These are a few recent headlines and predictions about when the real estate market will bottom out. Of course, there are a select few who have been calling the bottom for some time now. Oddly enough, these tend to be real estate agents and newspaper columns. Speaking of newspaper columns, we are sad to see the end of “Raising the Roof,” the erstwhile International Herald Tribune and more recently, New York Times’ very own property blog. Kevin Brass will continue to write the print edition property column for the NYT, but the online version is no more. Honestly – this was one of the few international newspaper property blogs worth reading, and I don’t think I ever once saw a “We have reached bottom, Buy Now!” headline – which may be why it has gone the way of all things? Newspaper advertising is drying up faster than the 120% mortgages did.
According to Ben Bernanke, the Federal Reserve chairman, all the major US banks are now solvent and prepared to weather the downturn, so you can expect house prices to start climbing again. Except for the small matter of needing another $130 billion in capital. Not being an economist, I don’t expect to be able to understand why a solvent bank would need to raise more capital, but there you go. Thankfully, the banks can also value their assets at whatever price they feel is appropriate so all is now well. General Motors will only lose $6 billion this quarter, so we should see some improvement in the general economy. Only 12 % losses in the commercial property markets are now expected, despite the fact that commercial property has devalued by around 40% since peak prices.
Moody’s lates REAL commercial property price index is a stark reminder of the current financial situation. Showing a 5.5% drop in prices in January, this is the largest one-month drop in the history of the index.
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The Citi Private Bank report commissioned by Knight Frank shows that the largest drops in residential property prices were in Hong Kong (-26.8%), the Home Counties (-19.4%), London (-16.9%) and Dubai (-19.1%).
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