According to real-estate agents, this spring was a very big time to buy homes, and the buying trend continued into early summer. However, with so many people buying houses, the availability of homes began to go down. Even during this buying spree, the markets were still not great in comparison to the beginning of 2015. People were buying these houses for much more than they are worth, and took out massive loans to be able to afford to live in metropolitan areas. In high-demand areas such as California, there is a lot less available land to build on than there was several years ago, so prices are sky rocketing with the lack of availability. With more and more Americans seeking to move away from rural areas and in to more populated areas, it is no wonder that suburban and urban housing is becoming more expensive.
This article had a couple of terms I was unfamiliar with, so I took the liberty of looking up some real estate terms. The article discussed the fact that the "median price" is increasing for houses in metropolitan areas. The median price is just another word for average price on a house. I was shocked to learn that in cities in southern California, the median price has risen to almost one million dollars. Another term that was used a lot in the article was first and second "quarter." Quarters are just time frames of three months based on the calendar year that real estate reports are made at the end of. For example, the in the second quarter (April-June) over 30 metro areas saw double digit median price gains.
The issue with the rise in residential real estate is that as people spend more and more money on houses, they have less to spend in other areas. So consumers are having to be a lot more thrifty with their purchases, which may hurt other commercial areas of the economy. Personal consumption will most likely decline if the real estate prices continue to rise like they have been this year. Less consumer spending could even lead to more unemployment in some businesses, because their won't be enough people that can afford to do things like go to the movies, go on a shopping spree at the mall, or take vacation. Hopefully the real estate market will get better soon and home prices will go back down, but for the foreseeable future it looks like prices are only on the rise.
This article had a couple of terms I was unfamiliar with, so I took the liberty of looking up some real estate terms. The article discussed the fact that the "median price" is increasing for houses in metropolitan areas. The median price is just another word for average price on a house. I was shocked to learn that in cities in southern California, the median price has risen to almost one million dollars. Another term that was used a lot in the article was first and second "quarter." Quarters are just time frames of three months based on the calendar year that real estate reports are made at the end of. For example, the in the second quarter (April-June) over 30 metro areas saw double digit median price gains.
The issue with the rise in residential real estate is that as people spend more and more money on houses, they have less to spend in other areas. So consumers are having to be a lot more thrifty with their purchases, which may hurt other commercial areas of the economy. Personal consumption will most likely decline if the real estate prices continue to rise like they have been this year. Less consumer spending could even lead to more unemployment in some businesses, because their won't be enough people that can afford to do things like go to the movies, go on a shopping spree at the mall, or take vacation. Hopefully the real estate market will get better soon and home prices will go back down, but for the foreseeable future it looks like prices are only on the rise.
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