Jump to content
House Price Crash Forum
Sign in to follow this  
lombardo

Why does the American media sound the alarm over house prices quicker than the UK media?

Recommended Posts

Their income to house price ratios are much more sane than ours but they seem to raise the alarm a lot quicker. They call their prices over heated and excessive at much lower figures, while our media only does so when things are at breaking point. And even then some other parts of our media continuously celebrate rising prices and lament the slowdown. Is this caution from the US media because of the troubles that they faced in 2008? Will the culture in this country change after a big crash? We saw a huge crash in the mid 90s, so why does the media have such a poor memory?

E.g:

https://www.cnbc.com/2018/07/24/southern-california-home-sales-crash-a-warning-sign-to-the-nation.html

https://www.cnbc.com/2018/07/26/the-anything-goes-list-price-strategy-is-no-longer-working-in-housin.html

https://www.reuters.com/article/us-usa-economy-housing-idUSKCN0WN1I6

https://seekingalpha.com/article/4186703-trouble-ahead-u-s-housing-market

 

Share this post


Link to post
Share on other sites

I suspect it’s because the US has about 5 times the population of the UK, but 40 times the available land with different states in competition for business and people. Basically there is more choice, if one area gets expensive moving is easier and prices can fall faster. 

The UK is more illiquid, and so price distortions can build up for longer, as people get more complacent. Prices keep rising until they are totally mental and the fall hard, and very hard if you are on a 100% mortgage.

Basically we get more accustomed to periods of moronic inflation. Whereas in the US the inflation dissipates faster and people get used to that and predict accordingly. Also in terms of the economy, the UK only has a few hubs in a given sector, the US has many.

 

Edited by Mikhail Liebenstein

Share this post


Link to post
Share on other sites

A major difference between the US and the U.K. is that the US is a capitalist state, whereas Britain is still, at heart, a feudal state.

They believe in the entrepreneur so they invest in businesses and the stock market.

In Britain we believe in the landed gentry, we vote for the landed gentry, hoard land, and hope to get rich by farming tenants.

Our class system is based on owning houses, theirs is based on having money.

Share this post


Link to post
Share on other sites
41 minutes ago, BorrowToLeech said:

A major difference between the US and the U.K. is that the US is a capitalist state, whereas Britain is still, at heart, a feudal state. 

They believe in the entrepreneur so they invest in businesses and the stock market.

Our class system is based on owning houses, theirs is based on having money.

I think Borrow to  Leech has nailed it and Lombardo's original point is very much worth noting.

I have noticed the same media focus in my frequent visits to the USA and I think the difference is due to ingrained societal attitudes. Not only does one gain much more Kudos in the USA ( than in the UK) through getting wealthy from hard and inventive work in commerce- be that anything from Hi-Tech to cattle ranching to being a gigolo, but there is also much more societal tolerance for subsequent failure in business. Its easier to bounce back there from failure.

What that means is that there is much less media screaming about the need to " lend a helping hand" to someone who has stupidly borrowed too much.

You max out in the USA for your housing loan, you lose your job and you can't pay it back, then suck it up......

Share this post


Link to post
Share on other sites

I might also add that the political/societal pressure in the UK to shield people from the consequences of their investment mistakes is also very prevalent in Australia.

Over there, senior politicians like ex-PM Tony Abbot, the present Treasurer Scott Morrison and so on run a very effective scare campaign against Labour's proposed policies to make housing more affordable, shouting from the roof-tops that this will make the overall price of houses in places like Sydney and Melbourne drop significantly.

Nowhere in the societal/political sphere does there seem to be an acceptance of the fundamental fact that, well yes, the prices of just about everything in life fluctuates, and sometimes to a huge degree. When it comes to housing, the only fluctuation allowed is in the inflation direction, all Australian government resources are to be directed to eliminating the potential downside.

That's simply not an attitude that one commonly sees in the USA.

It is, in many ways, a fairer society, especially for prudent and aspirational people.

Over there you win, you win. And if you lose, you lose.

Share this post


Link to post
Share on other sites
2 hours ago, BorrowToLeech said:

A major difference between the US and the U.K. is that the US is a capitalist state, whereas Britain is still, at heart, a feudal state.

They believe in the entrepreneur so they invest in businesses and the stock market.

In Britain we believe in the landed gentry, we vote for the landed gentry, hoard land, and hope to get rich by farming tenants.

Our class system is based on owning houses, theirs is based on having money.

Good post.  100% agree.

Share this post


Link to post
Share on other sites
3 hours ago, BorrowToLeech said:

In Britain we believe in the landed gentry, we vote for the landed gentry, hoard land, and hope to get rich by farming tenants.

 

1 hour ago, Social Justice League said:

Good post.  100% agree.

+1 Leasehold in England and Wales is last redoubt of a colonial relic

https://www.telegraph.co.uk/finance/property/3347212/Leasehold-has-us-tied-in-chains.html

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.