The Main Reason for Housing Price Crisis in 2000s in California in the United States of America with Recommendations for the Recovery

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

Background of the study1

Research aims and objectives1

Aim1

Objectives2

Research rationale2

Research questions2

Dissertation layout3

CHAPTER 2: LITERATURE REVIEW4

Housing prices crisis in US4

CHAPTER 3: METHODOLOGY7

Research Design7

REFERENCES8

CHAPTER 1: INTRODUCTION

Background of the study

The real estate crisis in the U.S. is also called sub-prime crisis, financial market crisis or global economic crisis. This housing crisis hit the world economy in 2007 and in subsequent years with full force (Shiller, 2008, 160). The U.S. housing market remains mired in poverty which resulted in a further drop in housing prices. The value of housing in 20 major cities fell 0.8% between December and January, according to S & P Case Shiller. Residential properties are 3.8% cheaper than a year ago and placed at the level of late 2002. The financial crisis that began in 2007 reached its peak in 2008 with the bankruptcy of Lehman Brothers and other large financial institutions. Many economists had expressed skepticism in the housing market boom and new financial innovations in the U.S., allegedly tended to reduce risk by increasing wealth. Initially, households were encouraged to increase their borrowing terms and promised comfortable pattern of increased home prices, which led them to engage in complicated forms of mortgages, believing they could refinance later at more favourable terms (Richard, 2008, 220). In addition, it provided financial incentives to lenders of subprime loans soared so these types of loans can be consumed who have not qualified for normal mortgages.

Research aims and objectives

Aim

The aim of the research study is to find out the reason of housing prices crisis in 2000s in California in the United States of America.

Objectives

Following will be the research objectives for the study:

To find out the reason of housing prices crisis in California

To find out the recovery process for housing prices crisis in United States.

Research rationale

The real estate market after credit crunch is facing a dramatic decline in the United States. The housing prices crisis results in the bank insolvency and bankruptcy. The research helps in finding out the reason of housing pricing crises in United States especially in California. The research study also helps in finding out the recovery process of real estate market prices of United States.

Research questions

Following will the research questions for this study:

What are the main reasons of housing prices crisis in United States especially in California?

What must eb the recommendations for the recovery of housing prices crisis of California?

Dissertation layout

In the first chapter the study will introduce the aims and objectives of the study. this chapter includes the research questions, background of the study, rationale of the study, as well as, the dissertation layout.

In the second chapter the literature will be discussed which will be most relevant to the study. all the concepts regarding the research topic i.e. housing prices crisis in US will be discussed in detail.

In the third chapter the research methodology which will be employed ...