Question: What Is A Housing Bubble?

Many of the students in your class may have first-hand experience with the housing bubble.  Now a story from PBS NewsHour (8 minute video) is suggesting that bubbles may be inflating again in certain Florida markets.

Here are some questions to ask your students to look for in this piece:

  • What is a “bubble”?  What types of investments may be susceptible to “bubbles?”
  • What evidence does the reporter use to prove that a bubble currently exists?
  • Why did rents rise after the housing crash in 2008-09?
  • Why is real estate such an attractive investment for investors? Think leverage and being able to borrow 80%+ of the value of a home!

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Check out the NGPF Lesson on What’s the Cost of Living?