Goodness, why isn't what's about to happen in the UK (a massive housing price crash) obvious to everyone? Are we really THIS stupid?
Yes, I'm afraid, we are. And we will be again...
House prices are at their most overvalued for 15 years, new figures showed yesterday, as hard-pressed home-owners struggle to pay their mortgages.
And with the gloomy prospect of a record tax burden and unprecedented rises in household bills comes a warning that interest rates could rise by far more than expected.
Morgan Stanley and PriceWaterhouseCoopers warn there is a high chance of a severe fall in house prices in the coming years
A study commissioned by The Daily Telegraph shows that house prices are moving well beyond the reach of many families as the rapid growth in property values outpaces increases in incomes.
The Daily Telegraph/Lombard Street Research Housing Affordability Index shows that they are more overvalued than at any time since 1991 — when prices were plunging after the last major slide.
January 08, 2007
UK Housing Report: Overvalued house prices threaten crash
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31 comments:
NASDAQ UP 1.3% YTD
GOLD DOWN 4.7% YTD
me: happy
Keith: sad
life: good
yo, anon 7;28:18 pm:
slv up 42% from last year this time.
and you still buy the QQQ's?
Bwahahahahahaha
sucker!!!
This thread is about UK housing ready to crash. Not about gold etc
gld down a little, who cares, i'm not selling today, I'm buying more. yippeeeee!
look at all those LBO's.
too many punk ass 20-somethings on wallstreet, never saw a real asset. Ben Stein in todays yahoo column say Buy Buy Buy even if its going down-(paper assets, stocks that is).
Bwahahahaha
you stock pickers will be picking you nose for food someday.
buy the metals. own a real tangible asset.
cycles. history repeats and the metals will be you fortune not HD stock.
ok, its about UK housing, but i dont live in the Uk what can i say?
when UK housing does tank, gold and silver will be the safe haven to repurchase UK housing or US housing for pennies.
gld down a little, who cares, i'm not selling today, I'm buying more. yippeeeee!
So lemme get this straight if I may. Gold down 5% in a week, no big deal, keep buying. Housing down 5% in a year, end of the world is coming.
When you buy housing with massive leverage and it drops 10%, you go bankrupt
When you buy gold with money in your bank account and it drops 10%, life goes on
Welcome to the world of leverage. Massive leverage
anon January 08, 2007 7:39:38 PM,
housing down 5%, most pinheads today put NOTHING down, thus the 5% drop off a fully leveraged anchor which they will never pay off is BAD.
do the math, if they had nothing saved to put down and they lost 5% of the total...
BUY GOLD AND SILVER BACK UP THE TRUCK
http://tinyurl.com/y5bwap
Global Markets Face `Severe Correction,' Faber Says (Update4)
By Ian C. Sayson and Pimm Fox
Jan. 8 (Bloomberg) -- Marc Faber, who predicted the U.S. stock market crash in 1987, said global assets are poised for a ``severe correction'' and it's time to sell.
``In the next few months, we could get a severe correction in all asset markets,'' Faber said in an interview with Bloomberg Television in New York. ``In a selling panic you should buy, but in the buying mania that we have now the wisest course of action is to liquidate.''
The bullish outlook of traders in everything from bonds, equities and commodities to real estate and art suggests valuations are peaking, Faber said.
Faber, founder and managing director of Hong Kong-based Marc Faber Ltd., advised investors to buy gold in 2001, which has since more than doubled. His company manages about $300 million in assets.
``I am not a great buyer of assets now,'' Faber said. ``We may be in a situation where consumer-price inflation comes back and will have a negative impact on the valuation of assets.'' Gold, Oil
Faber said gold should rally further on expectations that supply of the precious metal will decline and demand for it will increase to hedge against inflation. Gold climbed 23 percent last year, its sixth year of gains.
``The price of gold will continue to go up and probably very substantially,'' Faber said. ``In the long run, it's very clear that central banks are basically increasing the supply of money and the supply of gold is obviously very limited.''
