Sunday, February 17, 2008

Norway: "We're special"

OK, who doesn’t get what’s happening here? Residential and commercial construction has broken records in Norway in the past few years. The population however is still hovering at around 4.5 million. How could there possibly be a housing shortage with all those new units and no appreciable increase in population?

There, I said the ‘S’ word…

I know from a source in the real estate industry there that many R/E agents have bought up numerous condo units themselves expecting to get rich, many of which are held vacant.
This source did some speculating himself, in what was going to happen to the property speculators. In 2006 he predicted mass auctions of new condo units within a year or two as the modern day prospectors get caught in the down-draft that was sure to come, and here it is.

What Norway is currently seeing is the denial phase of their unwinding, with sellers still thinking that if they hold on long enough their investments will turn and again look profitable.
To them I say, ‘SNAP OUT OF IT’, drop your price; observe the first rule of panic: Panic before everyone else does.

Will it happen? No… Norwegians are special, much smarter than Americans. Americans are fat and stupid. America became a superpower because France told us we could be, and now America is getting what is most assuredly deserves, a vicious economic recession, an historical destruction of wealth and the pain and suffering that comes with it. Norwegians are giddy with delight to see their assertions proved out and inferior Americans get what they finally deserve.

To them I say, ’keep an eye on your stock market. As American stocks get pounded due to sub-prime losses so will yours’.
Will they listen? No…

We saw rents rise in US cities late 2006 for reasons similar to what is taking place now in Norway. Look what is taking place in the US market now - rapidly decreasing rents as a flood of units hits the rental market and speculators throw in the towel and try to stay afloat or banks dump properties cheap and the new owners rent them out, or try to.

Norway’s housing market has turned, it did so a year ago and the choking sounds are working their way from the outlying areas to the metro areas as sellers gag on the reality of few buyers. Oslo will follow the same track as US cities did a year ago. What a golden opportunity to learn and take action. What a waste that it will go unheeded…
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