13
Mar
10

Housing Bubble


A real estate bubble or property bubble (or housing bubble for residential markets) is a type of economic bubble that occurs periodically in local or global real estate markets. It is characterized by rapid increases in valuations of real property such as housing until they reach unsustainable levels relative to incomes and other economic elements, followed by a reduction in price levels.

Typically, prices go high on speculations and rumors, and the bubble just builds on. And when it builds on, sales are high, mortgages are easy, credit availability is easy and this goes on till there is a crack (an incident) causing panic and the bubble burst.

It is argued that the financial crisis of 2007-2010 (not really sure if I can mention 2010 as the last year of the crisis), was due to the real estate bubble.

Within mainstream economics, some argue that real estate bubbles cannot be identified as they occur and cannot or should not be prevented, with government and central bank policy rather cleaning up after the bubble bursts.

Some of the recent popular bubble bursts are:

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So what’s this blog about?

Another attempt? Well yes. Attempting to figure out another sustainable model (there are some other attempts going on parallel-ly). Well, we have a lot of questions in mind. we read up stuff, we do some research to find answers to these questions. This is an attempt to publish that little 15-20 minute research.

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