Wednesday, Apr 01, 2009
Falling Fast
Daily Telegraph: US property prices down 29pc and still falling fast
US house prices have fallen 29pc from their peak and are still tumbling at the fastest rate on record, according the closely watched Case-Shiller index.The latest figures dash hopes that emergency action by the US Federal Reserve over the winter would at least slow the pace of decline.
Prices dropped 19pc in the 20 largest cities in the year to January, with an accelerating downward lurch during the first weeks of 2009.
Posted by sold out @ 07:37 AM (1101 views) Add Comment
16 Comments
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1. dohousescrashinthewoods said...
The irony is, in the last couple of years, this sort of headline was posted as an April fool joke!
I guess this year it will be "shock rise in house prices".
2. growler said...
Which just goes to show, no matter that it's "widely thought" that the US will come out of recession first, the property crash has plenty of more life left in it. It's a classic bear trap developing. Lets see what the pumping of money does to the economy - this will take some time to work through but ought to be visible in the US first.
3. tyrellcorporation said...
Where are the falls here though folks? Devon is still booming as far as I can tell.
4. mark wadsworth said...
@ TC, friends of ours bought a nice-ish house in North Devon three years ago (against my sternest of advice), they got bored after two years and have been struggling to since early 2008, I told them (late last summer) to dump it for what they can get ASAP and they said they couldn't even sell it for 25% off what they paid. I know they're renting elsewhere now, but they sure haven't managed to sell it yet.
5. crunchy said...
3. tyrellcorporation said...Where are the falls here though folks? Devon is still booming as far as I can tell.
crunchy- The problem with recessions and booms is that alot of top earners, smart investors and pro's who keep on there toes do very well.
Places like Devon do tend to attract the likes. Where in the UK would you buy if you had the cash and needed to buy a home or perhaps a
second? The truely wealthy will not rent, they make too much money. For those in Devon that are getting repo'd or moving on there must
be plenty of cash rich gravitating there to buy. Things have changed. We have pesky computers now, so lots of people now work from
home, therefor location is not a big problem. One has to ask, is it worth living in Devon? Can I afford it?
The cons and pros of rampant speculation. Gated communities in these areas a thing of the future as the rich, poor divide widens.
I wish I could say April fools, or falls.
6. uncle tom said...
I've just trawled a selection of 'middle America' real estate advertisements, and reckon that US house prices are approaching a sane and sustainable level, but are perhaps not quite there yet.
For example, the property here - http://www.fsbomadison.com/details.asp?ID=13489 - lies in a suberb of Wisconsin's state capital, Madison. Given the size and location of the property, the asking price would probably be fair, were it newly built. That it is an older property, albeit reasonably maintained; makes it look a bit expensive - but what offer might the vendor be willing to accept?
7. growler said...
I think TC is perhaps making a wee jest.... the sort of thing EAs always say "here, the crash isn't happening". I know people down West - it's a nightmare.
8. tyrellcorporation said...
UT, I can't vouch for where this house is but a very rough translation of the value indicates property is twice the price in the UK compered to the US. I think all those absurd 1/2 bedroom investemnt flats in the UK which have plummeted in value have skewed the house price stats markedly. I'd like to see stats on price movements of 3/4 bedroomed houses in the UK. My guess would be they've maybe dropped by about 10% tops.
9. tyrellcorporation said...
Growler not jesting at all - unfortunately. I watch the local prices in Exeter like a hawk and they haven't budged, in fact certain areas are going up. I just need to get realistic really and locate to an area unknown or unloved by Londoners.
10. crunchy said...
Love these kind of houses, but the garage did not look as big as the house so would not be for me. lol. Price starting to look ok, agreed!
Are you thinking of moving UT. I can picture you now at the porch, banjo in hand playing Home On The Range. lol.
Maybe not, but it's all good and have a great fools day you all!
11. A Solovine said...
TC @ 9. Exeter is Devon's county town and has a university and the Met Office. Is it really typical of what's going on in Devon?
12. growler said...
Tyrell: O I C. Strange.... I was speaking to someone in East Cornwall and was amazed at the price drops. Like 7 beds, multi acres and lake for 1500 a month. I also have connections on East Anglian cost - a popular hideaway for London. Also far lower prices.
13. 51ck-6-51x said...
Is it haunted? Looks like it.
14. landofconfusion said...
8. tyrellcorporation said...
"I'd like to see stats on price movements of 3/4 bedroomed houses in the UK. My guess would be they've maybe dropped by about 10% tops."
I live in SE England and have to agree with you on that point. Average prices around here have dropped but only by about 7%. Even the unpleasant, mostly council-run areas haven't dropped my much.
15. landofconfusion said...
Just one other thing of interest: We are currently having work done on the house. When asked about work one of the contractors mentioned that it slumped and went quiet around October but since December has been roaring back. Apparently a lot of people (around here at least) are now investing in BTL, with the justification that shares are loosing money and returns on savings are so poor so what else is there?
16. Mr Rigsby said...
landofconfusion
If people have been losing money buying or holding shares in a clearly declining stock market, why are they now investing into BTL with rental income dropping 15% to 25% and house prices set to drop at least another 20%?
I sold the BTL's between Sept '07 and May '08 and stuffed the cash into deposit accounts, yep rates are heading south but not into negative territory yet like property and shares. Meanwhile to make a few more quid, I spreadbet short-term only on FTSE 100 index down or up for minutes at a time, pays my living expenses anyways.
When house prices finish their decline and start to show clear signs of a recovery, that is the time to invest in BTL but in the right area with a good level of demand for the right property. I can only imagine these people buying now for BTL (not including BTL Pro's) will be a whole lot worse off in 2 or 3 years time and possibly for a few more yeras after that too.