Sales of new homes rise, but miss forecasts - Aug. 26, 2008 – CNN Money
Also – the Data Quick / California Association of Realtors persistent median house price differences.
I note too - the Houston Association of Realtors is getting in to the “revision game” – adjusting previous months median house prices – in its latest Report
The total value of the US residential stock appears inaccurately reported – relying on the Fed Flow of Fund $20 trillion figure 9referring to owner occupied housing only – around 7- million units) – with household debt at $12 trillion – implying that households are debt loaded to 60% of residential value – which should be obviously inaccurate to researchers and commentators. With in excess of 120 million residential units and a likely average price of around $300,000 – this would suggest that there is in excess of $30 trillion of residential stock in the USA – possibly as high as $36 trillion.
There is an overdue need to get a “fix” on the extent of “bubble value” in individual markets – across countries and internationally.
The debt load on households at 30% seems more realistic (many have no mortgage debt of course).
As an example – New Zealand residential stock (all types) reached $640 billion for 1.6 million units and household debt of around the $170 billion mark (refer Reserve Bank of New Zealand website) – which would indicate a 26% debt load in relation to total residential value. And New Zealand households are considered highly indebted at about 160% of net disposable household income – the Australians I understand are around the 177% mark currently – the US substantially less.
There are enormous commercial and political pressures on public and private organizations to “paint pictures’ – that a recovery is “just around the corner”.
Hugh Pavletich
Christchurch
New Zealand
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