Don’t Count on a Real Estate Crash

Don’t Count on a Real Estate Crash

July 15, 2005, Commentary by Lou Barnes for NPR

2 minutes 45 seconds.

Nice audio snippet for a principles class. It’s counter-intuitive, short and to the point. It could be used as part of a discussion of the state of the economy.

Barnes observes that five years after the dot com crash, there’s been no real estate crash in Boulder, CO, though prices have been flat, which is as it should be after a boom. Bubble criers confuse financial with real investments. Most families don’t buy homes because they want to speculate, but rather because they need a place to live. Moreover, since the supply of land is fixed while population is growing, real estate prices must rise over the long term.

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