Global Housing Slowdown

Two main points in the article:

  1. Most global cities’ RE are overvalued based on long term rent and income multiples; and
  2. Price appreciation is slowing down, globally.

Prices in Vancouver are 65% overvalued by the same metric. The figures for Amsterdam, Copenhagen and Sydney are around 50%, and for London 59%, with rent consuming half of gross pay. In just four of our cities are prices at or under fair value: Tokyo, Milan, New York and Singapore.

But our index suggests that property prices may be near a turning point. The average rate of house-price inflation across our 22 cities has slowed, from 6.2% annually 12 months ago to 4.7% now. In six cities prices have fallen from recent peaks.

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I actually think their “overvalued” label is quite BS. But that the slowdown trend is worldwide was slightly surprising to me.

Redfin and Zillow stocks are in the toilet

You don’t care about stocks, remember???

He would like to care, but unfortunately isn’t his strong suit…

Hey, do what you are good at. If it happens to be RE, so be it…

Deceleration is good. If you look at the housing crisis, the gains actually accelerated right before the end. That’s the euphoria of a blow off top. We are calming down before euphoria hits.

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So you’re saying there will more upside to go before we fully correct?

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In SFBA, we saw acceleration in 2017.

We usually have acceleration for euphoria then a sharp downturn to negative. A lower growth rate is just a healthy reversion to the mean. I also don’t think we’ll see another 2008 type crash any time soon. If you look, the only other time RE dropped that much was the great depression. The typical drop is 5-10%.

2017 was exceptional. 2018 january was the top. I don’t know what it is if it doesn’t look like euphoria?

I guess you don’t remember the euphoria of the 2008 top. April/May were higher than January. Yr-yr prices are still higher.

I was not in the us back then, so no.

Forgive me! I was only a freshmen in college. :slight_smile:

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RE stocks… trend with RE more than the stock market

We aren’t even close to euphoria and probably won’t reach it due to stricter lending standards. I doubt there are strippers in Florida buying homes via no doc loans. Bubbles are always the result of easy credit. Credit isn’t easy.

The default rate for conforming loans was actually quite low. The worse loans were written in 2006. Conforming had a 10.5% default rate while non-conforming had a 43.7% default rate. Also, conforming were 23% ARM while non-conforming were 69% ARM. Rate increase at ARM reset was 2.9% conforming and 5.5% non-conforming. Unless there are a ton of non-conforming ARMs that’ll reset 5%+ higher, then we aren’t headed to another housing crisis.

I also don’t think people realize how severe the bank/credit freeze was when the great recession hit. You had a multi generational high for unemployment, no access to credit, and people that were leveraged beyond what they could afford thanks to no doc loans.

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29 years old boy :slight_smile:

Do any of us care about activity level? We care about price levels. They are trying to create fear with sensational headlines.

Well, I suppose we should consider it (or be accused of cherry picking, like on here!!!). Again, my defense is that I am just reporting on houses that I was tracking for some reason of interest. Sure, not reporting on those that die on the vine…