Prices Country Properties and Real Estate Costa del Sol Andalucia 2009
08-01-2009
How deep are we going with Country Property prices in Andalucia, Costa del Sol? Villas & Fincas selected an interesting article.
Recent scientific research puts us in a perspective what happened during a banking crisis to the unemployment, governmentdepth, real estate prices, etc. This type of data gives us good guidelines which we must take into account. The average decline of Real Estate registered 35.5 percent over a downturn of six years: See statistics below.
Article written by Catherine Rampell from The New York Times
If history is any guide, the current banking crisis is nowhere near a bottom.
Carmen M. Reinhart, an economist at the University of Maryland, and Kenneth S. Rogoff, a former chief economist at the International Monetary Fund who now teaches at Harvard, have gathered an impressive number of facts and figures on previous financial crises near and far. And in a paper presented at last weekend’s American Economic Association conference, they showed that rich and developing countries have much in common when it comes to banking crises; both developed and emerging market economies tend to experience similarly painful patterns in housing and stock prices, unemployment, government revenues and debt.
Unfortunately, these historical trends suggest that the current crisis may continue to worsen for a while, despite some economists’ sunny predictions.
Want some examples?
*Unemployment rate. Since its recent low of 4.4 percent in March 2007, the unemployment rate has risen to 6.7 percent, or an increase of 2.3 percentage points. Compare this to previous financial crises, where the unemployment rate rose an average of 7 percentage points over 4.8 years:
Source: Carmen M. Reinhart and Kenneth S. Rogoff, “The Aftermath of Financial Crises.” Notes from the paper: “Each banking crisis episode is identified by country and the beginning year of the crisis. Only major (systemic) banking crises episodes are included, subject to data limitations. The historical average reported does not include ongoing crises episodes.” *Housing prices. To date, the authors report, United States housing prices have fallen almost 28 percent since their peak. That’s twice as far as they fell during the Great Depression, but still shy of the average price decline from other historical banking crises. The average decline registered 35.5 percent over a downturn of six years:
Source: Carmen M. Reinhart and Kenneth S. Rogoff, “The Aftermath of Financial Crises.” Notes from the paper: “Each banking crisis episode is identified by country and the beginning year of the crisis. Only major (systemic) banking crises episodes are included, subject to data limitations. The historical average reported does not include ongoing crises episodes. Consumer price indices are used to deflate nominal house prices.”*National debt. By the official statistics, America’s public debt has increased by 16.8 percent since July 31, 2007, after adjusting for inflation. (While the recession officially began in December 2007, Professor Reinhart dates the beginning of the United States financial crisis to July or August 2007.) Historically, in the three years following a banking crisis, the inflation-adjusted public debt rose 86 percent: Read more…
