higher percentages of their salaries on housing than in the past. Keeping up this trend might result in financial hurdles for the population in the future. Currently supply, demand and prices are all rising collectively for homes in almost all sections of the country. This trend has resulted in lower income groups having to travel further to afford homes or living in questionable conditions in the region.
Bibliography
Chappell-Theunissen, Joanne H. "Strong Home Building Industry Is Bright Star on Economic Horizon." Air Conditioning, Heating & Refrigeration News 222.9 (2004): 1.
Clark, Kim. "Through the Roof." U.S. News and World Report 2005: 46-49.
Ford, Constance Mitchell. "The Economy; the Outlook: What's Behind Hot Home Building Pace?" Wall Street Journal March 21, 2005, Eastern edition ed.: A.2.
Lurz, Bill. "Trouble Bubble... Or Not?" Professional Builder 69.8 (2004): 88.
