Yesterday we saw the grim numbers on housing starts and construction: a near 50 percent drop in new construction from March 2008 to March 2009. The problem with housing now in the US is twofold, according to Wharton School professor Joseph Gyourko: we built too much, and having negative demand shock. Or to put it another way, "we overbuilt it, and then we had a big recession." In this excerpt of his lecture before a new course at Wharton, The Economic & Financial Crisis: Causes, Consequences, and Policy Options, Gyourko discusses the supply and demand imbalance in the housing market, and how that is likely going to get worse in a recession:
Posted
04-17-2009 10:33 AM
by
Graham Griffith