As the pandemic shifts housing priorities and costs continue to soar, experts assess the potential for a crash similar to 2008's Great Recession.
With home prices and rents rising across the country, Jerusalem Demsas, writing for Vox, attempts to answer the question, "are we in a housing bubble?"
"[T]here’s no agreed-upon economic definition for an asset bubble," writes Demsas. "And in everyday conversation, it appears to mean 'prices have gone up a lot and I think they’re going to come crashing down again.'" Regardless of the label, Demsas argues that home prices depend "on public policy choices that are in our control."
According to research by Harvard economist Robin Greenwood and his fellow researchers, "just because prices rise really fast doesn’t mean it’s a bubble in danger of popping. The definition needs to be narrower than that." A "frenzied ethos" is also a key component. "In general, what people are looking for to determine if there might be a bubble in housing is that the fast price appreciation is detached in at least some ways from the fundamental reasons why prices increase or decrease normally (like supply or demand)."
Regardless of the bubble status of today's housing market, homeowners and buyers, overall, face less risk than before the 2008 crash. "This isn’t a situation where a ton of people have mortgages that they won’t be able to pay off — the marginal homebuyer is wealthier and more secure than in the lead-up to the Great Recession." But "[p]rices are rising, homeownership is increasingly out of the reach of many Americans, and the alternative (renting) is also increasingly expensive, especially in the most job-rich parts of the country. This is an unhealthy, unstable, and unacceptable state of affairs." Demsas blames restrictive zoning laws for "turning an asset that could be widely available into a scarce one" and suggests that local governments should encourage increased density and more housing production to help supply meet rising demand.
FULL STORY: Is there a housing bubble?
Depopulation Patterns Get Weird
A recent ranking of “declining” cities heavily features some of the most expensive cities in the country — including New York City and a half-dozen in the San Francisco Bay Area.
California Exodus: Population Drops Below 39 Million
Never mind the 40 million that demographers predicted the Golden State would reach by 2018. The state's population dipped below 39 million to 38.965 million last July, according to Census data released in March, the lowest since 2015.
Chicago to Turn High-Rise Offices into Housing
Four commercial buildings in the Chicago Loop have been approved for redevelopment into housing in a bid to revitalize the city’s downtown post-pandemic.
New Park Opens in the Santa Clarita Valley
The City of Santa Clarita just celebrated the grand opening of its 38th park, the 10.5-acre Skyline Ranch Park.
U.S. Supreme Court: California's Impact Fees May Violate Takings Clause
A California property owner took El Dorado County to state court after paying a traffic impact fee he felt was exorbitant. He lost in trial court, appellate court, and the California Supreme Court denied review. Then the U.S. Supreme Court acted.
How Urban Form Impacts Housing Affordability
The way we design cities affects housing costs differently than you might think.
City of Costa Mesa
Licking County
Barrett Planning Group LLC
HUD's Office of Policy Development and Research
Mpact Transit + Community
HUD's Office of Policy Development and Research
City of Universal City TX
ULI Northwest Arkansas
Town of Zionsville
Urban Design for Planners 1: Software Tools
This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.
Planning for Universal Design
Learn the tools for implementing Universal Design in planning regulations.