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What The Housing Market Will Do With Unemployment

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http://finance.yahoo.com/real-estate/artic...=realestate-buy

4 Signs Your Home Is About to Lose Value

by Anna Maria Andriotis

Wednesday, August 12, 2009

provided bySmartMoney.com

..../

3. Increasing Unemployment

In most cases, the cities where homes have lost the most value during the past year also possess the highest unemployment rates.

Homes in Merced, Calif., have lost 40.2% of their value year-over-year, the biggest loss of home values in the nation, according to Zillow.com. The city's unemployment rate is the fifth-worst among 372 metropolitan areas at 17.6%, according to June data from the Labor Department. El Centro, Calif., where home values plunged 37.6% year-over-year (the second-biggest drop in the country), has the worst unemployment rate at 27.5%.

Individuals living in areas battered by high unemployment are likely to see their home values drop further, especially if they live in areas dependent on dwindling industries – like Central Valley, Calif., and the mortgage lending business or Detroit and the auto industry, Zandi says.

The housing market here will follow suit. There is nothing more devastating to house prices than unemployment.*

IMO, our unemployment rate will exceed 10% very quickly as the job loss situation is gaining momentum. One company shuts down and pipeline businesses follow suit within a few weeks. At present, high unemployment is lagging and we have yet to feel the brunt of this sad (even tragic) fall out from the Brown decade of imprudence.

Sad, very sad. :(

The upside is that it is good news for those who want to buy an affordable house ( :) )

____________________

* A sad situation for many. :(

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The housing market here will follow suit. There is nothing more devastating to house prices than unemployment.*

Except possibly unanticipated transportation problems. After peak oil this will set off a new dynamic in the

demand situation of different areas, depending on their centrality or access to public transportation.

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Guest Parry aka GOD
http://finance.yahoo.com/real-estate/artic...=realestate-buy

4 Signs Your Home Is About to Lose Value

by Anna Maria Andriotis

Wednesday, August 12, 2009

provided bySmartMoney.com

..../

3. Increasing Unemployment

In most cases, the cities where homes have lost the most value during the past year also possess the highest unemployment rates.

Homes in Merced, Calif., have lost 40.2% of their value year-over-year, the biggest loss of home values in the nation, according to Zillow.com. The city's unemployment rate is the fifth-worst among 372 metropolitan areas at 17.6%, according to June data from the Labor Department. El Centro, Calif., where home values plunged 37.6% year-over-year (the second-biggest drop in the country), has the worst unemployment rate at 27.5%.

Individuals living in areas battered by high unemployment are likely to see their home values drop further, especially if they live in areas dependent on dwindling industries – like Central Valley, Calif., and the mortgage lending business or Detroit and the auto industry, Zandi says.

The housing market here will follow suit. There is nothing more devastating to house prices than unemployment.*

IMO, our unemployment rate will exceed 10% very quickly as the job loss situation is gaining momentum. One company shuts down and pipeline businesses follow suit within a few weeks. At present, high unemployment is lagging and we have yet to feel the brunt of this sad (even tragic) fall out from the Brown decade of imprudence.

Sad, very sad. :(

The upside is that it is good news for those who want to buy an affordable house ( :) )

____________________

* A sad situation for many. :(

It probably has already exceeded 10%.

Do they count all those builders who were CIS? The self-employed? Those who don't/can't claim?

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http://finance.yahoo.com/real-estate/artic...=realestate-buy

4 Signs Your Home Is About to Lose Value

by Anna Maria Andriotis

Wednesday, August 12, 2009

provided bySmartMoney.com

..../

3. Increasing Unemployment

In most cases, the cities where homes have lost the most value during the past year also possess the highest unemployment rates.

Homes in Merced, Calif., have lost 40.2% of their value year-over-year, the biggest loss of home values in the nation, according to Zillow.com. The city's unemployment rate is the fifth-worst among 372 metropolitan areas at 17.6%, according to June data from the Labor Department. El Centro, Calif., where home values plunged 37.6% year-over-year (the second-biggest drop in the country), has the worst unemployment rate at 27.5%.

Individuals living in areas battered by high unemployment are likely to see their home values drop further, especially if they live in areas dependent on dwindling industries – like Central Valley, Calif., and the mortgage lending business or Detroit and the auto industry, Zandi says.

The housing market here will follow suit. There is nothing more devastating to house prices than unemployment.*

IMO, our unemployment rate will exceed 10% very quickly as the job loss situation is gaining momentum. One company shuts down and pipeline businesses follow suit within a few weeks. At present, high unemployment is lagging and we have yet to feel the brunt of this sad (even tragic) fall out from the Brown decade of imprudence.

Sad, very sad. :(

The upside is that it is good news for those who want to buy an affordable house ( :) )

____________________

* A sad situation for many. :(

Not quite true.

I fail to see the link between rising unemployment and cheap housing supply.

If 40% (or thereabout) of all UK properties are mortgaged according to CML, that leave 60% mortgage free.

We are told unemployment is rising to 2.5m may be 3m by year end. What % of those will fall into above 2 categories? What % of that are people renting? or living with friends and family?

Now, out of this 40%, a % of them lose their jobs. A few case scenarios:

Some will have mortgage insurance for up a 1 year

After that, there is the government sponsored mortgage interest support for 2 years

Some are already on tracker mortgage and benefiting from extra low IR.

Some will revert to IR only - And tap into savings to tie them over

Some will take payment holidays (albeit for a few months)

Some will cut down on discretionary spending - and shop differently (instead of M&S they will go to Aldi)

Some may probably find another job

So just because folks are losing their jobs, does not mean a cheap supply of housing will necessarily come onto the market - See above.

Banks are more lenient at repossession - They need to preserve their margin and mitigate their losses.

There is no direct correlation between rising un-employment and increase in repos and therefore cheap housing supply - Most repos are actually from subprime mortgages ie people who could not afford to buy to begin with.

Sorry, but wishing misery on others just so you can buy a house on the cheap ain't gonna work.

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There is no direct correlation between rising un-employment and increase in repos and therefore cheap housing supply - Most repos are actually from subprime mortgages ie people who could not afford to buy to begin with.

That's great. Now debunk the correlation between higher unemployment and less demand for property. :rolleyes:

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I thought this was going to be about the report out today that all sorts of health issues will soar during this recession?

http://www.dailymail.co.uk/news/article-12...-recession.html

Britain should brace for a surge in domestic violence, alcoholism, drug addiction, and mental-health problems as the 'second wave' of the recession begins to hit, an official report has revealed.

The Audit Commission - the Whitehall body charged with checking on council spending - warned councils are not doing enough to combat combat 'a wide range of social problems' caused by rising unemployment, business failures and bankruptcies.

Read more: http://www.dailymail.co.uk/news/article-12...l#ixzz0NzDmlrTS

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Britain should brace for a surge in domestic violence, alcoholism, drug addiction, and mental-health problems as the 'second wave' of the recession begins to hit, an official report has revealed.

Mental-health problems...... Like paying 2007 prices.

When I get home from the Job Centre, after beating up my partner, having some white lightning cider and shooting up. I like nothing better than looking through rightmove to see the next quarter of a million pound house I will buy!. :lol:

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