Average British real estate prices drop 6,000 pounds in a month.

[BigBagel]

http://www.telegraph.co.uk/finance/p...n-a-month.html

Paging Mega.

[Mega]

Re: Average British real estate prices drop 6,000 pounds in a month.

http://www.itulip.com/forums/showthr...Limey-bastards!)

[Starving Steve]

Re: Average British real estate prices drop 6,000 pounds in a month.

This sharp drop in the UK house prices nicely coincides with the sharp drop in California's real estate prices, at least here on the Central Coast of California (around Monterey Bay). The drop on the Central Coast of California is especially in the market for McMansions because of their difficulty to finance, also their high cost of upkeep.

Back of the envelope calculations indicate to me that the McMansion market has dropt by roughly 75%, so a $1.7 million dollar home at the dot.com peak in prices ( the Greenspan top ) is now going for about $400K or $500K in all-cash. Real estate deals as late as August of this year are now falling-through.

Some examples:

1.) Montery County MLS#80505244 Blue Heron Lane, Aromas, California: two homes on one large estate lot, now on the market again but at an asking price of $725,000, and bank-owned;
2.) Montery County MLS#81003893, Summerland Road, Aromas, California: two homes on one large estate lot, said to be sold by a bank for $440,000 (all-cash).

Remember to note that these prices are 2-for-1 price; the buyer gets two homes for the price, so it's a "two-for-deal".

So no-wonder, Silicon Valley exhibits signs of despair: dark at night, little traffic, empty freeways, almost empty airport, somber mood, little talking or merry-making, empty Taco Bell, empty shopping centres, empty downtown San Jose, and empty everything.

And where are people going to get the cash to buy the McMansions?????????????? Where is the income??????????? Where are the good jobs???????? Where are the fat bank accounts??????? Where are the interest and dividend incomes, especially now that interest rates are zero??????????

Starving Steve tells all, and the story is just beginning......... And the beauty of this puppy is that when interest rates finally do go up--- and they will--- the bottom falls-out of everything. Then come the for-profit healthcare costs for the aging baby-boomers, but this is yet to come.........

[mooncliff]

Re: Average British real estate prices drop 6,000 pounds in a month.

BoE under pressure to devalue pound... more QE?

http://www.marketoracle.co.uk/Article23320.html

[hayekvindicated]

Re: Average British real estate prices drop 6,000 pounds in a month.

This sharp drop in the UK house prices nicely coincides with the sharp drop in California's real estate prices, at least here on the Central Coast of California (around Monterey Bay). The drop on the Central Coast of California is especially in the market for McMansions because of their difficulty to finance, also their high cost of upkeep.

Back of the envelope calculations indicate to me that the McMansion market has dropt by roughly 75%, so a $1.7 million dollar home at the dot.com peak in prices ( the Greenspan top ) is now going for about $400K or $500K in all-cash. Real estate deals as late as August of this year are now falling-through.

Some examples:

1.) Montery County MLS#80505244 Blue Heron Lane, Aromas, California: two homes on one large estate lot, now on the market again but at an asking price of $725,000, and bank-owned;
2.) Montery County MLS#81003893, Summerland Road, Aromas, California: two homes on one large estate lot, said to be sold by a bank for $440,000 (all-cash).

Remember to note that these prices are 2-for-1 price; the buyer gets two homes for the price, so it's a "two-for-deal".

So no-wonder, Silicon Valley exhibits signs of despair: dark at night, little traffic, empty freeways, almost empty airport, somber mood, little talking or merry-making, empty Taco Bell, empty shopping centres, empty downtown San Jose, and empty everything.

And where are people going to get the cash to buy the McMansions?????????????? Where is the income??????????? Where are the good jobs???????? Where are the fat bank accounts??????? Where are the interest and dividend incomes, especially now that interest rates are zero??????????

Starving Steve tells all, and the story is just beginning......... And the beauty of this puppy is that when interest rates finally do go up--- and they will--- the bottom falls-out of everything. Then come the for-profit healthcare costs for the aging baby-boomers, but this is yet to come.........

If prices have already dropped 75 percent (which Im not so sure about but I have no local knowledge) then it is unlikely they will drop that much more from here. The issue I have with buying real estate in California is that from being the richest and best state in America it has deteriorated into one of the worst and it is not going to get better. In a couple of decades there will be no difference between Mexico and California (parts of LA have got there already). The key question is: is it enough for California to become an overcorwded hellhole for Real Estate to make sense as an investment at the bottom? Without law and order, no.

The basic problem you have is that the source of revenue for California's ridiculously bloated government is shrinking rapidly due to out-migration of the middle class. The cost of keeping that government running (with its overburdened welfare state) will skyrocket as more and more Latino immigrants working on ultra-low wages pile into the state. The end result will be a totally dysfunctional society that won't be all that different from Mexico. Im not sure I'd want to buy into THAT future.

[GRG55]

Re: Average British real estate prices drop 6,000 pounds in a month.

If prices have already dropped 75 percent (which Im not so sure about but I have no local knowledge) then it is unlikely they will drop that much more from here. The issue I have with buying real estate in California is that from being the richest and best state in America it has deteriorated into one of the worst and it is not going to get better. In a couple of decades there will be no difference between Mexico and California (parts of LA have got there already). The key question is: is it enough for California to become an overcorwded hellhole for Real Estate to make sense as an investment at the bottom? Without law and order, no.

The basic problem you have is that the source of revenue for California's ridiculously bloated government is shrinking rapidly due to out-migration of the middle class. The cost of keeping that government running (with its overburdened welfare state) will skyrocket as more and more Latino immigrants working on ultra-low wages pile into the state. The end result will be a totally dysfunctional society that won't be all that different from Mexico. Im not sure I'd want to buy into THAT future.

With a stereotype description like this I get the impression that you've not actually spent much time in California? It's a lot more varied than you have described, and although it has some serious, serious problems, it also has some of the highest concentrations of the most important ingredients the USA is going to need [and that EJ describes in his book] to restructure its economy.