The US and UK housing markets - the two great bubbles of our time - are in a race to the bottom. Which country will produce the biggest decline in house prices.The US got off to a quick start. Their crash began in the summer of 2006. According to the Case-Shiller composite 20 index, prices have fallen about 22 percent. An impressive start, which will be followed up by further dramatic declines in the years to come.
The UK, on the other hand, managed to keep their bubble going until October 2007. However, the credit crunch sprang up, and despite the best efforts of Brown, Darling and King, the bubble was over. Prices are down 16 percent from their peak.
So, who is going to win the title of the greatest housing bubble in history. My money is on the UK. Our bubble was bigger, longer and nastier than anything produced by our American cousins. This is one race we are going to win.
9 comments:
There are some trophy's you really don't want. I suspect this is one...
But the US will long be the champions of garbage production!
USA! USA!
It appears that the UK bubble was many times larger than the one in the USA, in terms of prices-to-incomes, so we've got that trophy already.
We're near the bottom of our housing market. Come June, 2009 or so, we'll be at it. I don't think we've got much farther to go in terms of percentage drops.
A good blog to watch for this is Professor Piggington's. He focuses on my home town, San Diego, but his analyses are applicable across the US, I think.
Perhaps SD is near the bottom now, having lost about 50%. Still, I wouldn't be in a hurry to throw my cash into a condo
Nowhere near the bottom unless Gordon Brown decides to guarantee that "Britains hard working families" will not lose out due to house price drops... and bail them out as well !
Oh yes, that's after he bails out Woolworths, MFI... he must be up all night with his John Bull printing press making notes to hand out.. the way the £ is going, the forgeries will soon be worth more than the real thing !
I live on a street that is rated as high crime. Yet the houses have gone from £400,000 to over £1million. It is still the same street, the same dog turds and rubbish blowing around, same hoody scum, same lack of exciting business activity. So you do have to ask why over a million for this?
The UK will get the prize for the bigger crash, just as it rather stupidly outshone the US for the biggest rise - by a big margin!!!
B. in C.
Nick, our values haven't dropped 50%. It's more like 30% or so. As for a condo, those things are usually millstones, so no thank you there.
The worst of the real estate crash is over for us, I think.
Post a Comment