Comments on: Latest housing market trends show no signs of recovery

By: Marty

Marty — Fri, 23 Jan 2009 01:27:12 +0000

Ex Pat is dead on…The United States is in a deep recession and many layoffs are still to come…We have a bunch of gangsters running Wall Street. In China they take these kind of folks and put them in front of a firing squad. Maybe that solution would restore confidence to Americans who have witnessed the whole sale theft of their 401k’s and Life savings by being seduced away from defined pension plans into the open market place where Al Capone would seem a piker! The United States cannot print it’s way out of this mess that deregulation from Clinton to Bush has created. Meanwhile Obama has Robert Rubin advising him when
along with Larry Summers his kind repealed the “Glass-Stegal” act and let the crooks in the front door and the derivative markets went haywire! So hear ye hear ye Village Idiots! If you want to double your money..take it out of your back pocket fold it in two and put it in your front pocket.And stop listening to these same folks who want to separate you from your money. We are in the second inning of a losing ballgame!Hold onto your money houses will get a lot cheaper!

By: Peter

Peter — Thu, 22 Jan 2009 20:49:53 +0000

Here here. We’re in a mess with the economy, because of outragious bullish sentiments, by banks as well who should know better.
Housing will revert to the long term averages, as per above reply. How it gets there and the mess and over shoots that will happen, is unsure.

By: Expat

Expat — Thu, 22 Jan 2009 08:36:02 +0000

Your facile statements and property bullishness are galling in the face of the present economy. You might know your stuff (I won’t presume to call you ignorant) but you are making ridiculous, unjustified claims based on a political or personal agenda.

A 25% percent decline in a few house prices does not a market make, nor does it make a bargain. You are simply tossing out a random percentage (which looks attractive to buyers…”Gosh, a twenty-five percent discount. What a deal!”) without putting into the market framework. To begin with, how about discussing the relative level of house prices versus incomes, indebtedness, inventories, or historic increases. A 25% decrease in prices from a peak that represent a four fold increase over ten years is hardly a bargain.

Anyone buying a UK property in 2009 will bitterly regret his purchase, though not as much as someone who bought from 2003 to 2008. Houses in England are simply not affordable and have been rising on the tide of the most massive credit bubble in history. With the City dying and its bonuses disappearing, London and its suburbs will collapse. The rest of the country, which never had the salaries to justify any part of the bubble to begin with, will also collapse.

But let’s put this “collapse” into perspective. Let’s look at where prices should be instead of where we wish they were (assuming you own your home already and want to sell). I don’t have the information for England but the 150 year median house price to income ratio for America is 2.8 meaning that someone earning $50k can afford to buy a USD140k home.

What is the median household income in England? I would guess that, given the higher tax rates, the affordability ratio is not higher than in the US. Then tell me if buying a house in 2009 is a bargain.

This sort of sloppy, jingoistic propaganda is what has led to England’s downfall and economic ruin. You should be ashamed of yourself and issue an apology to your readers.