Investors need to be on guard, because there is currently a large bubble in the United States property market and if it bursts, it could have repercussions for the global economy, Michael Power, a strategist at Investec Asset Management, told the Personal Finance/Fairbairn Capital Investors' Club this week.
A bubble in the United States residential property market is in danger of bursting, and declines in the US's biggest housing markets are likely to trigger a major economic slowdown, Michael Power says.
US house prices have risen by an average of 13.4 percent over the year to the end of the second quarter of 2005, and in some areas prices have risen by more than 25 percent over the past year, Power says.
Las Vegas currently has the hottest property market in the US and prices there are up 33 percent on a year ago.
The value of new and existing home sales has increased by 280 percent in eight years.Power says the dot.com bubble of 2000 morphed into a real estate bubble, because despite the Wall Street crash that year, house prices did not skip a beat and have in fact increased at a faster rate
November 06, 2005
'Biggest bubble in history' may burst
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3 comments:
prediction for the house of cards - markets to fall first and fastest
1) san diego
2) las vegas
3) phoenix
4) miami
5) boston
I believe San Diego has the most extreme median price/household income ratio, so that's my bet.
I choose Las Vegas
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