American banks wake up to reality.....

HAMISH_MCTAVISH

shortchanged wrote: »

Hamish you know you are talking rubbish. If house prices halved in this country for example they would be selling in large numbers and you know it.
You consistantly state that price has nothing to do with the lack of sales when it is blatantly obvious that if house prices were cheaper then they would sell.

Absolute nonsense. That sort of mentality displays a breathtaking ignorance of economic reality.

Go look at the housing market in your own area and I'll put money on it that the houses that do sell are the ones that are realistically priced.

Actually the houses that are selling here are selling at higher prices than they were in 2007.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Which are only uneconomic because they're worth next to nothing.....

Which is caused by oversupply.

No, they are uneconomic because they are beyond a state of liveable repair.....and therefore worth next to nothing. Same happens in this country all the time. Only difference in this country is the land is often worth something, whereas in the US, land is in abundance.

You are being completely fatecious here Hamish.

They are handing over uninhabitable buildings, and buildings which are beyond economic repair, for bulldozing.

You only have to look at the numbers handed over to see this isn't a way to deal with oversupply.

Bank of America had 40,000 foreclosures in the first quarter, saddling the lender with taxes and maintenance costs. The bank announced the Cleveland program last month, has committed as many as 100 properties in Detroit and 150 in Chicago, and may add 10 cities by the end of the year, said Rick Simon, a company spokesman.

250 properties out of 40,000 foreclosures in the first quarter, and you make out this is to deal with the oversupply. They are just run down beyond repair, so get bulldozed and the land donated, to save the Bank of America the costs of dealing with them.

You really do know how to talk nonsense and word things so they are on the verge of all out lies.

MacMickster

HAMISH_MCTAVISH wrote: »

No.

Housing is a critical component of GDP. There can be no sustainable recovery whilst asset prices are falling.

As has clearly been the case.

House building or construction in general is indeed a component of GDP (and maybe demolition should produce a negative figure) but house prices are not a component of GDP.

In the US as in the UK, people have used rising house prices to borrow against the rising equity in their homes. The borrowed money is then used to buy manufactured goods and thus create demand in the economy, so impacting on GDP.

This pattern of increasing personal debt to create demand in the economy is now generally accepted to be unsustainable. If this debt-fuelled demand disappears from the economy, then there are only two ways to replace that demand.

The first of these is by significantly increasing exports. Unfortunately the US, like the UK, imports far more than it exports, and this trend is unlikely to be reversed in the near future.

The only other way to replace the lost demand in the economy is to avoid tying up such a high proportion of personal wealth in fixed assets such as housing, and instead to keep it circulating.

Money is the lifeblood of the economy, and if it fails to circulate the economy will whither and die. The last thing that the US economy needs right now is higher house prices which will remove capital from circulation.

sabretoothtigger

No surprise then that UK prices are 10% below peak, USA are 38% below peak, and Ireland is 48% below peak.

Also UK currency has fallen 20% where for the other two countries this is not so much the case.

I do agree UK would appear to have more demand, just very simply we have greater population density.
USA has suffered ghost town migratory behaviour for decades, UK has the north/south divide but its much less

geneer

We of course are quite different in the UK, in that the rise of our house prices was purely due to demand and supply and had nothing to do with loose lending and high risk banking strategies.

That will be why the ration of house price to house hold income increased from 2.5ish to almost 6. Right Hamish?

pqrdef

MacMickster wrote: »

The only other way to replace the lost demand in the economy is to avoid tying up such a high proportion of personal wealth in fixed assets such as housing, and instead to keep it circulating.

Well it's not like the money people lay out on their mortgage payments is being stashed under the floorboards. Where do you think it's going?

crash123

HAMISH_MCTAVISH wrote: »

Actually the houses that are selling here are selling at higher prices than they were in 2007.

Give some examples then!

shortchanged_2

crash123 wrote: »

Give some examples then!

He can't because he is talking his usual load of guff.

HAMISH_MCTAVISH

shortchanged wrote: »

He can't because he is talking his usual load of guff.

So if I go to the bother of extracting a load of examples, I can expect a full apology and admission you're wrong then?

shortchanged_2

HAMISH_MCTAVISH wrote: »

So if I go to the bother of extracting a load of examples, I can expect a full apology and admission you're wrong then?

Yes, go ahead then.