Saturday, July 26, 2008

Mark Thoma thinks housing supply elasticities may be assymetric

The basic point is that in markets with lots of land, housing may be supplied elastically during booms, but takes a long-time to adjust during price declines. I have reason to think Mark is right.

My 2005 paper with Mayo and Malpezzi found evidence of this; cities that appeared inelastic included Pittsburgh, Toledo, Albany, Buffalo and Providence. None of these cities had upward pressure on housing production; rather, they were losing population and the housing stock took a long time to adjust to the loss.

1 comment:

davelindahl said...

Dave lindahl scam reports that to avoid from getting in over your head. Have a clear plan for the place and type of real estate asset you seek, the improvements you're eagerly waiting and can make and how long it will take to turn the exact real estate asset around. When you have more experience you have to preserve better.