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http://biz.yahoo.com/ap/051223/economy.html?.v=11

AP

New Home Sales Plummet in November

Friday December 23, 10:37 am ET

By Martin Crutsinger, AP Economics Writer

New Home Sales Plunge in Nov. by Biggest Amount in Nearly 12 Years;

sales fell in all other areas, led by a 22.1 percent drop in the West, the biggest decline in this region since February 1995. Sales were down 18.3 percent in the Midwest and fell 5.5 percent in the South.

Another USA report just in:

http://uk.us.biz.yahoo.com/rb/051223/economy_homes.html?.v=1

The number of new homes on the market at the end of November climbed to a record 503,000. At the current sales pace, that represented 4.9 months' supply -- the highest level since December 1996, when the number of homes available for sale amounted to a 5 months' supply at the prevailing sales pace at that time.

The median home sales price fell 4.1 percent in November to $225,200 from $234,800 the prior month, the Commerce Department said.

IMagine that 4.1% down in just one month! Annualized at around 50%. The kind of figures we can expect in the UK when our VIs are no longer believed that prices are still going up up and away!

Edited by Realistbear

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Guest Bart of Darkness

Here it comes... USA leading it seems from teh article

Interesting in that they were about a year behind us at one point.

Could this drawn out delay in the UK end up making it (the correction) far worse?

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http://biz.yahoo.com/ap/051223/economy.html?.v=11

AP

New Home Sales Plummet in November

Friday December 23, 10:37 am ET

By Martin Crutsinger, AP Economics Writer

New Home Sales Plunge in Nov. by Biggest Amount in Nearly 12 Years;

sales fell in all other areas, led by a 22.1 percent drop in the West, the biggest decline in this region since February 1995. Sales were down 18.3 percent in the Midwest and fell 5.5 percent in the South.

Another USA report just in:

http://uk.us.biz.yahoo.com/rb/051223/economy_homes.html?.v=1

The number of new homes on the market at the end of November climbed to a record 503,000. At the current sales pace, that represented 4.9 months' supply -- the highest level since December 1996, when the number of homes available for sale amounted to a 5 months' supply at the prevailing sales pace at that time.

The median home sales price fell 4.1 percent in November to $225,200 from $234,800 the prior month, the Commerce Department said.

IMagine that 4.1% down in just one month! Annualized at around 50%. The kind of figures we can expect in the UK when our VIs are no longer believed that prices are still going up up and away!

Any idea if a median house price index is also available for the UK? I believe that the median is a better indicator than the average....

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Interesting in that they were about a year behind us at one point.

Could this drawn out delay in the UK end up making it (the correction) far worse?

I was in the US (Southern California) in 1989 and just sold our house before the Great Crash began that wiped around 30-40% off house prices within 2 years. We moved back to England and found that the Great Crash had begun, in Surrey at least, about a year earlier as we bought a house for 189k that had previously sold for about 100k more than that in about 1986. Thus, England led the US at that point.

We just left Southern California again in July 2005 and sold our house in California in September 2003 which was one year before the top of the market (not quite perfect timing). Prices there definitely started showing signs of levelling and then falling slightly by September 2004 which seems to be 6 months AHEAD of when the same thing happened in the UK. I was counting on a crash in 2004 but it seems that it was slow in coming and only began in 2005. 2006 looks like the year as all those headlines are clear that oversupply is going to kill the market.

So it may be the case that we are trailing the US (Coastal regions) by about 6 months in which case the kind of headlines they are reading over there will be filling our newspapers by early summer 2006. Most of the US will not see much of a downturn IMHO as only the coastland properties saw HPI of the same magnitude as the UK. Also, the US economy is expecting GDP in excess of 3% next year whereas the UK may be lucky to see any positive growth at all. Thats why they are raising interest rates despite falling house prices as only the "froth" markets will be affected. Greenspan warned about this 2 years ago and his predictions are right on the money again.

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Any idea if a median house price index is also available for the UK? I believe that the median is a better indicator than the average....

MODE is better than MEDIAN - i.e. the 'most common'. Median is better than mean (average) but still only means the 'middle price' in this case. Mode ignores the millionnaire's mansions and oddities.

Edited by 29929BlackTuesday

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So, old properties get demolished, and new properties are built.

And the new properties cost more than the old ones that were knocked down. So the average or mean price goes up.

I can see the reasoning here. But surely this isn't a new feature of the housing market. Hasn't this always been the case?

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Good old US of A riding to the rescue of HPCers just like the calvary. OK, they were pretty late for two World Wars but it looks like they are going to be the first to hit the HPC beaches! Is that Oz, Eire and the UK that I see in the second wave?

I think any HPC in the US will have a huge affect on the UK. People can dismiss a HPC in other countries but I think one in the US, and to a slightly lesser extent in Oz, will have a big impact on how people look at UK house prices.

