Everyone with half a brain knows that the recent Great Recession was caused in large part due to a housing bubble. A housing bubble “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 and then decline”.
Well, in my last post I noted how fast the poverty rate was going up in suburbia. If you clicked through to the source article you should have seen this little tidbit:
Fortunately, things are turning around in the Phoenix area. The housing market is currently performing better than any other, according to the FHFA’s most recent Home Price Index release. In the first quarter of 2013, home prices were up 15.3% from the year before — the largest increase in the country.
Unfortunately, the reality is that there is nothing fortunate about it. Unemployment and underemployment (something NOT being discussed by the MSM and politicians but desperately needs to be) is still very bad. Tons of people are still moving into the Phoenix area looking for housing. New construction has still not recovered to previous levels (thank goodness in one sense, they were building housing developments and destroying the beautiful landscapes just for giggles and then they would sit empty for months and months BUT it’s bad in another sense. It was a source of employment for many and a major economic health indicator).
So housing is at a premium. Rental prices are going up. I ought to know, I just moved, again. Absentee landlords and crappy management companies aren’t maintaining their existing rental properties. Again, I ought to know. I just moved into a house that sat empty for too long, was poorly maintained, and turned over to me in such poor condition that I’m thinking about breaking my lease and getting a lawyer to sue the management company and landlord. And this is happening all over the valley (housing inspector confided this to me)–this is a real problem. Combine all this together and we find that the prices of housing isn’t going up because those properties are being improved, or because more people are moving up and out to the suburbs. They’re going up because the economy is weak and desperate people are struggling for limited resources. It’s the worst kind of inflation, not a sign of healthy economic growth.
You’d think we would have learned our lessons the last time. I wonder how long it will be before it all crashes down again. I wonder how long it will take the conservatives who have controlled the economy since Reagan (even during Clinton years, the Republican Congress had him by the ball sack) and who created this economic mess begin to blame the liberals. Counting down….3….2……