Question
In: Economics
Question 2. Will Southern California ever stop having real estate bubbles? Write 1 paragraph at most
Question 2. Will Southern California ever stop having real estate bubbles?
Write 1 paragraph at most
Solutions
Expert Solution
Southern California is one of the
most popular and expensive regions in the USA that has witnessed
robust economic growth in the area. It has caused the soaring real
estate prices. Though, such development in the real estate sector,
should not be treated as bubble because the surge in pricing is not
because of the poor lending practices, rather it is the sound
economic growth, lower housing loan rates as well as only a few
properties are available for sale that have led to the surge.
In coming time, the surge in real estate prices will come down and
growth will be moderate due to the reason that employers are
finding it difficult to get the employees outside of the southern
California, making employers to move out of the region to continue
the business. Further, there are now new builders coming to the
area to build real restate properties. It will increase the supply
and real estate prices will come down. Besides, there is always a
constraint of scarce resources and their lack of availability in
the region, will decrease the demand and real estate sector will
grow with the moderate pace as that of other parts of the USA.
Rahul Sunny answered 2 years agoRelated Solutions
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