Housing.com News, Analysis & Opinion: Housing Bubble: Around the world

Man, I'd love to figure out the dollars-to-euro conversions for those interest rates. 4.4%? WOW. And note this quote in particular: "But the market may weaken in 2007. A slowdown in the US housing market will threaten world economic growth next year; this will have a knock-on effect here in the United Kingdom, and we expect this will take a further edge off our property market," Mr Said added.

It's worth noting that the same housing overvaluation took place in Japan, and it took them 10 years to recover, with a 60-80% drop in real estate pricing as the toll. The ultimate buyer's market, eh?

Read this excerpt from CFO Magazine in 2001 about Japan's bubble and its economic crises:

In Japan, housing prices are going down. Food prices are going down. The prices of goods are going down. Is that bad? No.

Japan had grossly overinflated prices because of its flawed system. I don't see this kind of deflation as unhealthy. In fact, I think it is fundamentally healthy. If the cost of doing business and the cost of living in Japan go down, people are going to end up investing more and buying more. This is the only way to get the economy growing again.

That's exactly what needs to happen in the U.S. to mitigate the bubble. But the problem is that we're so obssessed with keeping up with the Joneses and making sure we have bigger houses than all of our friends that we'll leverage ourselves into unmanageable debt just in the vague hope of appreciation down the line.

That's how subprime lenders like Ameriquest got away with their dirty deeds for so long, but luckily, the states came back to kick their tails.

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One of the most keen measures of a global economy is how you can look at the developments in other economies and see how they mirror--or oppose--your own. In the case of our housing boom/bust/bubble, it's worth noting that the U.K. is experiencing a similar slowdown. Man, I'd love to figure out the dollars-to-euro conversions for those interest rates. 4.4%? WOW. And note this quote in particular: "But the market may weaken in 2007. A slowdown in the US housing market will threaten world economic growth next year; this will have a knock-on effect here in the United Kingdom, and we expect this will take a further edge off our property market," Mr Said added. It's worth noting that the same housing overvaluation took place in Japan, and it took them 10 years to recover, with a 60-80% drop in real estate pricing as the toll. The ultimate buyer's market, eh? Read this excerpt from CFO Magazine in 2001 about Japan's bubble and its economic crises: In Japan, housing prices are going down. Food prices are going down. The prices of goods are going down. Is that bad? No. Japan had grossly overinflated prices because of its flawed system. I don't see this kind of deflation as unhealthy. In fact, I think it is fundamentally healthy. If the cost of doing business and the cost of living in Japan go down, people are going to end up investing more and buying more. This is the only way to get the economy growing again. That's exactly what needs to happen in the U.S. to mitigate the bubble. But the problem is that we're so obssessed with keeping up with the Joneses and making sure we have bigger houses than all of our friends that we'll leverage ourselves into unmanageable debt just in the vague hope of appreciation down the line. That's how subprime lenders like Ameriquest got away with their dirty deeds for so long, but luckily, the states came back to kick their tails. We can but hope to see more headlines like that in the future. ;)