Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


US Association Of Realtors July 2008 Report


US National Association Of Realtors – July 2008 Report

COMMENT

HUGH PAVLETICH

AUGUST 26, 2008


The key point here is that while sale levels have generally risen due to the substantially lower prices in the bubble markets – inventory levels are increasing at a faster rate (now in excess of 11 months supply overall – equilibrium 6 months supply) – due to the large foreclosure volumes.

Unfortunately researchers and media in other countries fail to inform the public of “months of supply” as the Americans do.

The economists and general comments in the Wall Street Journal article below are worth reading closely.

The reality is that if the “bubble markets” (e.g. California, Florida, Nevada etc) were taken out of the equation – the United States would not have a problem of any significance. The 2008 Demographia Survey (data Sept Qtr 2007) illustrates that of the 227 urban markets covered within the 6 Anglo countries – the Median Multiple (median house price divided by gross annual household income – refer Fig 1, Page 11) was US 3.6 times household earnings – Canada 3.1 – Ireland 4.7 – UK 5.6 – Australia 6.3 – New Zealand 6.3.

At its peak – California hit in excess of 9 times earnings. With the collapse of the California bubble – it now seems likely than Sydney and Australia will have the most inflated markets in the 5th Annual Demographia International Housing Affordability Survey – due for release January 2009 (data Sept Qtr 2008).

At or below 3 times annual household income should be considered “real value” – above that “bubble value” or “fake value”.

This would suggest that the US has to work out of the system around the equivalent of 70% of its GDP – the UK and Ireland slightly below double – New Zealand and Australia, slightly above the equivalent of double their GDPs of fake or bubble value.

The greatest advantage the United States has is the diversity of its urban markets – where the soundly governed “discipline” the poorly governed. The rigid “one size fits all” regulatory regimes of the UK, Ireland, Australia and New Zealand have far larger bubbles and greater problems – and will not have the capacity to “self correct’ as quickly as the United States housing markets. An example of a rigid regulatory environment is the “Japanese bubble” which took 16 years (1990 – 2006) to correct.

July Existing-Home Sales Show Gain - NAR July Report - issued 25 August 2008

Existing-Home Sales Regional Breakouts - NAR

Realtors say existing home sales rose in July: Financial News - Yahoo! Finance

Real Time Economics : Economists React: Troubling Housing Inventories – Wall Street Journal – Economists and General comments

Home Sales Are Up, but So Are Inventories - The Home Front (usnews.com)

Scoop: Housing: The Disaster Zone Of California - Hugh Pavletich


ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news