Wednesday, Dec 26, 2007
UK 2008 to follow USA 2007 cities in crisis
S&P: Home prices in 20 major U.S. cities were down 6.1% released Wednesday by Standard & Poor's.
"Given conditions relating to mortgage financing, and the number of unsold homes that is piling up, all regions are likely to continue on a negative trend in the months ahead"
Posted by yoyo1 @ 04:20 PM (543 views) Add Comment
7 Comments
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1. crash bandicoot said...
Down 6.7% and still unsold properties piling up. They have got a way to go yet......and we have even further.
2. Gone West said...
I was in LA last week. All over the news they had the story of how in some areas homes have fallen over 40% since the spring peak. While such falls are not too common, it shows that they can and do happen. I would expect some of the UKs "hotter" areas to suffer the same fate in the coming year.
3. planning4acrash said...
These annualised falls are hardly affected by the credit crunch, so far. 2008 will could be a shock, even to HPC bloggers.
4. uncle tom said...
It is very interesting to watch the US property market unravel - but only a fool would expect the UK market to track a similar path, as far too many significant factors are different.
The pace of the downturn looks quite gentle - but their bubble was nothing like as inflated as ours, and the actions of speculators less significant - I expect the outcome in the Uk to be much more vicious..
The US will now begin to suffer the secondary consequences of the downturn, as equity withdrawal (refinancing in the US) - becomes history. Recession beckons.
5. Exiled said...
its interesting the way they are unravelling the way property price reductions are being mentioned very little and why worry about it i mean how does .03% relate to anything when in some regions prices have gone up something like between 200to 300 percent. i unlike some of the young guns that come on this web site regularily, went through the house price crash 1990 1994 and my next door neighbour had negative equity in the region of 400000 pounds up to 600000 pounds and i felt quite sad for them because they really had to rail in any kind of life after paying their mortgage. what really p......s me off is the total lack of concern of this so called socialist government, the most fundamental thing a human being can have a roof over its head denied by a government that stated will not allow housing to spiral out of control. my best guess is that GB will do anything to avoid a HPC obviously reducing interest rates, possibly giving better tax relief to btls, ammending rental laws to fall in line with other europeon countries to name a few.
6. inbreda said...
As I understand it the credit crunch hit because people started defaulting on their mortgages - i.e. until that point investing in CDOs was a one way bet. Once that myth was banished places like NR had difficulty getting finance from the money markets. So people actually started defaulting before the credit crunch, so as P4AC says, 2008 will be a shock as the feedback loop really begins, and those that now can't remortgage start coming off fixed rates and subsequently defaulting on their mortgages, which will make CDOs worth even less which will detach mortgage rates from BoE rates even further as well as causing house prices to fall, which will encourage more BTL speculators to default...etc, etc
2008 will be good. As with all feedback loops, the effects become exponential. A bit of bad news in January, could be significant in Feb, catastrophic in March.
7. hpwatcher said...
I think the UK far, far more vunerable to a downturn than the US. They haven't seen the hysteria & insanity that we have over here....