Wednesday, July 13, 2005

Supply and Demand

Bubble may just be bogus
Housing bulls say home prices are soaring not because of a speculative bubble, but for a simple economic reason: Supply has not kept up with demand.

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Meanwhile, the supply of new homes has not kept up with demand because there is less vacant land within reasonable commute distance of job centers, and that's because governments and environmental groups have made it harder to build and developers have not overbuilt like they have in past booms.

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