Uk’s Housing Market. What Has Happened Should Be A

[eric pebble]

The next Bubble - House Prices

"Over the past 10 years, the value of my house has increased by the equivalent of five years of my post-tax salary.

But the rise in prices that has benefited me came at the expense of all those who wished to enter the UK’s housing market. What has happened should be a source not of self-congratulation but of shame."

Martin Wolf, Financial Times 3/3 2006

Link of some sort here - http://www.internetional.se/houseprices.htm

Plus: Warren Buffett: Real estate slowdown ahead

The Oracle of Omaha expects the housing market to see "significant downward adjustments,"

"What we see in our residential brokerage business [HomeServices of America, the nation's second-largest realtor] is a slowdown everyplace, most dramatically in the formerly hottest markets.

The day traders of the Internet moved into trading condos, and that kind a speculation can produce a market that can move in a big way. You can get real discontinuities. We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments, especially in the higher end of the housing market."

CNN 7/5 2006

See here - http://money.cnn.com/2006/05/05/news/newsm...050606/?cnn=yes

The next Bubble - House Prices

"Over the past 10 years, the value of my house has increased by the equivalent of five years of my post-tax salary.

But the rise in prices that has benefited me came at the expense of all those who wished to enter the UK’s housing market. What has happened should be a source not of self-congratulation but of shame."

Martin Wolf, Financial Times 3/3 2006

Link of some sort here - http://www.internetional.se/houseprices.htm

Plus: Warren Buffett: Real estate slowdown ahead

The Oracle of Omaha expects the housing market to see "significant downward adjustments,"

"What we see in our residential brokerage business [HomeServices of America, the nation's second-largest realtor] is a slowdown everyplace, most dramatically in the formerly hottest markets.

The day traders of the Internet moved into trading condos, and that kind a speculation can produce a market that can move in a big way. You can get real discontinuities. We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments, especially in the higher end of the housing market."

CNN 7/5 2006

See here - http://money.cnn.com/2006/05/05/news/newsm...050606/?cnn=yes

More:

"The bears believe central banks have simply stimulated another bubble, in the housing market, to replace the technology boom.

[Philip Coggan, Financial Times, January 27 2006]

On terms of where we go from here, the bearish camp tends to split in two.

One half believes inflation is the inevitable result. Indeed, that group believes we are already experiencing inflation; it is simply not being picked up in the official statistics. They are contemptuous of “core” inflation measures that leave out vital items such as energy and food, and argue we should pay a lot more attention to asset and commodity prices, particularly gold.

The other half of the bearish camp agrees that high debt levels are a problem. But they argue that central banks will prove powerless to stop deflationary forces, just as the Bank of Japan failed in the 1990s. The result will be a deflationary depression. This camp believes one should own government bonds and large amounts of cash, in case of a collapse in the banking system.

I think there is merit in the case that easy money has been pushing up the prices of financial assets; why else would gold, index-linked gilts and emerging markets all be going up?"

Sorry - no link available -- but sensible words....

AND - more: ...

"Are Housing Prices, Household Debt, and Growth Sustainable?

Rising home prices and low interest rates have fueled the recent surge in mortgage borrowing and enabled consumers to spend at high rates relative to their income. Low interest rates have counterbalanced the growth in debt and acted to dampen the growth in household debt-service burdens. As past Levy Institute strategic analyses have pointed out, these trends are not sustainable: Household spending relative to income cannot grow indefinitely." Here - http://www.levy.org/default.asp?view=publi...bID=108580b2346

Edited June 12, 2006 by eric pebble

[Realistbear]

I agree that HPI and irrationally exhuberant MEW should be a source of shame given the debt mountain and social fall out that has resulted. No doubt Gordon "Miracle Economy" Brown will bask in the light of his "success" of inflated house prices and notional (borrowed) wealth as he prepares to occupy No. 10 but at least he will take the blame as it begins to unwravel as it appears to be doing as we write!

[eric pebble]

I agree that HPI and irrationally exhuberant MEW should be a source of shame given the debt mountain and social fall out that has resulted. No doubt Gordon "Miracle Economy" Brown will bask in the light of his "success" of inflated house prices and notional (borrowed) wealth as he prepares to occupy No. 10 but at least he will take the blame as it begins to unwravel as it appears to be doing as we write!

Thing is, R-Bear -- Gordon Brown NEVER takes or accepts ANY blame -- he is such a slippery snake in the grass that he gets away with it time and time!!!! e.g. "Inflation" figure - doesn't include the cost of housing!!!???? What kind of a sick joke is that?

[eric pebble]

Thing is, R-Bear -- Gordon Brown NEVER takes or accepts ANY blame -- he is such a slippery snake in the grass that he gets away with it time and time!!!! e.g. "Inflation" figure - doesn't include the cost of housing!!!???? What kind of a sick joke is that?

And FINALLY - it really looks as if it is unravelling.

EA contact I know in West London - [in admin side of big EA Co:] - has told me that many EAs now secretly believe that we area bout to have a property crash!!! That's what she said!!