News Review – Article Example
Article According to Lerner, the cost of owning a condominium or townhouse largely depends on demand versus supply characteristics. Indeed, the house prices are said to range from $100,000s with some houses even going for $1 million. Houses in towns have shown up to 34% absorption rate with low priced houses recording the highest absorption rate values. Another interesting trend shows that potential buyers prefer smaller but low priced houses providing the houses are within township. One fact however remains that supply of new metropolitan houses still lags way behind the demand for such houses.
The cost of owning a townhouse or condominium ranges from $100,000s to $1 million. The demand for houses is directly proportional to the distance from the township center. The demand versus supply graph is as shown below
Given the graph above, discuss the best place to buy a house for a family with a total monthly saving of 2000$ with no family car (Assumption; all family members work within the city epicenter). Is it economically viable to buy a house on city’s epicenter on a mortgage or save and buy a house beyond city outskirt on cash basis?
A suitable answer key
When discussing the above question it is important to note that demand for housing in the center of any town is often very high causing prices to skyrocket. However, house value in city centers tend to rise with time at a fast rate compared to houses outside town. On the other hand, purchasing a house on town outskirts is often affordable but comes with additional transport costs and lowly appreciating house value. Using demand versus supply curve as well as price trends can be a good tool for determining best place to buy a house.
Lerner, Michele. Shoppers looking for mid-priced condos, townhouses feel a squeeze. The Washington Post. 2015. Web 23 March 2015.