Housing Market Tracker - A Brief Look at Global House Prices
Global House Prices
Home Sales Plummet In Spain. “The National Statistics Institute: Home sales in Spain fell 27% in January compared to a year ago, [and] the number of mortgages granted in January plummeted by nearly 26% compared to January of 2007, the biggest such drop since 2004… Housing prices rose 17% in 2004 and 9.1% in 2006. But… interest rates have jumped three points in as many years, there is a glut of housing on the market and banks spooked by the U.S. subprime crisis are now much tighter when it comes to lending. Housing prices in major cities like Barcelona, Madrid and Valencia… are now falling.”
Light at End of Subprime Crisis Tunnel? “Housing problems are not confined to the US. A report Thursday showed that Ireland's economy slowed in Q4’07, in part because of a construction sector slump as the country's decade-long property boom ended. Layoffs in the sector helped to push jobless claims in February to their highest level since 1999. In Spain, construction company SEOP declared insolvency last week, becoming the first major builder to succumb to the credit crunch and slowdown in the housing sector. Britain's property market has also looked wobbly. On Friday, the Nationwide building society will release its U.K. house price data. Economists [expect] a small decline… the fifth consecutive down month.”
Japan's Land Prices Climb for a Second Year, Growth Set to Slow. “Ministry of Land, Infrastructure and Transport: Land prices in Japan rose for a second year in 2007 after a 15-year slump, as private funds and REITs competed to acquire properties in the country's largest cities. Prices increased 1.7% on average after climbing 0.4% a year earlier. Average commercial land advanced 3.8% from 2.3% in 2006, and residential land rose 1.3% from 0.1%. Commercial land values are still less than a third of what they were at the height of Japan's bubble economy in 1991, while home land prices stand at half the peak. Growth in values may slow as… lenders worldwide [struggle] to finance real estate purchases.”
UK March House Prices Rise 0.8 Pct From February – Rightmove. “Rightmove property survey: House prices have risen for the second month running in March as sellers pushed for near record high prices, despite increased competition from other unsold properties and tighter credit conditions… The average asking price rose 0.8% between February-March, a slower rise compared with the 3.2% increase last month. The average price of a UK home now stands at £239,655, up 5% from last year, and is just 1% below the record high seen in October last year. The price rise is despite a record increase in… average unsold houses per estate agency to 67 from 56 a year ago.”
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This article has 1 comment:
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Steven R. Smith
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22 Comments
My Website
Mar 27 09:36 AMWe can predict and are teaching Appraisers in my market area how to predict the bottom of local housing markets and the timing. We do this by measuring the rate of change over the last 12 months, and chacking for velocity.
We check the last 3 months and compare to the average for the 12. If it is constant {which it is not}, it is one thing. If it is increasing {which it is}, then it is a different thing.
Example, last week we taught a group of 12 to project the future in a market that had gone down 16% in a year, but 10% of that was in the last Three months. Using 3.3% per month we projected the Trend Line outward in Time.
Using Household Income, 32% underwriting ratio and a Fixed Rate Loan Constant of .0063, we calculated the supportable Loan Amount and added a 20% down payment.
Next we subtracted this calculated amount from the Average House Price for our area we were studying and came up with a 36% Differential.
This is the amount left to be shed before we could expect the market to Stabilize and stop going down.
In this example, the market will stabilize in 8+Months. Try it in any area where you can get HHI and Sales Price Averages. It works.
Actually, Prices might stabilize a little higher, but so what, we are not brain surgeons trying to be 100% precise, but we can be predictive with a certain level of certainty.
The breed of appraisers who are learning this type of thing are forming an new order, called Property Economists. Small in number, but led by the teachings of George Dell, MAI, SRA of San Diego and myself.
The next course to be offered will be a four day session on Stats and Graphs for Appraisal Applications in Roseville, CA on 4/8/08