http://www.nytimes.com/2014/01/26/business/in-housing-big-is-back-not-counting-the-extras.html?ref=business&_r=0
There is now a rebound in the housing market as more and more people start to buy luxury homes. After the recession there was a stall in house sales, but wealthier people are now beginning to buy more expensive and more lavish houses. However, the lower end of the market, the cheaper houses, are still stagnant. Home loans have also increased as wealthier buyers are selling their homes and receiving loans to buy larger ones with added features such as an additional kitchen for food preparation and a media room. In addition, potential buyers are also opting to build their own houses. There is now high demand for expensive homes but low supply, so many buyers are finding building their own house less expensive. They also have more options to customize their house for their needs.
There is now a rebound in the housing market as more and more people start to buy luxury homes. After the recession there was a stall in house sales, but wealthier people are now beginning to buy more expensive and more lavish houses. However, the lower end of the market, the cheaper houses, are still stagnant. Home loans have also increased as wealthier buyers are selling their homes and receiving loans to buy larger ones with added features such as an additional kitchen for food preparation and a media room. In addition, potential buyers are also opting to build their own houses. There is now high demand for expensive homes but low supply, so many buyers are finding building their own house less expensive. They also have more options to customize their house for their needs.
3 comments:
Interesting article. It seems that buyers are having some confidence in the housing market after the recession. In reading the article, Brad Hunter, Chief Economist and director of consulting at Metrostudy explains that "The housing market is being driven by the move-up buyer, the luxury
buyer." The really interesting thing about this though is that it has created competition among the elite buyers. I never would have imagined this. While those buyers with a more modest income are struggling to purchase their first home; many because of hefty student loans hanging over their heads.
This is an interesting article. I never really thought that the market for more expensive houses will bounce back that quickly. However, this is a concern because the people who buy expensive houses are those who have more money. How about the people with lower income? According to the article, “Mortgage applications for homes of less than $150,000 fell 0.6 percent in that period. ‘First-time buyers are having trouble coming up with the down payment and qualifying for mortgage.’” If the lower end market is stalling, then the housing market and the economy have not really recovered yet.
Why would you want a larger home when you are retired? Its not like you will be cooking for your children or anything else. They probably will spend more time in the house now, but if there are not a lot of people occupying the house why have a bigger one? Why need six bedrooms if they will only be used during the holiday season? Is this efficient? I do not think so, its dumb. If you are not using something why keep it? Wouldn't it be better to have what fits the people who are actually living their full-time. Couldn't these people put there money towards something that is actually important besides material things and an extra bar? I wonder how many times they will actually use these extra spaces they built.
I would have expected people to be buying less homes especially since jobs do not seem stable. But maybe this is what our economy needs in order to boost it, when people buy luxury houses a lot of money goes into it as well as a lot of work which employs more people. Or will this create a bigger housing bubble because more people are taking out loans?
This is good for the older population to be increasing the economy but college graduates are really getting hit hard in this economy. Don't you think we should be taxing these people more so that students do not have such a high looming debt over them?
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