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

 

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Interest Rates: NZ Dollar Jumps After RBNZ Trims OCR

The New Zealand dollar jumped more than half a US cent after Reserve Bank governor Graeme Wheeler cut the official cash rate by a quarter-point and said the currency needs to be lower, while dropping a reference to criteria that justified intervention. More>>

ALSO:

Drones: New 'World-Class' Framework For UAVs

The rules, which come into effect on 1 August, recognise the changing environment and create a world-class framework that accommodates ongoing development while still ensuring the safety of the public, property and other airspace users. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news