Thursday, August 18, 2005
Condo bubble
For the first time, the median price of condos is greater than the median price of single-family homes. Is this due to the much-heralded movement of empty nesters to the inner cities? No, more likely it is due to speculative bubbles, particularly in regions such as San Jose, Boston, and the San Francisco Bay Area where condo construction has been driven by land shortages caused by land-use restrictions.
As I've previously noted on this blog, the population of inner cities is growing, but that growth is insignificant compared with the continued growth of the suburbs. For example, one research paper from Fannie Mae found that the downtown areas of twenty-five cities grew by about 50,000 people during the 1990s, while their suburbs grew by more than 6.8 million people. So, except where smart growth has driving up land prices, condo demand is hardly more than a tiny blip on the real-estate radar screen.
As I've previously noted on this blog, the population of inner cities is growing, but that growth is insignificant compared with the continued growth of the suburbs. For example, one research paper from Fannie Mae found that the downtown areas of twenty-five cities grew by about 50,000 people during the 1990s, while their suburbs grew by more than 6.8 million people. So, except where smart growth has driving up land prices, condo demand is hardly more than a tiny blip on the real-estate radar screen.
Comments:
Post a Comment
