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Realistbear

Sure Signs Of Crash Over Pond

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http://www.signonsandiego.com/news/busines...29mortgage.html

What is interesting is this statement and how it also applies to the UK market:

"If somebody gets into a financial jam, it's not so easy now" to sell, he said. "But most people who have owned their home more than a year have enough equity that they can play with the price and get it sold."

The San Diego, California market has followed the UK very closely in relation to HPI. Year over Year HPI is down from double digits to a measely 3.75% (this figure probably represents the most optimistic spin the VIs dare publish). The VIs are saying you are okay if you didn't buy at the top of the market because the declines so far have not wiped out your equity. Pity the people who bought in the last 12 months--they have already lost money. Problem is that the drop in values has only just begun which means the defaults will increase exponentially as more and more people get caught in the negative equity trap.

The UK has seen increases in repo actions at more than 60%--one of the best leading indicators for a sharp house price correction. A simple reflection of the growing numbers of people who cannot afford their mortgage payments and who have relied on HPI to get them out of trouble. With HPI in full reverse rockerting repossessions are inevitbale. At least EAs can make money at the auctions.

The "ARM" rate (adjustable rate mortgage) in the US has risen from around 3.85% at the height of the buying frenzy to 6.33% today. When people stretch to the last dollar to buy a house in a bubble it does not take rocket science to work out the devastation that is going to follow when the mortgage rate almost doubles.

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We looked at this in the recent repossessions threads, and the conclusion was that the 60% rise in court actions was *not* underpinned by a corresponding rise in mortgage arrears – so the explanation had to be elsewhere, and one candidate was increasing recovery action by ‘second loan’ lenders. In other words, it is likely to be a *general* consumer debt issue starting to affect housing via MEW and the recent blurring of the distinctions between secured and unsecured borrowing, rather than a specific house price thing.

Edited by spline

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http://www.signonsandiego.com/news/busines...29mortgage.html

What is interesting is this statement and how it also applies to the UK market:

"If somebody gets into a financial jam, it's not so easy now" to sell, he said. "But most people who have owned their home more than a year have enough equity that they can play with the price and get it sold."

The San Diego, California market has followed the UK very closely in relation to HPI. Year over Year HPI is down from double digits to a measely 3.75% (this figure probably represents the most optimistic spin the VIs dare publish). The VIs are saying you are okay if you didn't buy at the top of the market because the declines so far have not wiped out your equity. Pity the people who bought in the last 12 months--they have already lost money. Problem is that the drop in values has only just begun which means the defaults will increase exponentially as more and more people get caught in the negative equity trap.

The UK has seen increases in repo actions at more than 60%--one of the best leading indicators for a sharp house price correction. A simple reflection of the growing numbers of people who cannot afford their mortgage payments and who have relied on HPI to get them out of trouble. With HPI in full reverse rockerting repossessions are inevitbale. At least EAs can make money at the auctions.

The "ARM" rate (adjustable rate mortgage) in the US has risen from around 3.85% at the height of the buying frenzy to 6.33% today. When people stretch to the last dollar to buy a house in a bubble it does not take rocket science to work out the devastation that is going to follow when the mortgage rate almost doubles.

You have to remember in the US it has been very easy to sell your house. We STR last Oct, our house sold with 3 offers, for 3K over asking. This has made it very easy if you got into troulbe, so forelosures have been very low.

I see a 180 soon tho.

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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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