Economics 201 (Baker College Direct Credit)

There was a price increase in housing between the years 2000 and 2006 in major cities which caused an economic decrease in all of the cities. Renting a house became a lot cheaper than just buying a house because house prices were too expensive for most families. In Ft. Meyers, Florida in 2008 the housing market crashed because people were just buying houses and selling them for more money. People then realized that the prices of these houses were too much for families actually looking to live there and this caused a dramatic drop in the selling of the houses. The loss of the selling and creating of houses took a huge toll on the economic stability of the town it is taking place in. Less jobs are created and more people are unemployed because of the decrease in home sells.

    The economy in 2000 to 2005 was raising because everybody was buying houses.  Unfortunatly, everybody was buying houses to sell houses at a higher price.  The economy in cities like Ft. Myers were doing good and booming because of this.  Then when everybody noticed that the prices for a house were unrealistic the housing market came to a standstill and crashed dragging along the economy of Ft. Myers with it.  The future outcome of this is the unemployment rate skyrockets.  People loose their houses because of bank foreclousures.  Buissness' fail and those people lose their houses and nothing happens.  Everybody is at a standstill because their are no jobs to make money.  No money to buy anything with, and you are in limbo.

The prices of houses are always increasing and decreasing. The price in the housing markets nearly doubled between the years 2000-2006. Some economists think that this rise is excessive and called it a “bubble”. This makes it very difficult for people to buy a house and also sell their houses.  It became much cheaper the rent a house rather than buy one. In 2008 the housing markets crashed because people were buying houses and turning around to sell them for more money. This made it so a lot of families could not afford to buy houses. This had a major effect of the economy. There is less jobs created because no one is building houses leaving a lot of people unemployed.

                Rachelle Reihl

1/31/13

            Between 2000 and 2006 there was a huge increase in the price of houses around America. Those home prices rose much more than the cost of renting a place to live making more of a demand for rentals. During this time, there were also people who were buying houses not to live in, but who wanted to resell them for a much higher price. People were buying houses as investments and selling them to others who were also buying as investments. This led to prices that rose to levels far beyond what people who actually wanted to live in house were actually willing to pay. With this being said, the housing market collapsed taking the economy with it. The business cycle is driven by ups and downs in investment spending. Changes in this, indirectly lead to changes in consumer spending and affects the economy all together.

Emily Ruckle

ECON 201

1-31-13

Article Response

            Prices for houses went up between 2000 and 2006, so those years would not have been good for buying houses.  Because the price skyrocketed, not as many people were buying houses.  It would have been more cost efficient for someone in need of a house to rent instead of buy because rent prices only grew slowly.  However, in 2006, home prices began to slowly level off and as they fell, so did the demand for housing.  A town that shows a good example of this is Fort Meyers, FL.  In 2003, 2004, and 2005, Fort Meyers was a huge town.  The unemployment rate was less than 3%.  This was because there was a lot of construction building houses that people believed could be sold for a lot more.  In 2005, people realized that house prices were no longer in touch with reality.  The housing market then collapsed.  After that hap**d, a lot of houses in Florida got foreclosed because the demand went down.

There was a huge increase with the price of houses in america within a six year span. Many people say that these prices were outrageous. Buyers expectations about future prices were unreal, prices then dropped and the demand for houses fell drastically. This could happen in the future if the prices for houses do not drop soon. Many people are taking advantage of all of the forclosed houses and buying cheap ones just to sell them. This is fueling the economy in little ways because employers are getting more business therefore hiring more employees.

For the reading that we did it gives us an example of the downfall of our economy right now.  On page 703 and 704 it discusses how the business cycle helped everyone and then slowly the businesses started to fail leading others to fail as well. Almost like a chain reaction. The town Ft. Myers had a boom due to house construction. They gave jobs to construction workers, electricians, roofers, real estate agents and more. These led to those workers spending their money locally and help creating jobs for others for economic growth. But it stopped when people finally realized how much they were spending on houses due to prices going up and up causing everything to come crashing down.  This is what page 697 is talking about also. But not about just one town, about everywhere in the U.S. and how they ended up losing so much money. Soon almost every household didn’t have someone employed. And cause the huge issue of economic issues and our downfall.

