Is the Bull Market in Housing a Bubble?
The answer depends on your definition of “bubble”… and the market under the microscope. “House prices differ widely across OECD countries, both with respect to recent changes and to valuation levels,” the OECD advises in a report on residential real estate around the world. Measured by the recent price-to-income ratio (a measure of affordability) relative to its ... Read more
Monitoring Risk in the Housing Market
Housing is the weak link in an otherwise upbeat trend for the US economy. Deciding if this is a temporary soft patch for real estate or the start of something darker is still a work in progress. The potential for trouble is certainly lurking, as the recent run of weak data in residential sales and construction ... Read more
Dutch Domestic Demand Dragging Real Home Values
Today Statistics Netherlands (CBS) warned “House Prices Nosedive“. Prices of existing owner-occupied dwellings sold in July 2012 were on average 8.0 percent down from July 2011. This is the most substantial price drop since the price index of existing residential property was first recorded in 1995. In real terms and indexed to 2005, home values are ... Read more
ECB Rates Policy is Clogged in Key Periphery Markets
How the Euro area (EA) will grow, according to Mario Draghi: The outlook for economic activity should be supported by foreign demand, the very low short-term interest rates in the euro area, and all the measures taken to foster the proper functioning of the euro area economy. In this post, I address Draghi’s point that the ... Read more
Housing Bubbles: Less Frothy but Europe is Behind
Wolfgang Muenchau’s article in the Financial Times, There is no Spanish siesta for the Eurozone, inspired me to update my post on housing bubbles around the world (really just Europe and the US). He argues that Spain’s bubble was much more extreme, and that the price adjustment is less mature compared to the others. I would ... Read more