News and Opinion, sponsored by RaboPlus

By Hugh Pavletich

Within this article - The Comprehensive State of the U.S. Housing Market: Learning to Love the Housing Data and Forgetting the Economic Facts. Everything you wanted to know about U.S. Housing Trends. » Dr. Housing Bubble Blog – Dr Housing Bubble (based in California) asserts that of the 129 million residential units in the United States – some 15,950,000 are vacant – and therefore overall the United States has a huge oversupply of residential stock.

There are other United States commentators making the same assertions – for example Colin Barr of Fortune magazine in Housing market still faces a big glut – Nov. 10, 2009.

The US Census Quickfacts (Texas page – with US figures alongside) states that the 2008 US population estimate is 304,059,724 and that the persons per occupied household in 2000 was 2.59.

As societies become more affluent, persons per household should fall (note Texas persons per household is slightly higher on these 2000 figures at 2.74 per household – likely due to the higher Hispanic population with larger families).

Conversely – through these  economic downturns – it is likely that household sizes would increase somewhat.

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By Rodney Dickens, MD of Strategic Risk Analysis

With summer holidays just around the corner it seemed appropriate to have an overview look at the coastal and resort property market on which we have released over a dozen reports on particular parts of the country over the last two years (the past reports are stored on our website in the Property Insights section).

In this overview we look at why a speculative bubble developed in these markets, we look at where we are now in the boom-bust cycle, we look at the humongous affordability challenge facing the next generation of would-be holiday home owners and we look at the big-picture demand-supply challenge facing many coastal and resort markets. We use insights from several parts of the country, including Thames-Coromandel, Queenstown, Taupo, the Western Bay of Plenty and Mangonui-Far North, to highlight the issues or challenges facing the coastal and resort market, especially the section/subdivision segment.

The making of a speculative bubble

Often it is only generally accepted that a speculative bubble exists in a market after it comes crashing down (i.e. it must have been a speculative bubble because only speculative bubbles are followed by crashes). However, having seen several bubbles first hand, including angora goats, ostriches, mohair rabbits, the US IT sector, the Auckland apartment market and the Auckland office building market prior to the 1987 crash, I believe it is possible to identify whether you are dealing with a speculative bubble well before the crash.

For some time it has been obvious to me that the coastal and resort section markets in numerous parts of the country were in the grips of a speculative bubble that would end in tears, so I took it on myself over the last few years to warn all and sundry about this with the hope that those with open ears and open minds would take the warnings seriously and act accordingly. Obviously, not everyone has wanted to hear this message, which is understandable given the number of people whose livelihoods and wealth are tied to these markets.

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This video is a compilation of television interviews with Euro Pacific Capital President Peter Schiff in 2006 and 2007. He warned of the credit crunch, the bursting of the housing bubble and stocks slump.

Many thanks to Sargon Elias at CMC markets to tipping us off to this interesting video.

http://www.youtube.com/watch?v=2I0QN-FYkpw

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Stock markets have had a terrible week. The Footsie had its worst performance since 2002, Asian markets their worst in 27 months and the Dow hemorrhaged.

Markets had rallied since mid-July on the back of falling oil prices, but perceptions have changed: the dominating thought now is that the weakness of the global economy has caused commodities to fall.

A global economic slowdown looks very real as profits fall, house values collapse, food and energy costs hurt consumer’s discretionary dollar, and unemployment is rising.

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