[OPE] A Different Housing Crisis

Here is a hint of a different dimension of the crisis -- not a main
cause, but something that could be significant.

When we would drive through West Virginia back in the late 50s & early
60s, I was struck by the unemployed coal miners sitting on their
porches. Their houses were quite nice, but nobody wanted to buy them
because the economy was dead.

Later, my brother moved to Youngstown, Ohio after then steel mills had
shut down. I remember when he called me bemoaning that a tornado missed
his home by only a few hundred yards. At the time, arson was the most
important industry in the town.

Theoretically, we might expect that many people would respond to
unemployment by searching for better opportunities. But the
steelworkers in Youngstown and the coal miners in West Virginia would
take such a large capital loss in selling their homes if they chose to
relocate.

Later, I read an article that seemed to validate my intuition.

Read more at

http://michaelperelman.wordpress.com/2009/04/26/a-different-housing-crisis/

-- 
Michael Perelman
Economics Department
California State University
Chico, CA
95929
530 898 5321
fax 530 898 5901
http://michaelperelman.wordpress.com
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