The good thing is that a housing crash in the UK will not have the same disastrous impact as a similar sell-out would have in the US. The UK's economy is not as debt-financed, and there are less people with houses at sub-prime loans that will cause bad-loans.
Hey Keith,
I just figured out what that horrible smell is in NY - I walked into a realtor's office and saw nothing but stinking corpses - they all died due to lack of business (and ethics).
from itulip:
Separately, the US Association Trucking Association (ATA) said its index of truck tonnage shipped across America was plummeting at the fastest rate since the dotcom bust.
The shipment index fell 3.6pc in November, following a 1.9pc fall in October. It is now down 8.8pc over the last year. "November 2006 marked the single worst month for truck tonnage since the last recession," said Bob Costello, the group's chief economist.
"The economic slowdown is in full gear. If we continue to see year-over-year reductions of similar magnitudes in the next couple of months, it could indicate a greater economic slowdown than economists are projecting at this point," Mr Costello said.
Their is absolutely no chance that the UK housing market will be allowed to crash.
The one thing going for Gordon Brown (chancellor or finance minister) is that during his time as Chancellor the economy has expanded for a record number of years.
If the economy goes into recession, what chance do you think he has of being Tony Blair's replacement?
Their is no such thing as free markets, only controlled markets, the banks are so afraid of an inquiry into their practices, that they will do anything (6X salary anyone?) to keep in with the ruling elite.
If we attack Iran, you can bet that middle england will receive another house price inflation bribe, to avoid yet another risk of antiwar fever.
Hey Keith,
I just figured out what that horrible smell is in NY - I walked into a realtor's office and saw nothing but stinking corpses - they all died due to lack of business (and ethics).
****
Really? With prices in Manhattan up 5.1% from Q4 '05 ot Q4 '06 and sales volume up 55% from Q4 '05 to Q4 '06?
The UK, being the hedge fund center of Europe, is due for a big one. The whole of metro London needs the entire world's financiers to keep valuations up and enough liquidity in the markets to keep the game going the way it has.
This, I believe, will be the real end of the British empire whereas the 60s and early 70s were just the post-WWII gyrations that had to iron itself out with a country with no colonial suppliers and producers. When this train ends, the UK will be the another Portugal of Europe, a country with few industries and just enough of a tourist sector to sustain itself. Intl banks and the LSE will continue but they'll be in their own realm separate from the rest of the UK's prosperity which will be non-existent.
Just got back from Ireland on a 2 week Vacation (Holiday in Euro lang.) i'm not an economist but i can tell you i would not invest in the EU at this time.
since the introduction of the common currency the "Euro" real inflation seems to have gone up like crazy.
i'm a beginner RE investor and have been very successful. (have not bought a property since 2001 since i believe that's were prices will naturally go back to. "the bottom" everyone is talking about is 2001 /2002 prices). the spread between income and cost of housing is way way worse then SO Cal or anyplace else in the USA. i checked out properties all across the Western Ireland area
mostly within 2-3 hours range of Galway Co.
Here is what i found. 1) everything from food to clothing is very expensive.. not only with the week US dollar but also with the Euro.
2) average incomes ( looked thru the classified for typical IT corporate jobs) is about 30% less then for the same job here in the US
average Property about 50% more expensive per sq ft. then here in the US.
so basically the average person would be considered poor by our standards in every way, there is no way a person can save a dime at the end of the month out there.
common sense says the EU is going thru very optimistic phase that will bust really bad. its actually amazing that the UK housing market hasn't busted yet.
- NASDAQ down 55% since March 2000
- S&P is still down
- DOW is barely above after over 6 years
That is why you don't buy overpriced assets and equities.
Who cares about normal Brits? No one in government gives a f*ck about the middle class anymore.
As long as the Arab princes and Russian Oligarchs can still afford London digs, nothing will change.
