Daily Archives: November 9, 2008

I want to talk about Foreclosures but first…

How’s this for a Headline….

…sales increased 96.7 percent; median home price fell 40.9 percent in September.

California Highway Patrol

LOS ANGELES (Oct. 24) – Home sales increased 96.7 percent in September in California compared with the same period a year ago, while the median price of an existing home fell 40.9 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported.

OK, like many of my readers you have heard about this “foreclosures” debacle in the USA. A while back it passed a benchmark in the first quarter (US financial year is different than ours, they are talking about 1st Oct – 31st Dec 07 here) and the number surpassed 1,000,000.

UPDATE: by June 2008, about 2.75 percent of all home loans, or about 1.75 million mortgages, were in foreclosure.

How could this happen, it’s such a large number?   Well some background is most definitely required.

Point 1

An interesting phenomenon occurred in California in 2006, and its makes for a pretty good start and a good example in itself. California has been called ground zero for the mortgage meltdown, as it has the second most foreclosure filings in the country.

Now we’ll use California as an example. Keep in mind, as an economy, if California was a stand alone economy it would be the 7th largest (or 8th depending on sources) in the world. Enough to be viewed as a barometer. Just as an aside, Los Angeles itself, is ranked the fourth largest economy in the United States compared to other states.

The numbers of Realtors (US term for Real Estate Agent) in the State of California was 1 in 50 adults in the state. (was 1 in 52)

Gold RushAnalogies were drawn, that the gold rush philosophy that populated the state in its early days must still be continuing to this day.

To place this ludicrous number in perspective it would mean that in the Nelson / Tasman region, to be equivalent we would have 1700 “agents”, whereas in reality we have just a few hundred.

Goodness knows how it would equate to a city like Auckland?

….continues in Part II tomorrow..

The REAL WORLD in a Cartogram – WorldMapper

Cartograms are designed to challenge the way we view the world.

World Housing PricesHousing prices -The size of each territory shows the total value of all housing, adjusted for local purchasing power.

Western Europe contains the most expensive housing, while Africa and South Asia has the cheapest, even after allowing for the fact that money goes further here.

I think the standouts are Japan, the UK, Germany and parts of Europe. No wonder they have 100 / 150 Year mortgages in Japan.

Would be interesting to view a late 2008 model?

From Worldmapper …..

This map shows the price of the housing stock of a territory, in purchasing power parity. This means that prices shown take into account the variation in what can be bought for US$1 in different territories. The most expensive housing per person in the world is in Europe, where a home is now usually no longer just somewhere to live, but is also an investment.The cheapest housing stock is found in the African regions and Southern Asia, despite taking into account that money goes further in these territories.

Even with the higher costs of housing in richer territories, the average household is smaller in these places.

The one above hails from a few years back. High Res version here. It looks like this is an updated one here from a new 2008 book. There are other housing related cartograms here.

I think the standouts are Japan, the UK, Germany and parts of Europe. No wonder they have 100 / 150 Year mortgages in Japan.

Would be interesting to view a late 2008 model?

(The Atlas of the Real World: Mapping the Way We Live by Daniel Dorling, Mark Newman and Anna Barford)