IMF Says End of U.S. Housing Slump `Not Visible'

[boz]

from Bloomberg:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ao8IfKzWFWwQ&refer=home

July 28 (Bloomberg) -- The International Monetary Fund said there's no end in sight to the U.S. housing recession and warned that deteriorating credit conditions for consumers and banks may prolong a period of slow economic growth.

``At the moment, a bottom for the housing market is not visible,'' the IMF said in its Global Financial Stability Report, released today in Washington. ``Stemming the decline in the U.S. housing market is necessary for market stabilization as this would help both households and financial institutions to recover.''
......

Can australia decouple from US?
Or the IMF is wrong again? (they never get it right...

 

[Aaron Sice]

boohoo.

means those niagra, san diego, chicago deals just get sweeter and sweeter.

sorry, but i'm a glass half full person in these scenarios.

or the fact that the IMF are reporting on it means the crisis is already on the bounce back.

 

[DadOfSam]

boohoo.

means those niagra, san diego, chicago deals just get sweeter and sweeter.

sorry, but i'm a glass half full person in these scenarios.

or the fact that the IMF are reporting on it means the crisis is already on the bounce back.

Is that POV purely based on optimism, or are you assuming consumer/media sentiment is generally wrong? Does this mean that economic down cycles can only ever be short? I am genuinely interested in your opinion on this, as I do think superficially that your last sentance is a tad nieve.

Thanks in advance.

 

[Kingbrown]

Peter Schiff makes a compelling case for another 50%, 60%, 70% drop nominally in the median USA house price, and the US dollar also having further substantial drops.

 

[Aaron Sice]

Is that POV purely based on optimism, or are you assuming consumer/media sentiment is generally wrong? no Does this mean that economic down cycles can only ever be short? no I am genuinely interested in your opinion on this, i hope that's sarcasm as I do think superficially that your last sentance is a tad nieve.

Thanks in advance.

of course it's bloody naive - it's sarcasm. the IMF are always 3-6-12 months out with their reports.

me saying there was a bounce back already in place was sarcasm - a dig at the IMF. there is no technical or fundamental data to back this up. please don't invest on this opinion. past performance is no indication of future results. do not engage 4WD while moving. eye protection is recommended. caution - contents hot when heated.

 

[boomtown]

Peter Schiff makes a compelling case for another 50%, 60%, 70% drop nominally in the median USA house price, and the US dollar also having further substantial drops.

Have national median house prices ever dropped 50% in nominal terms in the Western world in the last 100 years?

 

[joeExpat]

Have national median house prices ever dropped 50% in nominal terms in the Western world in the last 100 years?

yes plenty of times. here's one of the most spectacular:
http://en.wikipedia.org/wiki/Japanese_asset_price_bubble
"Tokyo's residential homes were 1/10th of their peak" - i.e. 90% drop.

 

[Kingbrown]

Inflation adjusted, yes, of course. There are many examples. Nominally, I don't think so, inflation has prevented nominal declines as large as 50%. However, this thread is about the US, not the "western world".

Japan is a good example (although not in the "western world"): Japanese nominal home prices declined by an average of 40 percent. Still not 50%, but hey, the slide continues to this day. In some cities, the declines were worse, averaging 65 percent. Homes in Tokyo lost 80 percent (and are still dropping last I saw). Some commercial property in Tokyo (as an extreme example) lost 99%.

So, as for the US:

Last years drop of 1.4% was the the first national decline in the US median since the Great Depression.

This has now accelerated a further 6.2% in 2008 (according to the National Realtors association).

According to the same group, housing prices will fall another 10% to 15% over the next 12 months. That is a prediction from a REAL ESTATE association!

California, Washington, Oregon, Alaska and Hawaii, recorded a 14.5% drop over the last year.

 

[boomtown]

Let me ask the question again :

Has there ever been a NOMINAL decline of 50% in NATIONAL MEDIAN house prices in a WESTERN (ie not Japan) country in the last 100 years?

Or even 30%? Or even 20%?

