Tuesday, July 3, 2007

Norway: A housing crash can't happen here!

Norwegian housing prices keep on rising

Prices in June were up an average 14.2 percent over June of last year, according to figures released Monday by the Norwegian real estate brokers’ association (Norges Eiendomsmeglerforbund).

Norway's central bank raised interest rates yet again last month in the hopes of controlling inflation, cooling down the red-hot housing market and paring debt levels.

Bank officials had said earlier in June that personal debt in Norway was rising at an alarming rate, in large part because of the country's strong oil-driven economy.

Prices rose higher in June than expected, especially since some home sellers have reported lower traffic through their open house showings. Brokers also have reported that it's taking longer to sell properties, with several showings needed in some cases before an acceptable bid is offered.

The numbers suggest the market remains strong, not least since prices often dip in June. Single-family detached homes were up 16.3 percent from June of last year, attached multi-family dwellings (row houses) were up 14.1 percent and condominiums were up 13.8 percent.Prices have risen 386 percent since the real estate market bottomed out in 1992.

Norway has its’ own version of the NAR, (Norges Eiendomsmeglerforbund) and they seem to be reading from the same script as David Lareah, that is before he stepped down as head of the National Association of Realtors recently in disgrace.

Being that Norway’s housing market seems to follow the US by around a year I would say the party here is over.
See Norwegian housing bubble leaking air


It is telling that in May the reports were that sales were bleak and prices were poised to drop. Now they say both that prices are rising and houses aren’t selling.
David…Is that you?

It further states that prices often dip in June…?!?
Do people really swallow that dribble?
I live in Norway and I can tell you that the housing market dynamics work the same here as most places. May and June are the peak months.

It would appear that the familiar course of cheerleading a failing market is no different here than it was in the US only a year ago.

Further, Norwegian bank officials were worried that personal debt was rising at an alarming rate.
‘I’ve got to have it now’ consumerism is rampant here. What they don’t seem to see is Personal debt is a problem for every economy.
In the past this was exclusively an American disease. Welcome to the modern era.

Don’t get me wrong, Norwegians know what is happening in the US. But Americans are all fat and uneducated. Norwegians are smarter, the government is here to help and real estate values will never go down. Ask any Norwegian...

Vern

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