What is happening in the US House market?

[Pecker]

The beauty or ugliness of the housing market is in the eye of the beholder.

I've owned my present house since 1991 and have watched its value increase over 200%. I have nothing to complain about if the value drops a few percent.

 

[DC_DEEP]

There is a gadget on iGoogle that let's you see foreclosures in your area, there are over 30 in my area alone. Most foreclosure, but a good amount due to tax liens as well. Sad sign of the times.

Good to see you back DC old friend! :smile:

Thanks, Osiris. We had a great vacation. I'll post more on that in a few days! *big bear hug*

The beauty or ugliness of the housing market is in the eye of the beholder.

I've owned my present house since 1991 and have watched its value increase over 200%. I have nothing to complain about if the value drops a few percent.

True enough, Pecker, but you are really in the housing market if you aren't in the process of buying or selling. In my area, it's just a big ugly mess right now - for both buyers and sellers, but it's at a point now where sellers are taking a bit more of a hit; not like it was when I was the buyer. I had never heard of an "escalation clause" before moving to this area.

 

[Drifterwood]

The British have a peculiar obsession with home ownership. And so like anyone with an obsession they can be manipulated.

UK long term interest rates had been in the region of 10%, so when suddenly we had interest rates below 5%, instead of everyone enjoying having more cash people geared themselves through the roof.

Whilst there were some market reasons for house price inflation, there was also the rationale that now you can afford twice as much because the interest rates have halved, the price of the house will double. What is going to be interesting here now is whether they will apply the same reasoning to house price values now that the interest rates have gone up.

Prices should fall or rather be corrected by up to 30%, but because so many people have borrowed up to the hilt against the presumption of equity, they could well have borrowed beyond the market value if they have to sell. If they can't keep up with the new level of repayments, they will of course have to sell. This is what is beginning to happen, and of course it becomes a self fulfilling prophecy driving prices down and exposing more "owners".