Tuesday, June 22, 2010

Cause and effect

Headline on First Coast News: "Home Prices Dip But Sales Up."
This reminds me of the headlines many papers were writing a while back: "Prisons are full even though crime is down."
In liberal newsrooms, they are astounded to find that when you lock up criminals, the crime rate goes down. They can't see the connection.
The folks at Channel 12 also don't know much about economics if they think it is an anomaly that homes sell well when the prices are lower, as the headline indicates.
Homes are selling here because sellers are lowering their prices to match the market.
When the housing bubble burst many people thought they could still get the inflated price when they sold. Doesn't work that way.

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