::Arab princes and Russian Oligarchs can still afford London digs
Those have already been accounted for. In order for London to continue, it requires the remaining American elites (Gates, Mark Cubans, Shaqs, etc) along with the new Chinese and east Asian billionaires to join them in creating a rich ring around the LSE so that the average Briton can simply live off the craps of the gilded Londonites and their derivative fund managers. That's a perfectly bifuricated megasized Monaco where London city is the casino, and everyone in the UK is a valet or server.
"GOLD DOWN 4.7% YTD"
Yeah right!!
Gold was about $500 an oz this time last year, Gold today is $610 an oz.
An increase in excess of 20%YTD.
Absolutely cannot wait for this whole mess to crash in the UK, US, everywhere.
Time to get back to basics and begin the rebuilding on solid ground.
the UK warned it's banks sveral weeks ago to prepare it's books for a 40% drop in RE valuations. Subprime Mortgage brokerages are dropping like flies in the US this past month- we're down 7 now in just over a month?
The handwriting is on the wall. Buy RE now and prepare to lose money, BIG money since it's so overvalued.
Speaking of inflated home prices and how they got that way:
Great article in todays' (Monday Jan 8) Seattle Times and L.A. Times about some dummy homedebtors in Seattle whose broker "helped" them to get a bigger loan by inventing a job for the wife, complete with business cards.
Long story short, these bozos lost their home and are now crying "victim"!!???!
I'm sorry I don't have links but you should check this sory out Keith. You'd get a real kick out of it as the insane points are too numerous to mention.
It's on page one of the Seattle Times, under the title "Gates Foundation Invests in Firms Accused of Abuses", written by Charles Piller for the L.A. Times.
Guess they couldn't find a Seattle reporter who had the guts to speak about our corrupt, sleazy market up here.
I agree the London prices will stay high because of foreign investors. The same can't be said of Floriduh, Phoenix, Vegas, Montana, Bakersfield etc etc. I believe certain areas such as NYC are attractive to wealthy foreigners. Miami is way overbuilt.
Just a question. I should have probably asked this before I invested. How much of the SLV and GLD prices are actual demand by consumers of the metals as opposed to speculator hype?
guess ill never live in nottingham, the home of robin hood and my grandmother, should i be sad? what with the declining food productions, decling sheefield iron works, and enormous tax that i hear about?
have not seen smoked kippers in our supermarkets in a long time, and have been looking, whats up with brit heritages?
London isn't all prime real estate. There are plenty of suburban areas where there are no Russian or Arab millionaires and people are taking out massive mortgages on small wages and small time speculation is rife. It will fall like everywhere else.
If anyone is interested, I have a UK specific property blog.
http://thedebtisreal.blogspot.com/
Yep, and that's why the UK will not go the way of a supersized Monaco.
Unlike Manhattan, London is just a banking core than the center of the world's media darlings and uberrich fools.
So let's say for NYC, a person can afford to live in Pelham, Bronx [rent approx $1.1K/month for a studio plus 1/2 room sized kitchen or even a small one bedroom ] by being David Letterman's chauffeur, earning $50/hr plus tips, and can put some away for retirement if he sticks to Falafel restaurants and Pizzerias as regular dining experiences then those fancy $50 per plate joints in the West Village. This theoretical person cannot 'make it' in London with freezer burned burgers costing ~$12 over there whereas NYC cheap eats can go at $3 for Gyros along with half-priced gasoline for the limo. And where are all the London based studios for this person to get those hot limo jobs ushering Charlie Rose around town?
So I suspect that provided that the NY has rich entertainers and Wall Street, life will go on in the big apple even if RE goes into a long term bear market because of this 'critical wealth' mass creating a Monaco effect on the rest of the city.
London, on the other hand, is simply a meeting place for brokers and their clients (Arabs/Soviets) along with a few Madonnas who come by to check out the scenery. The wealth effect there is purely on the RE bubble, hedge funds, and little else. I suspect it'll come down pretty hard.
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London isn't all prime real estate. There are plenty of suburban areas where there are no Russian or Arab millionaires and people are taking out massive mortgages on small wages and small time speculation is rife.
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