 

[joeExpat]

Let me ask the question again :

Has there ever been a NOMINAL decline of 50% in NATIONAL MEDIAN house prices in a WESTERN country in the last 100 years?

Of course Japan is a Western country. If it's not, then I guess Australia isn't either.

 

[Kingbrown]

Let me ask the question again :

Has there ever been a NOMINAL decline of 50% in NATIONAL MEDIAN house prices in a WESTERN (ie not Japan) country in the last 100 years?

Or even 30%? Or even 20%?

Let me answer the question again:

"Nominally, I don't think so, inflation has prevented nominal declines as large as 50%."

I guess you skipped the rest of my answer as well.

Blinkers on?

 

[boomtown]

Im not going to engage in a discourse of Japanese economic history and why their incredibly restrictive tarriffs, foreign currency controls, non-tarriff barrriers and traditional high savings rate set it aside from English speaking Western countries.

Unless someone else comes up with an answer I will asssume that nominal national median house prices have never fallen 20% in any English speaking Western country in the last 100 years.

Edit: Kingbrown: your comment was about a nominal decline - not real decline. Also if you could please provide evidence of a real decline of 50% that would be handy.

Thanks

 

[Chris.R_WA]

Unless someone else comes up with an answer I will asssume that nominal national median house prices have never fallen 20% in any English speaking Western country in the last 100 years.

Thanks

But don't you know BT, that just means that we (and the US) are overdue for a 20%-50% decline

 

[Kingbrown]

United Kingdom 1990 - 1996 - real price decline of about 50%, yes, I know, it was actually about 45% ....but....

You do realise how many other "western world" and "english speaking" countries there are, right? Discounting some small island nations, I count USA, Canada, Australia, New Zealand.

So, no, there have been no nominal or real price declines of more than 50% in Canada, USA, Australia, New Zealand, or the United Kingdom.

Oh, in the last 100 years I meant.

 

[boomtown]

You are right - the pool of English speaking Western nations is fairly small.

Its just because of my narrow mind set that I have trouble comparing price and demand for Australia housing with demand for yurt huts in Tajikistan (which may have halved in nominal value in 2007 for all I know).

 

[Kingbrown]

This thread is about US housing, not Australian housing.

The US inflation rate is growing by the month.
We are already seeing increasing nominal drops.
Add those nominal drops to the inflation rate, the real drops are looking larger than ever already, let alone what might happen in the next few years.

I'm not a bear or bull on this, just trying to present facts.

 

[Aaron Sice]

c'mon boomie - everyone needs a yurt.

 

[banahers]

This thread is about US housing, not Australian housing.

The US inflation rate is growing by the month.
We are already seeing increasing nominal drops.
Add those nominal drops to the inflation rate, the real drops are looking larger than ever already, let alone what might happen in the next few years.

I'm not a bear or bull on this, just trying to present facts.

Some on this forum aren't interested in facts. They are in the denial phase

 

[boz]

This thread is about US housing, not Australian housing.

The US inflation rate is growing by the month.
We are already seeing increasing nominal drops.
Add those nominal drops to the inflation rate, the real drops are looking larger than ever already, let alone what might happen in the next few years.

I'm not a bear or bull on this, just trying to present facts.

Australia's inflation is going up by the month as well, we are at 4.5% and US is at 5%, on top of that Australia has the strongest currency on the western world. Australia is not decoupling from US in inflation term and we did have a rise in house price at same time as the US.
I know there are lots of professionist house investor here in this forum that have a lots of experience and knowledge.
I am trying to understand if we can follow a different path then US in the Future and why, is it may be because of the mining boom heping Australia or because of big trade with china we are better off?
When house prices drop 50% in nominal term?
don't know.
I can't really think of anything important that did drop 50% in nominal prices in a resonable timeframe. May be you should ask yourself when in the last 100 year major bank deposit drop 5% or more in nominal term?

 

[Aaron Sice]

Some on this forum aren't interested in facts. They are in the denial phase

that would be the case in normal every day life as well. why single out some on this forum alone?

very general post and a meek dig at those with bullish sentiment.