On the Housing Market Resurgence

Posted on Posted in Financial Stories
Another article demonstrating our flexibility in economic writing:

The housing market has seen a turnaround recently. Builders are looking for more worker for homes and homes are selling well. This has happened due to several interesting economic signposts.

Home prices have made massive gains in recent years. In fact things are going so well that some fear that another bubble may happen in the future. There are supposed to be restrictions on big companies with Synthetic CDO interests to avoid another collapse. Of course we will see how well the government watches companies once we start compiling toxic assets. Another bubble is far from impossible.

One of the biggest factors in this turnaround is China. Many Chinese firms are flush with capital and they are buying quite a bit of land. Both regular homeowners and businesspeople from China are buying homes in America to the tune of around $68.2 billion.

Part of this is due to the fact that international marketing has become big business. Sites like HomeLight make international home buying easy. You can broker a transaction online with little trouble and have a home within days, if you have the money for it.

However these factors do not mean that things will be easy for builders. While sites like HomeLight may help agents builders are currently flush with work and need employees. This is yet another reason that some worry about a bubble if builders cannot keep up with demand.

However these worries are largely unfounded as the previous bubble was caused by backroom deals and corporate tricks. If it happens again it will most likely be for exactly the same reasons.

Two other factors are also indicative of large sectors of the economy, and you may be surprised to hear about one. Gold price has been falling which indicates parts of the economy are doing better. Why is this? Because people buy safe securities such as gold more often when stocks are unsafe.

The other factor is the growth of jobs. Job growth usually leads to economic growth which in turn leads to a better housing market.

So what does all this add up to? For the moment you can expect a rather strong economy. However things are tenuous at best. However if things work out we could see quite an upturn in our economy as a whole. Investors would do well to pay attention to all the factors previously mentioned.

 

 

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