The Housing Market’s Downfall

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In my previous post I began to look at the history behind the housing market bubble, and its eventual downfall.  I have found the housing bubble to be particularly interesting because I come from an area in California where the bubble had a very strong impact.  Many people during that time thought that they could finance a nicer home through selling their old one.  The big problem was that they purchased the new house without selling the old one and now they can’t afford either of them.  Houses in certain blocks stood vacant for months, and a lot of homes were turned into rentals. While my earlier post mentioned some of the benefits of renting, one major downfall is that rentals cause other homes in the area to lose value because the rentals aren’t always kept to the same standard. 

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Further Research: Alan Greenspan’s Take on the Causes of the Recession

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In preparing to write the final paper I have come to the conclusion that I desire to focus on how the actions of economists and large firms like Lehman Brothers led to the current economic recession. My preliminary explorations suggested to me that both economists and Firms like Lehman brothers had a sense that the market was now safe and that they could predict its course of action with ease. As I mentioned in my post last week, the belief that the market had become “inherently stable” led market actors to make decisions that ultimately resulted in financial crisis. Moving forward, I want address the question of why they acted in the manner they did in a little more detail, but more importantly I want to understand how the actions of economists and large firms caused the market to collapse. In addition, I want to see if there was a chance to avoid this recession by looking at the case of Lehman Brothers and exploring their organizational actions prior to the recession; hopefully enabling me to identify points in time where actions could have been taken to avoid the downturn, what those actions were, and who should have undertaken them. However, to do so I still need to look more deeply into the causes of the recession.

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Buy or Rent: The Big Dilemma

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When exactly did the downfall of the housing market start? Many play around with dates from the 1980s to September 11, but one woman takes it back even further than that.  Alyssa Katz  wrote the book Our Lot: How Real Estate Came to Own Us and brings up housing market problems that started as early as the 1970s. It is hard to think about our problems that are well over 30 years later being so closely connected with the politics of the 70s, but Katz explains how everything is connected. Continue reading