[ghns] NUMBER ONE Success System
Tommy Lee
noss1233 at gmail.com
Wed Aug 22 06:33:55 PDT 2007
http://www.noss123.com/
In attempting to identify bubbles before they burst, economists have
developed a number of financial ratios and economic indicators that can be
used to evaluate whether homes in a given area are fairly valued. By
comparing current levels to previous levels that have proven unsustainable
in the past (*i.e.* led to or at least accompanied crashes), one can make an
educated guess as to whether a given real estate market is experiencing a
bubble.
Indicators describe two interwoven aspects of housing bubble: a valuation
component and a debt (or leverage) component. The valuation component
measures how expensive houses are relative to what most people can afford,
and the debt component measures how indebted households become in buying
them for home or profit (and also how much exposure the banks accumulate by
lending for them).
A basic summary of the progress of housing indicators for U.S. cities is
provided by *Business Week
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