No One Home

Problems in the housing market continues to put pressure on the economy. Economic expert, Larry Lindsey, a colleague at the Institute noted in the recent Weekly Standard and the things that are likely to get worse before it gets better. He said Lindsay statistical realistic. There are currently

129 million homes in the United States, 18.5 million are empty. It is clear that prices will fall a lot and clear of these stocks.

It may take hundreds of thousands of dollars to build a home. How could it be that so many came to be free?

Mapping near the movement in vacancy rates for two types of homes: those built before 2000, which was built later. The vacancy rate in homes built before 2000 and rose up, only small part, to about 2 percent. This level of inventory on the type one would expect to see a sound in the housing market. However, the vacancy rate in the new homes have increased, and now stands at more than 10 percent.

Chart tells the story simple. As prices rose during the past decade, the building of new homes in more and more questionable areas. With rising prices in the Washington, DC, for example, the massive housing developments that have emerged in parts of northern Virginia, which is painful for a joint center of the city. Conversion rates when the other way, and these houses were not very attractive.

The center of the capital, at the same time, the rise in the construction of new housing units, which are less attractive than single-family homes. When prices are for single-family homes has been slowed down, and speculators who had built condos held trapped bag.

How can all this work? The answer is clear. Central units will become condos for rent, and houses in remote areas and will drop significantly in price. After that the supply and demand will be met again. There are already signs that these changes happen quickly. The proportion of individuals who rent their residence has increased over the past year.

Chart the impact of other readers who live in established neighborhoods: housing crisis may take you.