How’s this for a Headline….
…sales increased 96.7 percent; median home price fell 40.9 percent in September.
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.
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.
Analogies 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..