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  • How to Solve the Excess Supply in Housing [View article]
    Econ 101.

    Larger supply + Reduced demand = Lower prices.

    It's as simple as that. The excess supply won't go away until prices come down to a point where incomes can support the payments.

    The fact is that people paid 'too much' for the houses they bought, whether it was for their own home or for rental investment. The amount they paid in the past has no bearing on what the house 'should' be worth. Supply and demand sets the price, not 'what it used to be worth' or 'what I paid for it'.

    Any attempts to deny those facts are simply rationalizations to avoid the reality that people have lost money from past decisions. While that isn't a pleasant thought, it's not one that will change by ignoring it. Those who acknowledge reality and deal with it first will be the ones who recover the earliest.
    Nov 17 10:02 am |Rating: 0 0
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