real estate property taxes in columbus ohio General Information
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The United States housing bubble is an economic bubble in many parts of the U.S. housing market including areas of California, Florida, New York, Michigan, the BosWash megalopolis, and the Southwest markets. On a national level, housing prices peaked in early 2005, began declining in 2006 and have not yet bottomed. Increased foreclosure rates in 2006–2007 by U.S. homeowners led to a crisis in August 2007 for the subprime, Alt-A, CDO, CDX, mortgage, credit, hedge fund, and foreign bank markets. The U.S. Treasury Secretary called the bursting housing bubble "the most significant risk to our economy."
Housing bubbles may occur in local or global real estate markets. They are typically characterized, in their late stages, by rapid increases in the valuations of real property until unsustainable levels are reached relative to incomes, price-to-rent ratios, and other economic indicators of affordability. This may be followed by decreases in home prices that can result in many owners holding negative equity—a mortgage debt higher than the value of the property. The underlying causes of the housing bubble are complex; factors include historically-low interest rates, lax lending standards, and a speculative fever. This bubble may be related to the stock market or dot-com bubble of the 1990s. This bubble is roughly coincident with real estate bubbles in the United Kingdom, Germany and even South Korea.
Bubbles may be definitively identified only in hindsight, after a market correction, which began for the U.S. housing market in 2005–2006. Former U.S. Federal Reserve Board Chairman Alan Greenspan said "we had a bubble in housing" and also said in the wake of the subprime mortgage and credit crisis in 2007, "I really didn't get it until very late in 2005 and 2006." The mortgage and credit crisis was caused by a large number of home owners unable to pay the mortgage as their low introductory rate (sub-prime) mortgages reverted to regular interest rates. Freddie Mac CEO Richard Syron concluded, "We had a bubble", and concurred with Yale economist Robert Shiller's warning that home prices appear overvalued and that the correction could last years with trillions of dollars of home value being lost. Greenspan warned of "large double digit declines" in home values "larger than most people expect." Problems for home owners with good credit surfaced in mid-2007, causing the U.S.'s largest mortgage lender Countrywide Financial to warn that a recovery in the housing sector is not expected to occur at least until 2009 because home prices are falling "almost like never before, with the exception of the Great Depression." The impact of booming home valuations on the U.S. economy since the 2001–2002 recession was an important factor in the recovery because a large component of consumer spending came from the related refinancing boom, which simultaneously allowed people to reduce their monthly mortgage payments with lower interest rates and withdraw equity from their homes as values increased. Any collapse of the U.S. Housing Bubble has a direct impact not only on home valuations, but the nation's mortgage markets, home builders, real estate, home supply retail outlets, Wall Street hedge funds held by large institutional investors, and foreign banks, increasing the risk of a nationwide recession. Concerns about the impact of the collapsing housing and credit markets on the larger U.S. economy caused President George W. Bush and Chairman of the Federal Reserve Ben Bernanke to announce a limited bailout of the U.S. housing market for homeowners unable to pay their mortgage debts.