The article by Matt Woolsey published in the Newsweek and titled ‘How Low Will Housing Go’ focuses on the anew trend developing in the real estate market pertaining to the sudden hike in real estate prices in the United States. The article highlights how some of the cities in like those inFloridahave been particularly hit by the phenomena therefore, resulting in excessive increase in housing prices in the region.
The crisis faced by the mortgage and real estate industry due to excessive lending to the sub prime market and inefficient management of loans saw the house prices, specially the listed prices of the real estate to go down significantly. While in the last two years little or no recovery has been made, the sellers on the other hand have adopted a strategy to make profit on the sale of their properties. The article provides that sellers have started a bidding war amongst the buyers who bid excessively high for the property depicted the much lower listed price as provided by valuation agencies and financial institutions. This increase in the bidding has lead to inflation in the housing and property prices all over theUnited States. However the metropolitan cities the likes ofMiami,.JacksonvilleandOrlandohave been reporting excessively high level of inflated property and real estate prices, while on the other hand they are also registering high levels of unemployment. The increase in the demand for the housing is exploited by the sellers who refuse to sell the house, until the buyer is able to propose a bid well high enough above the listed price to generate a healthy profit for the seller. This artificial lifting of the prices is also adding to the very slow recovery of the mortgage industry though low levels of refinancing activity.