In the video clip, Advisor to IMF Research Department, Mr. Prakash Loungani. states that in general, a Housing Upturn Cycle lasts about 6 years, with prices rising by about 45%, while in the Housing Downturn Cycle, it usually lasts 4 years, and prices drop by about 25%.
Right now, house prices in US have dropped by 25 % on average, depending on the areas we are looking at. However, before you rush to buy, do invest some time to listen to Professor Roubini, (in my earlier blog) who is of the opinion that housing prices will correct by 40% this time around.
In my opinion and experience, Housing Prices have never gone any where without the stock market having gone up substantially first, and the Unemployment Rate usually comes down. in the process Both these factors add to the liquidity and wealth of the general public, and with this new found wealth, only then will people start to think about longer term financial commitments like properties.
There is no hurry to buy any property at this stage. Watch out for the US Unemployment figures to drop first, and the US Housing Prices to stabilize. The distress selling of properties is expected to continue for another 6 months to a year, at the very least. In any case, the key indicators are that
Three key areas in US are worth monitoring for price stability, i.e. Los Angeles (California,) Las Vegas (Nevada) and Miami (Florida). These are the hardest hit cities / states in the US, but they are also the darling stars of the housing speculative bubble a few years ago. If these areas are not recovering, other areas' property prices will not go very far from where they are today, even though they have been less hit by the housing crisis.
Best wishes,
Ooi
© Copyright of Praesciens.blogspot.com, 2008
In my opinion and experience, Housing Prices have never gone any where without the stock market having gone up substantially first, and the Unemployment Rate usually comes down. in the process Both these factors add to the liquidity and wealth of the general public, and with this new found wealth, only then will people start to think about longer term financial commitments like properties.
There is no hurry to buy any property at this stage. Watch out for the US Unemployment figures to drop first, and the US Housing Prices to stabilize. The distress selling of properties is expected to continue for another 6 months to a year, at the very least. In any case, the key indicators are that
- the US Housing Mortgage Defaults will have to slow down drastically,
- before the actual Mortgage Distress Selling starts to slow down.
Three key areas in US are worth monitoring for price stability, i.e. Los Angeles (California,) Las Vegas (Nevada) and Miami (Florida). These are the hardest hit cities / states in the US, but they are also the darling stars of the housing speculative bubble a few years ago. If these areas are not recovering, other areas' property prices will not go very far from where they are today, even though they have been less hit by the housing crisis.
Best wishes,
Ooi
© Copyright of Praesciens.blogspot.com, 2008
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