As part of his ongoing series on Making Sense of the economy, NewsHour correspondent Paul Solman tours real estate in Atlanta, Ga., talking to experts about the current state of the American housing market.
After years of a skyrocketing home prices, the market tanked in 2006, leaving analysts and real estate brokers to wonder when, if ever, it will recover.
In this video, economists Karl Case and Robert Shiller, along with real estate broker Ennis Antoine, give their take on the price of houses in the Atlanta market and beyond.
"The wheel came off the third quarter June of '06. That's when everything started falling apart. Folks stopped paying their mortgages. They wasn't qualifying. Foreclosure inventory went up. And that's when everybody realized, whoa, wait a minute. Maybe the credit was too easy for most people." Ennis Antoine, real estate broker
"Prices are down 30 percent. We believe that, when prices go down, people -- people buy more. So, the attractiveness of this property when prices have been falling for three years is pretty high." - Economist Karl Case
1. Is a house a "consumption good" (something you consume) or an "investment"?
2. What has happened to the price of a house in the past 3 years?
3. What is foreclosure? What do foreclosures do to the economy?
1. What did you learn from this video?
2. How is buying a house like buying stock? What role do "expectations" play in the housing market?
3. If you were one of the two families living in 16-unit Woodlawn Estates, what would you worry about?
4. It's obvious who's hurt when housing prices go down, but who might benefit? See our story of last Feb. here.
5. Do you think it's true that if something like housing prices rise faster than the historical trend, they will inevitably drop back down? Financial advisors always say to "buy low, sell high." But if people did that, there would never have been a housing bubble, right? So why was there one?
6. Are you prone to following the crowd? Do you have any techniques for keeping yourself from doing so? Can you suggest any?
7. Go online and research how the housing market has fared in your community. How has the price of real estate in your town changed in the last few years?
Read the transcript of this report :