Saturday, Dec 29, 2007
US house sales crash 9%
Yahoo Finance: Sales of New Homes Worse Than Expected
"I think you can classify what we are seeing in the housing market as a crash," said Mark Zandi, chief economist at Moody's Economy.com. "Sales and home prices are in a free fall. The downturn is intensifying."
Posted by happyrenterz @ 05:26 PM (701 views) Add Comment
13 Comments
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1. hpwatcher said...
But is it going to happen here?...that's the sixty-four-thousand-dollar question.
2. uncle tom said...
Note the median sale price of $239k - or about £120k - for houses that are on average much larger.
US prices are tipping down from a much lower peak than in the UK - they may see a slump - ours will be a crash..
3. Stevie Dee said...
@UT.. as many have said, the uk's situation is rather more precarious, and such a downtown (reading between the lines), shows that it will be very bad here.. I'm now saying to regulars here, stock on essential tins of food. As they can be used as a means of purchase.. FOOD. Have been sourcing essentials for the last 6 months. If you have served in the forces, you will understand. "An army marches on its stomach".
4. Tubtruck said...
Yes uncle Tom their houseprices are lower against the present weak pound but if our houses were as large their would be no land left, I was in nevada and arizona last month, land sells for building for as little as $300 per acre and always has, land even only for growing on and with absoloutly no chance of building on selles for in excess of 10 times this price in the UK, you forget land is in short supply here where as its in abbundance there.
5. Cheekie Charlie said...
"US prices are tipping down from a much lower peak than in the UK - they may see a slump - ours will be a crash."
There's is a crash, ours will be a special crash!!
6. new user 2007 said...
Less than 20% of the England and Wales has been built on. Also, using the logic that prices can fall by that much because they have more land is odd, because a lack of land was one of the "pillars" used also in the US during the liquidity driven bubble there.
Prices are now falling in Manhattan, and Japan has a LOT LESS land to build on than we do and has done for decades (as well as a higher popn density), so please explain why prices there were able to fall from 1990 to 2005 (Tokyo started rising in 2005).
Unemployment here has not changed much yet repossessions are rising rapidly. I thought this could not happen when the economy was robust? Also, unemployment and interest rates are lower in the US than here. In Japan rate payments rose by less and unemployment was less in 1990...what happened was the liquidty bubble burst.
The US is having its first national price fall since the Depressions, something that could not happen in the new era? US debt levels are lower than the UK by any measure debt as: % of GDP, nominal levels per person. House prices are indeed lower if measured by income multiples i.e. the valuation that counts.
7. Exiled said...
in the uk house price falls will be far worse mainly because the sub prime issue is far worse in the uk if you go by what is defined as subprime in the usa ftb, extended terms, self certified, interest only all defined as subprime in the united states. look at the ratios of incomes to borrowing 5 and half in usa 9 times in the uk. the idea that the financial markets are better regulated then the us is laughable by comparison the uk is the wild west. toget back to global standards the ratio between incomes and borrowing has to get back to something like four and a half times, that obviously suggest a fall in the region of 40 to 50 percent.
8. uncle tom said...
The notion that the UK is short of land to develop is nonsense - look at the vast military bases that are scattered all over the country, and mostly little used - look out of a train window and see how much derelict land there is - that could only be improved by the addition of houses. In most communities there is derelict or underused land that could be sensibly developed.
The problem we have is the top-down Stalinist planning system that dates back to the post-war Attlee govt. Most towns and villages have some imbalances in their housing stock, that could be corrected by appropriate and proportionate development - but councillors are terrified of saying 'please can we have a couple of dozen family houses' for fear that their community will be marked down as a soft touch, and scheduled for a thousand homes..
Planning needs to managed on a carrot and stick basis, whereby communities that welcome new development get rewarded, and those that elect to have no new development get penalised. The extent and nature of development must be delegated to those who know the locality best, and to restore confidence, local communities must be given the power to veto any proposal. The size of the carrots and sticks can then be adjusted to ensure enough supply to meet demand.
9. planning4acrash said...
The planning system was totally reformed in 2004 to be market responsive with planning policies needing to be based on evidence for first time. RTPI has also proved that enough planning permission is being given but builders are holding back land banks.
10. uncle tom said...
P4C,
Planning is still based on a top-down diktat system - that is what needs to be reformed.
When property catches a cold, land gets pneumonia - I'm not sure how much land is actually being sat on that could be developed, but it's not a very smart investment right now..!
11. planning4acrash said...
You have 3 choices in planning, top down from local government, top down from developers or somewhere between. In the Uk, we have a good democratic compromise. U wld agree if,like me,u saw daily the aweful schemes developers often try2get passed planners
12. it_is_going_with_a_bang said...
Heres a better idea. Before you let a few million or so people migrate into the country make sure you have sufficient housing stock so as not to create a shortage.
Nothing wrong with managed migration. But last 5 years has been a complete joke.
Ask yourself how many of those migrants are in rented accomodation and then you can see why there are so many more BTL people. Only a very small percentage of immigrants are able to buy.
When I sold my flat this summer the I was the only British person left in 12 flats. Thats one building. All that in 5 years.
Don't blame the planners. Blame the arses that made the situation what it is. From the top down.
Quite frankly GB telling everyone he's going to build la de da number of homes by 2020 is ridiculous.
You build the homes when they are needed not 12 years later.
13. planning4acrash said...
Yer, totally agree. Tho, all these arguments, lets remember, are fodder for the vested interests. At the root of the house price boom is a simple issue, mispricing of risk caused by new financial instruments such as CDOs totally unregulated, plus manipulated inflation figures (low interest rates), resulting in excess liquidity being pumped into the main place where risk has been mispriced (houses), also amplified by carry trades and sovereign funds. The result is that lots of money has been chasing a finite number of houses. Its not that too many people have been chasing houses, just that too much money has. Inflation is always about an excess of liquidity. Supply and demand is a monetarist issue, not a social issue. All the other issues (other than quantity of cash and its destination) pale in significance and bankers decide and governments then decide whether or not to take control of a situation, period.