Critique: The United States Housing Bubble

Critique: The United States Housing Bubble by Jack Dings

I chose to critique this article mainly because after the first time I read through Jack’s entry on it, I quickly felt like his response sounded like an article summary from one or two years ago. This is mainly because he begins by explaining why and how the market crash began. I found this strange because the short article that he chose to write his blog on does not mention the “.com era”, for the article is mainly focused around explanations as to why housing prices dropped so much in February of 2011. Jack also mentions that the United States is now recovering from the housing crisis. While this may be true, this is not what the msnbc article discusses. The article is based around economist’s frustrations on the continuous plummeting of sales for previously owned homes in the United States. February marked the lowest of lows in nearly nine years for sales of these homes. Even when just compared to February of last year, the sales of previously owned homes dropped down 2.8 percent. Jack seems to use his previous knowledge when explaining the housing crisis and fails to touch on the major points of the article.
There are many interesting points of the article that Jack fails to touch on. I find the quotes from Tom Porcelli, the chief U.S. economist for RBC Capital Markets, and David Carter, the chief of the investment office at Lenox Advisors, helpful in explaining what can be expected in the future and what can be done to put an end to the housing issues. Porcelli explains that due to the imbalance in supply and demand within the housing market, we cannot expect any positive outcomes or end to the crisis for at least a year. He also makes a somber prediction that he expects another 5 to 10 percent drop in home prices over the next year, causing a drag on the economy (and GDP) overall. This will only continue to bring our economy down while the lack of selling and purchasing homes negatively affects mostly all components of gross domestic product. Carter’s comments suggest that recovery can possibly be anticipated sooner than Porcelli may think. He sees a potential turnaround in the market due to the recent increase in better affordability. Carter suggests that as affordability hopefully continues to increase, the market’s recovery can be expected. However, he does also touch on the fact that employment must improve to better the economy; even with the recent positive events having to do with affordability.
Overall, I found that Jack’s biggest mistake was failing to make the main points of the article the focus of his blog entry. Looking passed this, he does a good job at using economic vocabulary and terminology. Next time, I would suggest that he pays closer attention to the structure of the article he uses.