Tuesday, September 30, 2008

An still it goes on.

Record decline in home prices

July home prices plunge 16.3% in 12 months, according to the Standard & Poor's/Case-Shiller 20-city housing index.

Posted by holding out @ 02:50 PM (1167 views)
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8 thoughts on “An still it goes on.

  • Ere, at 13% we’re catching up with those yanks.

    Who’s going to win the race for -20% ? The tension mounts …

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  • Just like out best showing at the olympics for 60 years, we’re going to be winning stuff here too.

    Fastest pace of decline; larger total decline; larger volume of bankruptcies; higher unemployment level (real, not the stats from the Gov); larger proportion of national debt; faster gdp shrinkage…

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  • We will do better than the american on these scores, but I think the Irish and Spanish will beat us, and Iceland will lead by a fairly large margin.

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  • The UK property market is falling off a higher cliff, and by my reckoning, the fall in the US will not overshoot to anything like the same degree as is likely here.

    The fall in the early summer was less severe in the US than in the spring, but I don’t think you can read a trend into that. I’m expecting a sharp downturn to occur now, taking prices in the US within reach of a sustainable level.

    However, I then expect a continued slide well into next year, taking prices down to perhaps 40% below peak. Either in the autumn of ’09 or the spring of ’10, some confidence will return, prompting a brief rebound, followed by stagnation.

    After adjusting for inflation, I estimate that US prices will settle at about 35% below peak, but inflation will bring that figure down to 25% below, in actual numbers.

    It is my view that the eventual US losses from foreclosure will be much lower than some estimates suggest.

    In the UK however, it will be a different situation, with a greater fall, greater over-correction, and much greater defaults.

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  • 16.3% is the annual rate not the total fall so far. Don’t forget that US prices have been falling for longer than a year albeit at a lower monthly rate of late than those in the UK. The main problem for the US is as long as prices keep falling it will further undermine the asset base of US banks.

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  • To continue where Holding Out left off… and until the US housing reaches it’s bottom, the the pool of toxic MBS will continue to grow. This will guarantee that the Poulson Plan will be shown to be inadequate and underfunded (at $700billion!) and therefore fail. The known unknowns, to coin a phrase, will do for it.

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  • poor devils!!!

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  • These drops in property prices were to be expected after the strong increases in the past years. The prices are still a lot higher than in the 2000 levels. It’s about time property prices are coming down to levels people can really afford.

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