keithp

How Ivory Tower Economists Created the Housing Bubble

Well-reasoned relationship between price / rent, but misses the fact that "all real estate is local". In economically depressed areas, as prices fall rents won't rise because people (most particularly renters) will leave the area for the more economically active areas. Putting increased downward pressure on prices, but there you have it - the demand is for housing where the jobs are less than it is for jobs where the houses are.