{"id":178321,"date":"2019-01-06T20:11:00","date_gmt":"2019-01-07T01:11:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2019\/01\/06\/look-out-below-5\/"},"modified":"2019-01-06T20:11:00","modified_gmt":"2019-01-07T01:11:00","slug":"look-out-below-5","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2019\/01\/06\/look-out-below-5\/","title":{"rendered":"Look Out Below"},"content":{"rendered":"

Two of the most overheated real estate markets in the world are Manhattan<\/a>, and Australia<\/a>, and both of them appear to be trending downward, which looks an awful lot like 2007:<\/p>\n

The median price of a Manhattan apartment has fallen below $1m for the first time in three years, according to a survey of sales in the final months of 2018, as real estate agents struggle to shift a glut of luxury properties and potential buyers worry about the outlook for the US economy. <\/p>\n

The median price paid for co-operatives and condominiums in the prime borough of New York City \u2014 some of the most expensive properties in the US \u2014 fell 5.8 per cent to $999,000 according to research by Miller Samuel, a real estate appraiser, and Douglas Elliman, a real estate broker. <\/span><\/p><\/blockquote>\n

And from the land down under:<\/p>\n

In its latest report on Australia, the OECD focuses to a disturbing extend on housing, household debt, what the current housing downturn might do to the otherwise healthy economy, and what the risks are that this housing downturn will lead to a financial crisis for the big four Australian banks, an eventuality that it says \u201cauthorities\u201d should make \u201ccontingency plans\u201d for. <\/span>

<\/span> The big four banks are huge in relation to the Australian stock market and the overall economy: Their combined market capitalization, at A$341 billion, even after today\u2019s sell-off following the OECD report \u2013 accounts for 26% of Australia\u2019s total stock market capitalization.<\/span>

<\/span> \u2026\u2026\u2026<\/span>

<\/span> But then there\u2019s the housing bubble, household debt, and the banks that have funded this bubble and that households owe this debt to.<\/span>

<\/span> The charts below are from the report. The first chart compares inflation-adjusted house prices of the two most magnificent housing bubbles, Australia (red) and Canada (green), Spain (ESP), and the US. The index measures changes in price levels, adjusted for inflation. Clearly, Australia and Canada are in a world of their own, but Spain, whose bubble collapsed disastrously and led to numerous bank resolutions and bailouts, got close:<\/span>
<\/a><\/span><\/p><\/blockquote>\n

It took more than 40 years for us to forget the lessons of the Great Depression.<\/p>\n

This time around, the lessons were ignored from day 1, or more accurately from January 20, 2009 on, and it looks like we are going to head down the same road all over again.<\/p>\n","protected":false},"excerpt":{"rendered":"

Two of the most overheated real estate markets in the world are Manhattan, and Australia, and both of them appear to be trending downward, which looks an awful lot like 2007: The median price of a Manhattan apartment has fallen below $1m for the first time in three years, according to a survey of sales …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[474,434,393],"class_list":["post-178321","post","type-post","status-publish","format-standard","hentry","tag-australia-and-new-zealand","tag-bubble","tag-real-estate"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/178321"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=178321"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/178321\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=178321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=178321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=178321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}