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The sale of houses in the United States have surprisingly increased due to the fact that the prices have dropped to it's lowest in four years. This resulted in more single family homes by 2.7%, and the sale of homes increased by 5.5%-- something they haven't seen since five years ago. Ｂｙ ｔｈｅ ｅｎｄ ｏｆ Ｓｅｐｔｅｍｂｅｒ, ｔｈｅ ｎｕｍｂｅｒ ｏｆ ｕｎｓｏｌｄ ｈｏｕｓｅｓ ｈａｖｅ ｇｏｎｅ ｄｏｗｎ ｂｙ ａｐｐｒｏｘｉｍａｔｅｌｙ ２５％. Ｔｈｅｒｅ ｗａｓ ａｌｓｏ ａ ｄｅｃｌｉｎｅ ｏｎ ｈｏｕｓｅ ｃｏｎｓｔｒｕｃｔｉｏｎ. Not only did the decline of house construction affect the United States in a way ｔｈａｔ limits the amount of house choices for the citizens, but it also affects Canada as well. Ｔｈｅ Canadian Ｆｏｒｅｓｔｒｙ Ｉｎｄｕｓｔｒｙ ｓｕｆｆｅｒｅｄ ｂｅｃａｕｓｅ ｔｈｅｒｅ ｗａｓ ｎｏｔ ｅｎｏｕｇｈ ｄｅｍａｎｄ ｆｒｏｍ ｔｈｅ Ｕｎｉｔｅｄ Ｓｔａｔｅｓ ｆｏｒ ｔｈｅｉｒ ｐｒｏｄｕｃｔｓ, ｔｈｅｒｅｆｏｒｅ ｍａｎｙ Ｃａｎａｄｉａｎ ｍｉｌｌｓ ｈａｖｅ ｂｅｅｎ ｃｌｏｓｅｄ ｄｏｗｎ, ａｎｄ ｊｏｂｓ ｌｏｓｔ. Ｅｖｅｎ ｔｈｏｕｇｈ ｈｏｕｓｅ ｓａｌｅｓ ｈａｖｅ ｇｏｎｅ ｕｐ, ｔｈｅ ｒｅｃｅｓｓｉｏｎ ｔｈａｔ ｔｈｅ Ｕｎｉｔｅｄ Ｓｔａｔｅｓ ｔｈａｔ ｍａｎｙ ａｎａｌｙｓｔｓ ｂｅｌｉｅｖｅ ｔｈｅｙ ａｒｅ ｉｎ, ｉｓ ｃｏｕｎｔｅｒａｃｔｉｎｇ ｗｉｔｈ ｔｈｅ ｓａｌｅｓ. Ｔｈｅ ｌｏｗｅｒ ｔｈｅ ｅｍｐｌｏｙｍｅｎｔ ｒａｔｅ ｉｓ, ｔｈｅ ｌｅｓｓ ｄｅｍａｎｄ ｆｏｒ ｈｏｕｓｅｓ. Ａｌｔｈｏｕｇｈ ｔｈｅｒｅ ｗａｓ ａ ｄｒｏｐ ｉｎ ｔｈｅ ｎｕｍｂｅｒ ｏｆ ｕｎｓｏｌｄ ｈｏｍｅｓ, ａｎｄ ｔｈｅ ｓａｌｅ ｏｆ ｈｏｍｅｓ ｈａｖｅ ｂｅｅｎ ｇｒｅａｔ, ｔｈｅ ｔｏｔａｌ ｅｘｐｅｎｓｅｓ ｏｆ ｕｎｓｏｌｄ ｈｏｍｅｓ ａｒｅ ｓｔｉｌｌ ｓｉｇｎｉｆｉｃａｎｔ.
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The selected article and Chapter 2 are closely related by the effects of supply and demand. As stated in the textbook, changes in price causes changes in consumer demand. The decrease in price for houses in the United States resulted in a greater demand for the houses. This article also mentions the declination of house construction, which lessens the supply of houses. As the supply decreases, the price of these houses would decrease even more, and so would the demand. On the other hand, the textbook also states that aside from price, there are also some other factors that may affect supply and demand. In this case, recession in the United States caused family income to decrease, therefore reducing the quantity demanded for the houses.
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In my opinion, it seems as if the USA's housing economy is a bit unstable because of its inelasticity. A small decrease in price for houses can cause a great increase in demand, although this may be true for houses regardless of the location. On the other hand, what's bringing the sale of houses down in the United States is the decrease in supply. This not only hurts USA's economy, but since Canada and the United States are such close partners, there was no doubt it would affect Canada as well. Canada's mills and mill workers suffer from this. Aside from that, is Canada suffering in any other way from this situation? I would like to hope not.
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First of all, I think this article proves that "Higher prices for houses will cause the demand for houses to decline. This will eventually result in lower prices for house." Not only in United States, but also in Canada. Prices for houses in May and June were very high, not a lot of people were buying houses at that time. Therefore, unsold houses increased rapidly. As a result, prices needed to drop in order to attract consumers.
Secondary, from this article, I understand more how United States acts as a leader of the world in economy. Because of prices for houses dropped in United States, it affects Canada’s industry directly as well. I am sure it affects other countries in other areas as well.
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