As the housing market falls, there are ramifications that are happening around the globe. Yet at home, the property market is affecting a number of other sectors in the economy. For example, in San Diego the housing market has done very poorly, so much so that the economy is hurt. In turn, several retail locations are been forced to close their doors because they simply do not have the business to keep them open.
At the same time, new developments and companies that would have been expanded have pulled back those plans to wait and see what the market will hold for their industry.
The fact that consumers are not spending lies behind these closings. They are concerned with the value of their homes and the credit crunch, which has affected many homes here. Some homes here which are valued quite highly and entered foreclosure can not be sold because large enough mortgages are not readily available to most borrowers who want these properties.
Many believe that there is more to the housing market crisis than the subprime market, especially in areas like affordability and the rising cost of property. For example, one columnist claims that the overall jump in median home prices over the last twenty years is the key problem.
Michael Hill of the Washington Posts, as reported in the Houston Chronicle writes, "The truth is that subprime lenders, by responding to demand, were the finger in the dike for the whole housing market. The real problem is affordability and the incongruity between incomes and home pricing. Forty years ago, the median national price of housing was about twice the median household income. In some parts of the country, this ratio was closer to 1 to 1. Twenty years ago, the median home price was about three times income. In the past ten years, it jumped to four times income."