From an interesting article that Eric Janszen wrote for Harpers:
Because all asset hyperinflations revert to the mean, we can expect housing prices to decline roughly 38 percent from their peak as they return to something closer to the historical rate of monetary inflation. If the rate of decline stabilizes at between 6 and 7 percent each year, the correction has about six years to go before things stabilize, leaving the FIRE economy in need of $12 trillion.
[Emphasis mine]. He was talking about the US and I can’t see why Ireland will be any different – obviously the total â‚¬ amount to pull our FIRE economy will be different but ‘de fundamentals’ are just not sound any more. His suggestion that alternate energy research could be the next big(ger) bubble seems to ring through, necessity is the mother of invention and invention these days is an expensive business.
(Wired also have an interesting interview with Janszen)
dollar, economy, housing, ireland, us
The arrival of the inevitable Irish housing market slump/slowdown has coincided with a massive global credit crunch caused by a “sub-prime mortgage crisis” in the US. There’s been lots written in the Irish press about the credit crunch and the effects on the domestic housing market but understanding why the crisis developed in the first place is best explained by this eye-opening BBC article. One amazing nugget in this article relates to the collapse of the housing market Cleveland. The graphs are amazing but the mere fact that “Deutsche Bank Trust, acting on behalf of bondholders, was the largest property owner in the city.” is amazing.
I wonder will the guys at DaftWatch or The Property Pin start doing heat maps of repossessions in Ireland.
housing, irish, sub-prime