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Physicists Predict Christmas Crisis For Uk Housing

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Okay, thought this might interest you lot..

Economic reason, practical reasons..

Now its getting scientific.

you will need an account to read it so I have included the article

http://www.nature.com/physics/highlights/6958-2.html

intersting website for scientific stuff..

Physicists predict Christmas crisis for UK housing market

Philip Ball

Property trouble ahead in Britain but not United States, suggest growth and wobbles.

UK house prices are showing accelerating oscillations.

© alamy.com

"Mayhem may be in store" for the British property market, say scientists in California1. They claim to see the "unmistakable signature of a strong unsustainable bubble" in UK house prices, which could burst around the end of this year.

There is no comparable danger in the US real-estate market, say Wei-Xing Zhou and Didier Sornette of the University of California, Los Angeles, despite fears among investors of a "bubble mentality".

US house prices have outstripped income by about 2% per year over the past few years, and mortgage rates there are lower than they have been for decades. At face value, the market seems to be heading for instability, prompting suggestions that the Federal Reserve should intervene to bring it under control. But in mid-2002, the Reserve's chairman Alan Greenspan dismissed the possibility of an impending real-estate crash.

Sornette believes that most market crashes arise from the internal dynamics of trade, rather than being a response to some external shock to the system. A crash, he suggests, is preceded by a period of very fast growth in economic indices, plus a series of wobbles or oscillations stretching over several years, which come increasingly close together.

Sornette has previously argued that market indices leading up to several past financial crises, such as the Black Monday crash of October 1987, involved just this kind of accelerating oscillation. Now he and Zhou have now found that house price indices in Britain are showing the same behaviour.

Six different measures of house prices — including all houses sold and those bought by first-time buyers — show oscillations that are on course to culminate by the end of the year. In the United States there is no sign of such growth or fluctuations.

Admittedly, the vast and rather segmented US property market is not strictly comparable to its London-dominated British counterpart. But focusing on a more limited American market — such as that in California alone — elicits the same conclusion.

The bursting of a property bubble can involve a precipitous drop in house prices or something less dramatic such as a big slowdown in sales.

Sornette and Zhou's prediction does not in itself contain any prescription for averting a potential crash, but governments or national financial institutions have various options when warned about such a prospect, such as changing interest rates.

References

Zhou, W.-X. & Sornette, D. 2000-2003 real estate bubble in the UK but not in the USA. Physica A, 329, 249 - 263, doi:10.1016/S0378-4371(03)00600-9 (2002). | Article

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that is from 1-2 years ago, i believe.

the us has bubble-itis by now

Was it.. two years ago..

shows what scientists know..

If they spent more time building hover bikes and flying cars I would be happier..

but there you go..

actually.. its 2005 .. where is the moon base..?

personal jet packs..?

(The housing market was stretched from meltdown a few years ago by the prolification of self cert mortgages... The affordability issue was removed and we had to wait for common sense instead.. we had to wait for people to stop.. look at it and say.. "how much?" and "Do I really want to owe that much.." and also..." ahha.. interest rates.. they can go up.. and that hurts when I owe this much..".. Now the FSA are looking into small lenders who offer these mortgages.. intersting as in my area a major high street back has announced that it has not mortaged a first time buyer for tw years.. they follow the law.. Someone is lending people an awful amount of money.. and how are they doing that..?)

Edited by apom

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(The housing market was stretched from meltdown a few years ago by the prolification of self cert mortgages... The affordability issue was removed and we had to wait for common sense instead.. we had to wait for people to stop.. look at it and say.. "how much?" and "Do I really want to owe that much.." and also..." ahha.. interest rates.. they can go up.. and that hurts when I owe this much..".. Now the FSA are looking into small lenders who offer these mortgages.. intersting as in my area a major high street back has announced that it has not mortaged a first time buyer for tw years.. they follow the law.. Someone is lending people an awful amount of money.. and how are they doing that..?)

couldn't agree more.

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I'm inclined to agree with a great deal of this report.

The US is growing again and creating jobs...so consumer spending will probably stagnate rather than fall as MEW falls,but more unemployed find jobs.

the UK situation is altogether different.We had our hiring splurge AT THE SAME TIME as the us slowdown,when we should have just gone with the flow and had a normal recession.

problem is,we hit our "as good as it gets" stage about 2 years ago,so the only way to go from here is down!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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