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ok lets get deep into real estate bubbles
lets suppose that you are trying to identify housing valuations in a particular market, and trying to see if they'll go up and down.
housing prices are quite interesting and housing crises are even more interesting for a few reasons.
housing prices are quite interesting and housing crises are even more interesting for a few reasons.
is it about the AMOUNT OF UNITS AVAILABLE
or is it about the price at which they are AVAILABLE?
it's hard and easy to find the cause of their pricing.
Many places are now in a housing deficit and also have insane pricing. Leading you to believe it's solely supply/demand.
or is it about the price at which they are AVAILABLE?
it's hard and easy to find the cause of their pricing.
Many places are now in a housing deficit and also have insane pricing. Leading you to believe it's solely supply/demand.
Many places in the UK have never recovered from the crisis in 08.
Why?
Accessibility to mortgages. But we all know that. SOMETHING ELSE TO CONSIDER
the area i was looking at, has still not recovered.
And in the period between 2000 - 2008, housing prices went up by 200%.
Why?
Accessibility to mortgages. But we all know that. SOMETHING ELSE TO CONSIDER
the area i was looking at, has still not recovered.
And in the period between 2000 - 2008, housing prices went up by 200%.
guess what the fucking mean income increased by?
14%
FOURTEEN PERCENT
14%
FOURTEEN PERCENT
So the market is a hoop, and first time home owners are asking the bank how high
and the bank is figuring out how high they can go
this is was ultimately reflects a bubble. where the debt is distributed at an unsustainable level.
this is similar to what happened to the EU.
and the bank is figuring out how high they can go
this is was ultimately reflects a bubble. where the debt is distributed at an unsustainable level.
this is similar to what happened to the EU.
https://en.wikipedia.org/wiki/European_debt_crisis
So what happened really is
They gave ALOT OF BAD DEBT in the wake of a really terrible fiscal policy, as the EU decided to treat it's union AS A SINGLE COUNTRY.
ALL the varying economies operating under one interest rate.
Fucking insanity.
So what happened really is
They gave ALOT OF BAD DEBT in the wake of a really terrible fiscal policy, as the EU decided to treat it's union AS A SINGLE COUNTRY.
ALL the varying economies operating under one interest rate.
Fucking insanity.
So what does this do?
It rewards poorer countries for taking out a lot of debt at a very cheap rate, so obviously they'll take until their pockets are full.
and so what if they can't pay it back? the optics were supposedly good.
It rewards poorer countries for taking out a lot of debt at a very cheap rate, so obviously they'll take until their pockets are full.
and so what if they can't pay it back? the optics were supposedly good.
The difference with a real deficit in supply is this
They CANNOT increase home prices without someone or something paying those rates.
The only way for people to buy at higher prices is:
1. Easier debt.
2. More income
You need to identify both of these possiblities.
They CANNOT increase home prices without someone or something paying those rates.
The only way for people to buy at higher prices is:
1. Easier debt.
2. More income
You need to identify both of these possiblities.
The problem with the UK now is that
Land is expensive. Construction is expensive.
When you couple them together, developments are massively expensive. So very few people can get involved and there's no incentive for competition.
Land is expensive. Construction is expensive.
When you couple them together, developments are massively expensive. So very few people can get involved and there's no incentive for competition.
The US is entirely different.
Land is abundant. Houses are made much more cheaply, and bubbles generally exist when both of these factors go out the window.
Is the growth unsustainable? Is it all built on a house of cards, or are the fundamentals in place for growth?
Land is abundant. Houses are made much more cheaply, and bubbles generally exist when both of these factors go out the window.
Is the growth unsustainable? Is it all built on a house of cards, or are the fundamentals in place for growth?