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Guest Winners and Losers

I have, in my feeble little posts, been trying to tell people to look at what has been happening in Oz. I have just lived through the 'crash' there - well, suffered really. There was 18months of spin. Eventually, everyone gave up and said 'f*ck it', its crashed. There was no where to hide. Estate Agents absolutley lost, especially the ones who had never had to sell in harder times. They had no idea what to do. Do a search on google.com.au and have a look at the crystal ball.

Good old US of A riding to the rescue of HPCers just like the calvary. OK, they were pretty late for two World Wars but it looks like they are going to be the first to hit the HPC beaches! Is that Oz, Eire and the UK that I see in the second wave?

I think any HPC in the US will have a huge affect on the UK. People can dismiss a HPC in other countries but I think one in the US, and to a slightly lesser extent in Oz, will have a big impact on how people look at UK house prices.

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Guest Winners and Losers

See link. By the way, just about to rent a lovely cottage in Leeds - he's renting it because he can't get the price he wants for it!

I have, in my feeble little posts, been trying to tell people to look at what has been happening in Oz. I have just lived through the 'crash' there - well, suffered really. There was 18months of spin. Eventually, everyone gave up and said 'f*ck it', its crashed. There was no where to hide. Estate Agents absolutley lost, especially the ones who had never had to sell in harder times. They had no idea what to do. Do a search on google.com.au and have a look at the crystal ball.

Bulls & Suckers

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MODE is better than MEDIAN - i.e. the 'most common'. Median is better than mean (average) but still only means the 'middle price' in this case. Mode ignores the millionnaire's mansions and oddities.

Well the mode is likely to be totally unstable but we agree that the average is a poor measure since house prices are not normally distributed but skewed.

To add to the debate, I post a table (see pic). This is nothing complicated, it just shows the monthly mortgage repayment for a 200K property with different interest rates.

As you can see an increase of 2% in interest rates adds 21% to the monthly mortgage payment. We can all agree that next year interest rates will probably not move much, but who can reasonably exclude a 2% move over the next 4 years? Can a BTL investor increase the rent he is charging by 20% or more?

This is very basic stuff, but I was surprised to see how many "investors" have not spent any time doing such a simplistic analysis.

pic.bmp

pic.bmp

Edited by jacob

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So it may be the case that we are trailing the US (Coastal regions) by about 6 months in which case the kind of headlines they are reading over there will be filling our newspapers by early summer 2006. Most of the US will not see much of a downturn IMHO as only the coastland properties saw HPI of the same magnitude as the UK.

Not just the costal regioins of the US. I am in Nevada. and prices have gone way up here. There has been tons of building going on here. It seems that everyone has decided Nevada is "the" place to live. Truth a lot of people from Calf seem to think 400K is a bargin for a house (and I mean just a house) and people with incomes of 60K are going to buy these houses next year for 500K. I believe we have a lot of empty houses owned by banks soon.

I have read reports of housing prices going way up in St George Utah too. (BTW St George is down wind from the Nevada test sight)

The US is not one big bubble, but lots of little bubbles. IMHO if your "average" family can't afford your "average" house...You have a bubble.

Edited by Karen

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Not just the costal regioins of the US. I am in Nevada. and prices have gone way up here. There has been tons of building going on here. It seems that everyone has decided Nevada is "the" place to live.

Karen, I've been to Nevada several times for obvious reasons. I took a boat cruise on Lake Mead and was astounded to see stark evidence of the depleted water supplies. What are people there going to do for water?

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Karen, I've been to Nevada several times for obvious reasons.

Sitting Bull - knew you had travelled from South Dakota through Montana to Canada but never seen a report of your visiting Nevada - how interesting. Is it for the slots at Terrible's or crap tables at Mandalay Bay ?

One BIG difference - the US media will be more honest reporting any downturn in property market, in UK we have BBC News 24 constantly ramping up house prices as in Fahrenheit 451.

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Karen, I've been to Nevada several times for obvious reasons. I took a boat cruise on Lake Mead and was astounded to see stark evidence of the depleted water supplies. What are people there going to do for water?

When were you there? I know there was a drout in 2002-2003. I don't believe lake Mead is water for LV, but for the Inland Empire of S. Calif.

That said, I am about 450 Miles (725K) from Lake Mead. However water is a huge issue for the whole state. As it stands now during the summer we have "watering days" For example, if your address is even you can only water your lawn on Tuesdays, and Saturdays, and NEVER between 10am-7pm (it's too hot). If your address is odd then you get Wed & Sundays. They used to do this only is drout years, but now it's an all the time thing.

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The mighty Colorado River no longer reaches the ocean. This is a direct result of Americans building homes and golf courses in the desert and using the water from the Colorado to water their green lawns and greens. Even the diverted water, taken to such places in purpose built concrete canals, is mostly lost via millions of tonnes of evaporation EACH HOUR as it is transported across the desert regions.

