View from England: How do you know when it's a housing mania? When people with jobs can't afford a home anymore.

Mortgage costs for many at over 3/4 of their take-home pay.

Home prices 24 times average incomes.

Soaring foreclosures and insolvencies nationwide.

Yup. Ponzi Scheme. Executed perfectly here in England. A country that thought soaring home prices were a good thing for society, that everyone could get rich, that property prices can only go up and up and up and up, and that inflation has nothing to do with housing costs - thems are savin's after all ma!

They do call it the "Property Ladder" over here, and you know nobody every goes down the ladder - only up! Right? Right?

We'll see...

MORTGAGE COSTS ARE CRIPPLING

Daily Express (UK)

Home owners are having to fork out crippling mortgage payments which eat up as much as three-quarters of their take-home pay. Millions struggling with record utility bills and rising interest rates are paying an average of 51 per cent of their net income.

But, with some parts of the country seeing house prices rocket to 24 times the average salary for the area, many are being forced to pay up to 71 per cent of their wages to put a roof over their heads.

The figures were revealed in a report which makes clear the shocking financial burden being shouldered by hard-working families because of soaring property prices.

The grim report reveals that the property boom pushed average house prices to more than six-and-a-half times salaries last year – up a formidable seven per cent from the previous year’s figure. It led experts to warn that while rising prices are felt by many to be positive, any significant increase in interest rates could have a damaging impact on households.

Rob McPherson, of management consultants Hay Group which produced the study, titled Home Truths: Pay and Property 2006, said: “Rising house prices are outstripping take-home pay, placing enormous pressure on home owners.“Increased house values may make consumers feel more wealthy, but the truth is that the buying power of wages has taken a serious hit when it comes to property.

Citizens Advice policy officer Peter Tutton said: “We are already seeing a rapidly growing number of people falling behind with mortgage payments and in some cases threatened with repossession.

“We know that some people are taking on mortgages that stretch them to the limit. Increases in interest rates could spell disaster.”

HousingPANIC Stupid Question of the Day

What else do Americans need to see in terms of proof for them to come to the awareness and understanding that housing from 2001 to 2005 was caught up in a massive, historic and unsustainable mania, one that is now swiftly, firmly, predictably and unequivocally crashing?



Mania,

then
Panic,

then
Crash.

We'll be talking about this mania and crash for the rest of our lives.

The late great housing bubble was such a perfect and textbook financial mania. Every single criteria was met, straight out of the mania (and eventual panic) gameplan.

But just wait now, loyal HP'ers, for the fallout from the biggest mania in recorded human history. A mania which caught in its trap over 70% of the American population. A mania on steroids, with unimaginable levels of leverage, the likes of which we've never seen before. And a mania with an almost surreal level of fraud and deception.

Oh, we'll be talking about this mania and crash for the rest of our lives. And so will our children, and our children's children. And 500 years from now, The Great Housing Bubble will be taught in classes.

I couldn't be more proud. We did it. We created the biggest financial mania in recorded human history.

Congrats Americans! Congrats people of the world! You did it!

Now deal with it.

And isn't it time for Newsweek or Time to put the housing crash on their cover already? The AP story of the year after all. What are they waiting for?

An economic bubble (sometimes referred to as a "market bubble", a "financial bubble", or a "speculative mania") refers to a market condition in which the prices of commodities or asset classes increase to absurd or unsustainable levels (that no longer reflect utility of usage and purchasing power).

It occurs when speculation in the underlying asset causes the price to increase, thus encouraging even more speculation. The bubble is usually followed by a sudden drop in prices, known as a crash or a bubble burst.