The latest on real estate recordings and new technology from the Middlesex North Registry of Deeds in Lowell
Robert Shiller, a Yale economists, suggests that US housing prices will continue to decline for a long time. He cites the bursting of the Japanese real estate bubble in 1991 and the resulting 15 straight years of declining prices as one example. In the most recent US experience, the bursting of the real estate bubble in 1990-91, it was not until 1997 that US home prices began to rise again. Shiller says that real estate does not follow the traditional rules of economics. In that universe, when the value of an asset declines, owners of the asset tend to sell quickly which allows the bottom of the market and the subsequent rebound to occur in relatively short order. Real estate doesn’t follow this curve for a couple of reasons. Most folks don’t own homes as speculative investments, so it’s an easy jump from home owner to home renter. That kind of switch brings massive lifestyle changes and occurs not for investment reasons, but usually as a result of severe economic stress. Consequently, most people who contemplate selling their home also plan to buy a replacement - they’re not “getting out of the market” like someone who was dumping all of their stock, for example. While a declining market favors home buyers, the home buyer is also a home seller and is thereby punished by that same market. This combination results on a type of paralysis that makes the effects of a declining market linger.
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