Real Estate Market News – Nothing is going to stop the correction going on

As the real estate market corrects itself, one thing is becoming abundantly clear. Throwing taxpayer's money at the problem is not helping, nor is it going to. We are way beyond that. Real estate values are correcting all over the world and giving vast handouts to the banks to prevent them from being free market economy traders is not going to stop them. In a genuine free market, these banks would have gone out of business long since.

Back in 2007, Federal Reserve Chairman Ben Bernanke said he could fix the housing bubble once and for all, but refused to do so. We need to let it correct and as fast as possible. It is unclear just exactly how much money the various governments are prepared to print, but one thing is certain - it is not going to prevent the correction.

Gordon "no more boom and bust" Brown, the UK's Prime Idiot, has persuaded the Bank of England to reduce interest rates down to the point where you are better of keeping your money under the mattress, and next week the BOE will begin over-paying banks that can not add 2+2 together and come up with anything less than 500,000, for their "bad assets." I have a few bad assets I am interested in selling at 100,000 times their actual value myself. In the meantime we need to understand that this is actually called printing money.

New York faces an interesting dilemma, with a number of large apartment complexes now facing foreclosure courtesy of new laws written to protect renters in that state. Speaking of foreclosure in NY - as almost everyone and his grandmother predicted, foreclosures in New York jumped a massive 64% (PDF download), when the moritorium ran out.

The Telegraph is doing a sterling job of disguising advertising as editorial in an effort to persuade people that the French property market is not collapsing along with all the other markets. Which rather contradicts a statement made recently by the FNAIM, a French estate agent group, which can be summarized:

• - average price falls of 7% in Q2 2008, compared to Q1 2008. Massive fall.
• - average fall in 2009 of up to 10% when compared to same period previous year.
• - Brit favourites, like Dordogne and Charentes see biggest falls of nearly 20%.
• - Rate of decline greater than last slump in 92-96

The rate of decline seen during the last slump ended with prices falling over 40%, and if FNAIM is coming clean, you know things are very, very bad indeed, because France had been almost untouched until last year. Both the Nice Matin and Le Figaro reported on it but shied away from the true figures. A great many French transactions are done "under the table" and what few sales are happening are happening well under asking prices. Property prices in France have been visibly falling for some time and agents windows are littered with price reductions.

On a positive note, Carla Bruni managed to sell her family castle for 9 million Euros to an unnamed Saudi prince - so it is not all bad news.