Sunday, Aug 02, 2009
Danny boy talking sense for a change?
Telegraph: House prices are still falling
By David Blanchflower.Last week the Nationwide reported that house prices rose by 1.3pc in July. Great, the slump in house prices is over. Actually, probably not. From June 1989 to July 1995, for example, when average house prices fell from £70,095 to £60,965 there were 23 months where prices increased and 48 when they fell. How much further will house prices fall? The best guide is the ratio between average earnings and average house prices. The peak was 5.84; we are now at 4.33 but the long term average is 3.6. This suggests a drop of 38%, not including any overshoot.
Posted by little professor @ 02:32 AM (846 views) Add Comment
4 Comments
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1. gone-to-colombia said...
Mr.Blanchflower, don't we just love him. I suppose it might be considered fitting that one of the authors of the great housing bubble should
seek to become its chronicler.
2. paul said...
Check out the second comment:
David - welcome to the real world! Just a shame you didn't recognise the bubble when you were helping to create it.
Funny how you thought low interest rates were the solution then and low interest rates are the solution now.
The trouble is, it's too late - people bought in to the bubble,encouraged by your low rates, and when the true cost of money emerges, as it surely will, they will suffer badly.
Ouch - don't the truth hurt!
3. clockslinger said...
This from the man who caused the problem? I suspect this article is a "fluffer" (as they say) to get us all in the mood for more taxpayer initiatives to bail out the overmortgaged. Thing is, Danny and his mates were running things for the Tescopoly-Goldman Sachs club in the big city, not you and me, but they got to greedy and weren't able to keep it going. Now they want your state pension, NHS spending and remaining welfare provision to help them out and they want you to legitamise the theft by going out and VOTING FOR IT at the next election to "balance the books"! Everything these people tell us has an agenda behind it...particularly anything from the undoubtedly learned Blanchflower....The one thing they absolutely don't want is for you to notice!
4. Thebos said...
How come the numbersquoted for house prices are way off that shown on the average house prices graph shown on this website?