NCW Real Estate Blog

While folks all over the area, state and country have been grappling with solutions to the crisis due to the lack of affordable housing, a funny thing happened.  The market corrected itself and housing is now at one of the most affordable levels in a decade.  Crisis solved?  Hardly.  Government never likes to waste a crisis and they are not done milking this one yet.

Remember that a big contributor to the crisis was regulation that made land for housing expensive while the federal government was encouraging the lending that is now called the sub-prime crisis.  Housing demand was artificially boosted while supply was constrained, thus prices rose.

Now, that artificial boost in the market has largely ended, the market has corrected the affordability crisis.  But I don’t expect the affordable housing industry to go away as well.  We will still have the local cities, counties and state spending your tax money to subsidize housing like this blip in the market was a permanent condition.  These programs seem to be like Pandora’s box and the lid is nearly impossible to put back on once opened.

According to the Wall Street Journal:

Home prices in most of the U.S. have fallen back into line with what the typical household can afford to pay in most of the U.S., according to a new study.

The quarterly report – by economists at IHS Global Insight, a research firm, and PNC Financial Services Group Inc., a banking concern based in Pittsburgh – looks at price trends in 330 metropolitan areas across the country. – WSJ

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