National bubble or local bubbles?

Home price appreciation has been non-uniform to such an extent that some economists, including former Fed Chairman Alan Greenspan, have argued that United States did not have a nationwide housing bubble per se, but rather a number of local bubbles.[146] However, in 2007 Greenspan admitted that there was a bubble in the US housing market, and that "all the froth bubbles add up to an aggregate bubble."[23] Despite greatly relaxed lending standards and low interest rates, many regions of the country have seen very little growth during the "bubble period". Out of 20 largest metropolitan areas tracked by S&P/Case-Shiller house price index, six (Dallas, Cleveland, Detroit, Denver, Atlanta, and Charlotte) have seen less than 10% price growth in inflation-adjusted terms in 2001–2006.[147] Seven metropolitan areas (Tampa, Miami, San Diego, Los Angeles, Las Vegas, Phoenix, and Washington DC) have appreciated more than 80% in the same period of time.
Furthermore, housing bubble did not manifest itself in each one of these seven areas at the same time. San Diego and Los Angeles maintained consistently high appreciation rates since late 1990s. Las Vegas and Phoenix didn't develop a bubble until 2003 and 2004, respectively.
Somewhat paradoxically, as the housing bubble deflates,[148] some metropolitan areas (such as Denver and Atlanta) are experiencing high foreclosure rates, even though they didn't record much house appreciation in the first place, and, therefore, did not appear to be part of the national bubble. This was also true of some cities in the Rust Belt such as Detroit[149] and Cleveland[150] where weak local economies caused little appreciation early in the decade, but had declining values and increased foreclosures in 2007. California, Michigan, Ohio and Florida are currently states with the highest foreclosure rates.

National bubble or local bubbles? 2008-07-08T08:03:00-07:00 Rating: 4.5 Diposkan Oleh: campos