As goes London, so goes California?
UK house prices in the 3-months to October fell by their fastest rate since December 1992 as the Bank of England's series of interest rate hikes and speculation of a housing market crash took their toll, a key survey showed.Recall that yesterday I pointed out how the first-time and marginal buyer -- which I defined as those potential homeowners putting down less than 20% and thus forced into mortgage insurance -- has been for all practical purposes eliminated from California housing markets. While the national figure is 25%, they are down to just 13% of the market in Los Angeles/Long Beach/Riverside, 13% in Sacramento, 8% in the Bay Area and 5% in San Diego.
The latest house price survey from the Royal Institution of Chartered Surveyors revealed that in the three months to October, 41 pct more surveyors reported a fall in house prices than a rise, 12 pct more than in September and the highest number reporting a drop since December 1992.
RICS attributed the dismal state of affairs to a lack of new buyers, with the number of sales falling by 25 pct from the same period a year ago to hit its lowest level in 9 years.
Recall also that housing prices actually fell in the third quarter in Orange County (-1.8%) and the Bay Area (-0.2%).
The IMF told us some months ago that there is a global house price boom and housing markets from Australia to the UK to Spain to the US are all linked together.
Look out below.