Housing And Real Estate News – Tuesday, July 11

We discuss Housing & Real Estate news covering Norway and London all the way back to Mortgage news in the United States in this video.

Bubbles pop in Real Estate just like all other Financial Assets. It was thought that the US Housing Market would never decrease in value in a substantial manner, that homeowners wouldn`t default on their mortgages above the historical averages, but that thinking changed in the 2007/08 Housing and Financial Market Crash helped in part by the Sub Prime Mortgage debacle.

I am sure London Homeowners thought the market would never go down materially as well, but we have seen a significant decline since the Brexit vote to leave the European Union as a confluence of events have hit the London Real Estate market, especially at the high end, to form sort of a perfect storm in capital no longer chasing the once hot market.

We have the foreign money laundering/portfolio diversification crowd pulling back all over the world from the big cities like New York and London, we have large financial institutions making contingency plans for relocating parts of their operations in other parts of the European Union Countries, and the 3% inflation more than offsets the reduction in interest rates for UK citizens overall buying power.

Throw in the fact that London has been on a nice run, the wind behind the Olympics ramp up from an investment standpoint has long since waned, and absent of any upside catalysts with all these downside catalysts, and given frothy prices, we get the popping of the top of the London Real Estate Bubble.

No one likes to use the word bubble, it is frowned upon in economics, but a 20% pullback off the highs in such a short timeframe with out the London or UK economy being in a massive recession signifies bubble like conditions or tendencies to my way of thinking.