Explain why housing prices vary from city to city. Clearly explain how supply and demand affect the prices of the homes and be sure to show your work. I have triev everything and looked every where, but I am having trouble with the graphs. Can you please help me?
Think of some major items that affect the demand for housing and some factors that affect the supply of housing.
Affecting demand include:
- quality of schools,
- Income levels,
- Population levels,
- proximity to labor centers,
- transportation infrastructure,
- quality of public services,
- crime levels,
- property taxes, income taxes, etc.
- etc.
Affecting supply include:
- Zoning regulations
- Building code regulations,
- access to building supply materials
- Wage rates of local labor
Start with an initial supply and demand graphs. Then change one of the above factors. (e.g., demand curve shifts or supply curve shifts) What happens to housing prices? What happens to quanty?
For extra credit, distinguish between short term and long term. (It generally takes 6 months+ build a new house.)
Lotsa luck