Does an increase in housing prices have a short run effect on national income and average price level?

Question

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Answer 1

I worked as a carpenter in 1983 for Nevada framing, in Las Vegas, building homes. The race was on to fill the Valley, we were averaging thirteen homes a week. We were making around, seven an hour for nail pounders (no experience) carpenters $12.50 an hour (people that actually knew what side of the nail went into the wood) $15.00 an hour for carpenters that could work alone and knew what they were doing. $18.00 an hour for Carpenters that could work along and read blue prints. And, anywhere from 20 to $25.00 an hour for people like me that worked with their own crews for a price they worked out, kind of on contract. I had four people working for me and we installed windows and doors only.
Homes, I'll choose the type, small starter homes, around Christmas of '83 were going for $114,000.00 nice homes, two beds and a garage, small but nice.
That Christmas the place was shut down for no reason, we started up two weeks later, all the advertising signs were changed. This house was now $ 140,00.00 a big jump, no? or yes? things began to change when the market started racing.
That summer that same house jumped to $189,00.00 and then, within the year, the same year to $200,000.00 and, we were getting behind in the contracts they were selling so fast.
We negotiated with wages but to no avail. No unions there so, we were left in the open. They did this for two more years, the brothers that owned the business I'm told made a fortune and closed the business one day, we were out of work, they were gone. I heard they made a fortune and run. We guess they sold fifteen hundred houses at these inflated prices and run, we didn't make anymore.

I'm told these homes in Vegas, highly inflated, are going for three to five hundred thousand. It's, Vegas, has the highest rate of martgage forclosures in the U.S. the highest transient rate, up to 360 famlies a day, a day is right. It's National level of income is rather high, jabs are easy to find if you really want to work. But, the cost of living now is high.
I hope this helps you somewhat.

Answer 2

It is really hard to say. It really depends on how well the nationalized industry was being run before privatization. If the firms were well run, then there would be no real difference after priviatization. However, if there were huge subsidies and the firms were overstaffed or producing poor quality goods, then the story is different. In the short-run, there might not be much of a difference, but over the medium term the new industry will probably contract -- producing less and firing workers. It will probably buy new machinery and equipment. It will probably end up with fewer workers but they will earn more since they are more productive.

Answer 3

as the guy said above, increases in housing prices affect house producers and they represent a small portion of the population. there are other people part of the chain to produce the goods necessary to produce the house. so i say that national income increase for a short time before going back to normal. lots of houses going into foreclosure so housing prices will go back down.