Friday, April 21, 2006

Higher Housing Prices Really Does Mean Higher Housing Costs

It seems that ordinary people ignore the view by the Bureau of Labor Statistics and many economists that higher housing prices really does not mean higher housing costs. As pointed out in this article, domestic migration in the United States tend to be negative for areas with high housing prices in the North East and the West Coast, particularly New York, Washington D.C., Los Angeles and San Francisco and their sub urbs while net migration is positive for states with lower housing costs in the Sun Belt.

While the domestic net outflow for the high price are compensated by a large inflow of foreign immigrants (they're the ones that keep prices high when the natives sell), it seems that most ordinary Americans take the correct view that higher housing prices really does mean higher housing costs.


Blogger Martin said...

Maybe that view is correct in the US, but how about in Sweden and many other parts of Europe? We've got both wealth-tax and property tax, and rising assessed values (taxeringsvärde), as property prices rise.

/Another swedish (Stockholm) economist

6:04 PM  

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