Housing Prices in the U.S. and Abroad
We have a double dip in U.S. housing prices. But, is it happening everywhere? A Goldman Sachs research report from mid-May provided an OECD (Organization for Economic Cooperation and Development) summary.
- The most troubled: Struggling euro zone countries remain the most distressed. Housing prices in Ireland, Spain, Greece, the Netherlands and Italy have continued to slide.
- Moderately declining: The U.S. falls into this category as well as Denmark, Korea, and many euro-area countries.
- Rebounding: Canada, Norway, and Australia have experienced double digit increases. Less robust but still rebounding, housing prices in France, Germany, and New Zealand have been going up.
- Steadily rising: There actually were countries that sidestepped the housing bubble cataclysm. Switzerland and Belgium have not seen any meaningful drop in prices and now, they continue to rise.
The Economic Lesson
How might a supply and demand graph illustrate the U.S. moderate decline in the housing market? The key is our equilibrium price, the point where the demand and supply curves meet.
What is making this point move downward? Is it a shift in the demand curve because government policy is no longer fueling demand? Or, is it the supply curve sliding downward because of an ever increasing number of houses that people offer to sell each time prices appear to rise?
An Economic Question: Using this Washington Post graphic of housing prices in 12 cities, create your own story of how the housing bubble popped in different places.