As I’m sure many of you know, home prices in many major U.S. cities are still falling. One of these cities is Los Angeles. Bubblemeter.com recently posted a graph showing the trend of Los Angeles home prices. According to the graph, the “city of angels” is still in trouble; but that not what mainly grabbed my attention.
What instantly caught my eye was the sudden jump in prices around 2006. The market’s rapid grown can easily be seen by the provided chart. Sudden increases like this are a clear sign of trouble. This is especially true for real estate since the market is cyclical. What’s just as interesting is how suddenly the market began to nosedive. By 2007, prices began to tank— this was the start of the market crash. This graph also shows the expansion and explosion of the housing bubble—the sudden rise indicates the expansion and rapid drop signifies the explosion.
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