It is ecological madness!

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I recently left San Diego, CA to return to the UK. HPI in San Diego has been the worst in the US in relation to incomes (about 9% of the population can afford the median priced home). There is a lot of talk that the water shortage will devastate house prices within the next 5 years. Water is more valuable than oil when there is not enough of it to go around.

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I recently left San Diego, CA to return to the UK. HPI in San Diego has been the worst in the US in relation to incomes (about 9% of the population can afford the median priced home). There is a lot of talk that the water shortage will devastate house prices within the next 5 years. Water is more valuable than oil when there is not enough of it to go around.

IMHO they will have to think about desalination. SD is very close to a whole ocean of water. As well as bubble capital USA.

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IMHO they will have to think about desalination. SD is very close to a whole ocean of water. As well as bubble capital USA.

Just invade Canada. Should only take a couple of hours and you will have lots of oil, gas, water and plenty of English speaking slaves cheap servants as well. :D Just remember where you got the idea from! ;)

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Just invade Canada. Should only take a couple of hours and you will have lots of oil, gas, water and plenty of English speaking slaves cheap servants as well. :D Just remember where you got the idea from! ;)

*smacks Handsome Devil on the back of his head*

Smart ass.

:P:P

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Karen, I was in Nevada in spring 2004. The tour operator knew the full story on the water politics, and yes, apparently California uses most of that water, but it leaves little for everyone else in the southwest. Lake Mead is an articial lake created by backing up the water of the Colorado via the Hoover Dam. And from what I've read it also supplies Las Vegas, Phoenix and outlying areas. And I didn't realize it but Masked Tulip is correct, the Colorado no longer empties in the ocean...it just "vanishes into the parched earth before reaching it" as one reference puts it.

In this context, the massive homebuilding in the US southwest seems a bit absurd, much less that fact that investors have been tripping over themselves to get a piece of what is an increasingly dry pie.

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Gone West, being from Canada myself I should remind you that Canada is still part of the Commonwealth and as a result would expect the full wrath of the Queen's Empire to come to the aid of Canada were the U.S. to invade us. However, I assure you that won't be necessary. With a WalMart store in most Canadian cities (257 stores in all), we're already pretty much done in.

And people would be surprised that with all the water in Canada, most large municipalities also have watering restrictions in the summer months simply because of the limited infrastructure to supply fresh water. Plus, there's no such thing as "excess water". Taking it from one part of the system, regardless of how much there is, means less for those down the line who have come to depend on a certain volume.

People are talking peak oil, but water supply had already peaked the day our simian ancestor first fell out of the tree.

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SittingBull, Water is a funny thing. There is plunty of water, 2/3 of the wrold is covered in it. What we are running out of is cheap water. Desalination will be nessary soon.

I am sure this is none of my business, but are you Sioux? You would never guess from my pasty white skin and blue eyes, but my Great Grandmother was Lakota.

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The disturbing thing about the Colorado River is that it not only used to be one of the most powerful flowing rivers in the World but that it had been flowing for millions of years. It is only in the past 50 years, since the enormous building of houses in what is basically desert, that the Colorado has begun to dry up... and continues to dry up.

It is having a devastating affect on the once countless wildlife that depends on it and also a wider climatic affect also. Areas around the Colorado that used to look 'green' from satellite are now showing up as yellowly orange. It is staggering how a complete lack of concern exists, and most likely knowledge of what is happening, in the US about this.

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The disturbing thing about the Colorado River is that it not only used to be one of the most powerful flowing rivers in the World but that it had been flowing for millions of years. It is only in the past 50 years, since the enormous building of houses in what is basically desert, that the Colorado has begun to dry up... and continues to dry up.

It is having a devastating affect on the once countless wildlife that depends on it and also a wider climatic affect also. Areas around the Colorado that used to look 'green' from satellite are now showing up as yellowly orange. It is staggering how a complete lack of concern exists, and most likely knowledge of what is happening, in the US about this.

The massive overbuilding in Southern CA will cause the greatest crisis the US has faced to date: water shortage for one eighth of the US population.

Things will happen a lot faster than imagined. E.g. the Colorado River is probably no more than few thousand years old as the Grand Canyon Gorge formed rather rapidly as massive quantities of water moved through relatively soft sandstone and limestone. E.g. canyons 100's of feet deep were cut in minutes when Mt. St. Helens caused catastophic changes in the flow of water.

Thus it is conceivable that a panic sell could reduce house prices by catastrophic amounts within a decade as the area depopulates to more sustainable levels. Nature has a nice way of ridding itself of parasites (too many people) it seems. The winds are blowing them off the state of Florida as the mugs buy houses at grotesquely inflated prices on the "windswept" shores of Hurricane Alley.

Edited by Realistbear

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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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