Monday, October 25, 2004

More unsettling news from the London housing bubble.
U.K. house prices fell in October at the fastest monthly pace since at least February 2001, according to the property Web site Hometrack, as five interest-rate increases since November damp demand for credit.

Home values declined 0.6 percent, the fourth consecutive decline, to 165,800 pounds ($303,099), after a 0.3 percent drop in September, the Web site said. The average price is at its lowest level since April. . . .

No region or city in the U.K. or Wales posted house-price increases in September, with London leading the declines. Home values in south-west, south-east and east London dropped 1.2 percent, while north London saw a 1.5 percent decline, Hometrack said.
  1. the IMF has shown that housing prices are coordinated across the major industrialized countries;
  2. the average British worker has enjoyed much higher real earnings gains (+8.8%) than the average US worker (+0.6%) over the last four years; and
  3. the housing price to earnings ratio in the UK is far lower than in the bubbliest markets in the US
and you've got a forecast for a hard rain falling on the US housing bubble in 2005.


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