The Housing Bubble: Analysis of the San Diego Housing Market's Boom and Bust

Real estate bubbles and bursts have happened all over the world with the most prominent happening in Japan in the late 80 's . These bubbles are caused by many factors and builds up over years of wrong economic decisions and policies . Real estate bubbles happen when the cost of the property is speculated to be higher than the real cost . This overestimation of the price of real estate makes the houses bought unaffordable to the people who bought them in the inflated price

An example closer to home is the San Diego housing

market . The price of real estate in San Diego has more than doubled its cost in a span of a decade from 1995 to 2005 . This speculated cost that made the prices of real estate more expensive than they actually are is called the bubble When the real price of estate came up and pushed the real cost of the houses lower than how much the homeowners initially agreed to pay for many opted to voluntarily default in their payments because they feel that their property is not worth is anymore , while others were forced out of their homes for lack of personal financing

There are many reasons why this happened compounded over the years Factors which include sub prime loans , ARM loans , fraud , speculation mortgage and investment bankers , and monetary policies were executed under bad judgments due to the lack of moral and ethical standards and preemptive regulation from the federal government . With the only principle...