In This Activity You Will Need to Go to the Realtor.Com Website. Follow the Instructions for "finding a Home", and Check Housing Prices for a 3-Bedroom, 2-Bath House in Several Cities, for Example, San Francisco, Ca; Topeka, Ks; Dallas, Tx; Conc

Like any other product, real estate is driven by supply and demand. This is one of the basic principles that helps sustain many real estate markets across the country. While metropolitan areas such as Northern California and the Washington region were growing their job bases through the 1990s, local jurisdictions were afraid of losing open space to houses -- so they passed laws to limit development.

"High housing prices in Seattle are attributed to many factors. Homeowners are willing to lock down a low mortgage rate for a longer period, reducing the amount of available homes on the market. In addition, the state of Washington limits the amount of homes that can be built each year. This creates high demand for housing in the Seattle area. According to an analysis by the Seattle Times, increased housing demand is due to low mortgage rates, increased job growth, high work wages, and out-of-state residents who can afford to buy homes. The Seattle Times reports that King County "had 30 percent fewer homes on the market than it did a year ago." However, with limited housing and a high demand, bidding wars ensue, resulting in increased home prices. With a high demand and increase in home prices, many potential homeowners will find themselves outbid for the home of their choice. The result of this demand is that those who cannot afford to purchase homes that have doubled in price in the last few years, will purchase less expensive homes and thus buy out potential homeowners with smaller budgets, increasing overall home prices" (Is the Seattle Housing Market a Bubble?) This statement clearly shows why Seattle has an average $287,817 selling price. As shown in Table 1.

Topeka, KS of the five has the lowest selling price. (See Table 1) Nevertheless, the Greater Topeka Chamber reports, "Topeka's housing market is considered the 5th hottest housing market in the United States with a 20.2% increase, bringing the median price to $100,700. (CNNMoney, www.money.cnn.com August 27, 2003), Topeka's housing market is considered the 7th most affordable market in the United States. The study, described in the Wall Street Journal January 12, 2005, was done by forcasting and consulting firm Economy.com. Topeka's percentage of house an average family can afford is indexed at 286, with 100 meaning that the median income family has the exact amount needed to purchase the median-price existing home, with 20% down and a 30-year fixed-rate mortgage. (Wall Street Journal, January 12, 2005), and Topeka's housing market is considered one of the top growth markets in the United States, growing between 15-20% over the past year. (Time, August 5, 2002)" (Economic Development).

Concord, MA some of the most beautiful houses in New England but it comes with a price tag, an average price of $597,667 for a 1,653 square foot home. "The town's historic character and easy, 20-mile commute to Boston puts its housing stock in high demand. Its tough zoning laws are an example of the kind of restrictive rules that experts say have choked the housing supply and pushed up prices. For example, half the town is zoned for a minimum lot size of two acres, and there's a prohibition on dense, apartment-style developments. ... Over the past 25 years, Massachusetts has seen