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Realistbear

Why H P I Is Bad For Everyone Except Eas

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Some highlights from one of the best articles ever from America's number 2 most respected paper, the NY Times (arguably, the WSJ is No. 1). Bubble talk is now mainstream unlike the UK which is still in denial.

http://www.nytimes.com/2006/03/01/business...gin&oref=slogin

YOU remember the great real estate crash of the 1990's, don't you?

David Leonhardt

In New York, inflation-adjusted prices dropped almost a third in less than a decade. The fall was even worse in Los Angeles, and it wasn't pretty in Boston, San Francisco or Washington, either. Thousands of families were forced into much smaller homes. Many have never lived as well as they did in those giddy pre-crash years. It was a painful preview of what the dot-com meltdown of 2000 would bring.

But instead of panicking, most homeowners should be taking a deep breath. The real estate slump of 2006 offers a fresh chance to puncture the No. 1 myth about the nation's No. 1 topic of conversation: the idea that we should all be rooting for high house prices. The myth is good for real estate agents, but it creates needless anxiety for everyone else. It's time that most of us learned to stop worrying and love the bursting bubble.

THE best way to think about the value of your house — at least in the short term — might be to compare it to Monopoly money. Having a big pile of it feels good, but you can't really spend it.

As long as you are living in the house, you have no way to lock in your gains. Yes, you can borrow against those gains, but new debt is not exactly found money. And when you move, odds are that you will go someplace that has a real estate market very much like yours. Whatever profit you make you will just plow back into a new home.

This is why the housing boom of the last decade, unlike the dot-com frenzy, has not made many people rich.

Some more crash signs coming from Massachusetts:

http://www.boston.com/business/articles/20...?p1=MEWell_Pos1

Mass. home sales plummet 21%

The number of single-family homes sold statewide fell 21 percent in January, the largest year-to-year decrease in monthly home sales since April 1995, and another sign that the once red-hot local real estate market is cooling, the Massachusetts Association of Realtors reported yesterday.
Edited by Realistbear

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Similar to an article on the BBC website last year.

High house prices are good news for EA's and people moving down the ladder; for all others they are a disaster.

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Some highlights from one of the best articles ever from America's number 2 most respected paper, the NY Times (arguably, the WSJ is No. 1). Bubble talk is now mainstream unlike the UK which is still in denial.

http://www.nytimes.com/2006/03/01/business...gin&oref=slogin

YOU remember the great real estate crash of the 1990's, don't you?

It's true, the intelligent media in the US (NYT, WSJ, NPR etc) has been very bearish. But, unlike in the UK, a much smaller proportion reads or listens to intelligent media. Newspapers for example have much less influence in the US, and NPR has to compete with dozens of rightwing talk shows stuffed with ads for negative-amortization adjustable-rate interest-only no-money-down home financing (bad credit okay!).

frugalista

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Similar to an article on the BBC website last year.

High house prices are good news for EA's and people moving down the ladder; for all others they are a disaster.

That'll be the baby-boomers then. Quids in for the selfish-generation. When will they get their comeuppance?

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It's true, the intelligent media in the US (NYT, WSJ, NPR etc) has been very bearish. But, unlike in the UK, a much smaller proportion reads or listens to intelligent media. Newspapers for example have much less influence in the US, and NPR has to compete with dozens of rightwing talk shows stuffed with ads for negative-amortization adjustable-rate interest-only no-money-down home financing (bad credit okay!).

frugalista

UK people read "intelligent" media?

Circulation of the Independent approx 250,000

Circulation of the Sun approx 8,500,000

;)

Edited by FreeFall

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UK people read "intelligent" media?

Circulation of the Independent approx 250,000

Circulation of the Sun approx 8,500,000

;)

Okay, good point. But even the Sun has some stuff on economics, even if it is a bit basic. Circulation of *any* newspaper in the US is very low, and there just are *no* newspapers aimed at non-college graduates. At least a fair bunch of people watch BBC1 news, viewing / listening figures for decent news programs in the US are tiny.

Remember, the UK is probably the most newspaper-oriented country on Earth.

frugalista

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Okay, good point. But even the Sun has some stuff on economics, even if it is a bit basic. Circulation of *any* newspaper in the US is very low, and there just are *no* newspapers aimed at non-college graduates. At least a fair bunch of people watch BBC1 news, viewing / listening figures for decent news programs in the US are tiny.

Remember, the UK is probably the most newspaper-oriented country on Earth.

frugalista

Completely true, my dad lives stateside and gets the most highbrow of the city papers. It's a rag. I'd probably go mad when I stay there if not for the intarweb.

Am I the only one who thinks papers have gotten more fluffy over the last few years though? More features, less proper reporting and analysis. So often I'll read a newspaper article and think to myself that I've read more or less the same thing before somewhere. Or that it really belongs in Cosmopolitan or something. I'm not sure people have the same amount of time and mental energy to give to reading newspapers these days and I think dumbing down is a symptom of that :(

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It's true, the intelligent media in the US (NYT, WSJ, NPR etc) has been very bearish. But, unlike in the UK, a much smaller proportion reads or listens to intelligent media. Newspapers for example have much less influence in the US, and NPR has to compete with dozens of rightwing talk shows stuffed with ads for negative-amortization adjustable-rate interest-only no-money-down home financing (bad credit okay!).

frugalista

Not sure this is correct theses days. I have just got back from Georgia and even the awful rightwing shows like FOX and Rush Limbaugh are talking about a crash. In general I think the US population are more money savvy and have access to more impartial information. Of course politics is another matter.

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When I get in the car in the morning I tune into News Direct (which is part of LBC) because they have the best travel news in London - every ten minutes.

They also do a money news section twice an hour and occasionally get comment from someone in the city.

Usually these guys are rather uninspiring but now and then they get this guy on from Titanium Capital. Listening to him speak is like HPC in condensed form.

His mantra is always the same: if you've got a good stable job - hang on to it. There's unemployment coming. House prices are going to crash and, get this, you should all be buying gold.

In fact, thinking about it, which one of you lot works for Titanium capital? ;)

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UK people read "intelligent" media?

Circulation of the Independent approx 250,000

Circulation of the Sun approx 8,500,000

;)

Good point but wrong figures. The Indy is indeed barely read, even less so now with its annoying hectoring covers, around 180,000 a day in the UK. But fortunately the Sun problem is less than half as bad as you suggest at only 2,880,000 daily full paid copies.

http://www.abc.org.uk/cgi-bin/gen5?runprog=nav/abc&noc=y

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Good point but wrong figures. The Indy is indeed barely read, even less so now with its annoying hectoring covers, around 180,000 a day in the UK. But fortunately the Sun problem is less than half as bad as you suggest at only 2,880,000 daily full paid copies.

http://www.abc.org.uk/cgi-bin/gen5?runprog=nav/abc&noc=y

Apologies - I was referring to the number of readers, not the number of copies sold.

http://en.wikipedia.org/wiki/The_Sun_%28newspaper%29

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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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