Micro economics project about 4 articles (critical analysis) Essay

Micro economics rove about 4 articles (critical analysis) - Essay ExampleThese days, however, were facing another formidable foe. Its called square estate. Investors (young and old) have a significant portion of their net worth invested in their homes, and were seeing more(prenominal) of them con officer adding an income property to their portfolio.I wanted to see what were up against, so I regorge residential real estate through my usual research process. Just as I do with stocks and bonds, I looked at houses and condos from the perspective of economic fundamentals, valuation and market sentiment.Starting with the economics, it would appear the fork out side of the equation looks manageable (except maybe condos in Toronto). Housing starts have exceeded household formation for a decade, provided the inventory of unsold homes is not excessive. The study side, however, is less encouraging.What drives real estate over the long marches is income growth (i.e. jobs). As Canada bec omes less competitive in the global markets and our governments stop prescribing stimulus, employment trends arent too exciting. In the meantime, our home ownership rate has gone from 62 per cent 15 years ago to 70 per cent today, slightly above the level attained in the U.S. in 2006.Still on the demand side, the demographic charts show the segment of the population thats the strongest net buyer of houses (those aged 25 to 34) is about to start declining, while the pool of potential sellers (over 65) is continuing to increase. The situation is the opposite to what prevailed in the 70s and 80s when the early boomers had a huge wave of buyers following behind them.While supply and demand factors are important, whats really driving real estate these days is financing. Sellers can bespeak fancy prices when buyers are plugging 2 to 3 per cent into their mortgage calculators. But here too, the trends are worrisome. pass judgment have little room to drop (despite Bank of Montreals effort s) and consumer debt levels are now equivalent to the U.S. at its