In a gap of six years there was a huge increase inthe priceof houses in america. Many people argued that these prices were ridiculous.Buyers had unreal expectations about future prices. The prices then dropped and the demand for houses fell drastically. This may happen in the future if the prices for houses do not drop sometime soon.  Some people are even taking advantage of all of the forclosed houses and buying cheap ones just to sell them for more money. This is also fueling the economy in little ways because employers are getting more business therefore hiring more employees.

Hannah-Mae Boyd

ARTICLE RESPONSE

In 2003 to 2005 homes were at a higher demand. This was not because people wanted to live in them, but the owners thought they could sell the houses for much more than they bought them for. The pricing of houses went up drastically in 2006. House buyers held unrealistic expectations for the future prices of homes. People bought for investments, and then sold to people who were also buying for investments. The prices had risen beyond what people were willing to pay. Then the bust hap**d. As home prices fell the price of housing fell drastically. By October 2008 unemployment rate was 9.5%. This caused severe stress on the banking system. Real estate agents then began offering foreclosure tours. Foreclosure tours were for houses that were seized by the bank because the owner could no longer make their mortgage payments because they had no jobs. These houses were available at a bargain price also. The houses were being sold at a cost less than the amount that was put into the house.

Stores then began to close because they had fewer customers. When the housing market crashed, the local economy went with it. Jobs created by building houses went away, this hap**d to make a fall in local spending, the fall of local spending lead to less jobs because not enough money was coming in. this also means the companies spent less money because they didn’t have much. This is exactly what happens everywhere. 

Article Response

                In 2006, the prices of homes went up dramatically. Home buyers and builders had high expectations for the housing prices in the future; however, the prices for homes ended up falling significantly. This issue caused severe stress for banks and lending companies.

                There were many homes to sell, because between 2003 and 2005 many new homes were built, as the builders expected to be able to sell the homes for a higher price than they paid, which at the time seemed like a good investment. The prices of these homes were higher than what people were willing to pay. This caused a crash in the housing market, which added to the economic downturn already in motion. Many home-construction related jobs were eliminated, which caused the decrease in local spending. Jobs became scarce, causing a lower overall income. The unemployment rate was up to 9.5% in October of 2008. Due to a decrease in customers (because no one had much money), many businesses were forced to close, causing even more people to be unemployed. Foreclosure became a popular trend, and real estate agents worked tirelessly to try and sell foreclosed homes for lower prices.

Journal Response

                Between the years of 2000 and 2006 there was a huge increase in the prices and costs of homes in big cities. People selling houses in these areas had unrealistic fantasies about the prices of their homes, and up and coming homeowners could not purchase homes at these high costs. This resulted in an increase in renting because it’s all the average person could afford to buy. This housing market bubble causes cities like Fort Myers Florida to crash. And with the poor economy, no one has the job or money to spend on these expensive homes, and we are stuck in this loop that is slowly spiraling down.

In 2000-2006 there was an economic growth through the construction of building houses but there was also an increase in price for houses. It was literally better off to just rent instead of buy.  In 2002 through about 2004 the unemployment rate was almost 3%.  then in 2005 the housing market collapsed and lots of houses got forclosed.

Between the years 2000 and 2006, there was a price increase in housing which caused an economic decrease in all cities. It became more cost efficient to rent a house instead of buying one because most families couldn’t afford a home. If families did buy homes, they purchased them for investments and then sold them to people who were also looking for investments. Then the bust hap**d. The bust caused not only the home prices to decrease, but also the price of housing. By October, 2008; the unemployment rate was at an all-time high of 9.5%. Because this was such a struggling time for the economy, real estate agents began offering foreclosure tours to promote homes that had been seized by banks and sold at a lower price. When the housing market crashed, everything crashed along with it; including the local economy. Builders were out of work because no one could afford to build; shopping centers were bare because they had fewer customers. No one had any money, so money was not being spent. Therefore, establishments had to sacrifice employees because they couldn’t afford to pay them and respect their benefits.

Ashley Mathis 

Between the years of 2000-2006 there was a huge increase in the price of houses. Buys had unreal expectations about future prices. The prices then dropped and the demand for houses fell drastically. This may happen in the future if the prices for houses do not drop. Some people are even taking advantage of all the foreclosed houses and are buying them and selling them for more. This is also fueling the economy in ways because employers are getting more business.