Griffin James                                                                                               Wednesday June 26 2013                                                                                                Macro Economics 122

 Dr. Kassens

Blog Critique Spencer Parsons: Home Prices Are Rising, And So Are Sales

            I thought it would be interesting to critique Spencer’s post because of its similarity with my own post.  I also read and analyzed an article on the improving real estate market so I thought it would be interesting to learn more about it.  Spencer’s analyzed a New York Times article by Shaila Dewan titled, Home Prices Are Rising, And So Are Sales. In the article Shaila Dewan discusses the improvement in the housing market along with how our economy is positively benefitting from the improvement in real estate.  Spencer opens his post up by giving as thorough summary of the article I read.  I think it’s important to give the reader a clear picture of the topic you are discussing.  Spencer goes on to discuss how an improving job market is one aspect that is benefitting real estate.  I don’t necessary agree with that because although the job market is improving I don’t think it is improving enough to have a significant effect on the real estate market.  From September 2012, through May 2013 the unemployment rate is fairly unchanged from 7.8 in September of 2013 to 7.6 in June 2013.  I don’t think the .2 change in unemployment is benefitting the real estate market that much. Spencer did a good job addressing the recession and some of the economic factors that led to the recession.   There was an increase in the fixed mortgage rates that led to a decrease in consumer spending.  A decrease in consumer spending at a time when an economy is fragile is not a great thing.  Spencer notes that there was a decrease in consumer spending on Wall Street as well as within our consumer markets.  I believe that the decrease in consumer spending led to a decrease in investment on Wall Street.  Spencer goes on to discuss the ability an improving job market has to boost GDP.  There is no doubt that an improved job market can increase the overall level GDP but how much does the job market have to improve to increase GDP.  That is something I would have like Spencer to bring up in his post because of the focus in which he puts on the improvement of the job market.  The next portion of Spencer’s posts he discusses the author’s alternate view as to why the real estate market is benefitting from the economy.  When consumer spending dramatically decreased during the recession of 2008 there was a significant impact on the housing market.  Less new homes were being built so inventories continued to increase throughout the recession.  I agree with Spencer how homebuilders will continue to benefit as the market rebounds.   As inventories nationwide continue to increase the demand for homes will also increase.  As inventories decrease there will be a demand for old and new homes. This will cause an increase in new home building because as inventories are low more homes must be built to satisfy the demand.   Toward the end of the article Spencer’s discuses quotes a prominent homebuilder whose company has had a large increase in their stock price over the past few months.  This showed that there is a strong demand for new homes.   Overall, I think Spencer did a good job analyzing the article and was able to give good economic input.  I was interested in doing critiquing this article because it was similar to the article that I read.  I think Spencer did a great job getting the authors point across and it was pleasant to read and found it informative.