Someone want to buy a house in Spain?

Can you stimulate an economy with a printing press?
Japan is trying it for almost 19 years now, so the answer is obviously: ‘no’.
Printing money is issuing debt. And printing more debt cannot reverse a debt bubble until market forces have run their course.
The trend for this very moment is deflationary. And almost all asset classes are down, because the economy is readjusting.
Not only in the States, but everywhere.

From Reuters:

MADRID, June 16 (Reuters) - The number of houses sold in Spain fell by 47.6 percent in April compared to a year earlier, marking the largest percentage fall in 16-straight months of decline, the National Statistics Institute said on Tuesday.The fall in April sales to 29,217 units compared with a decline of 24.3 percent in March versus the same month of 2008, which had been the smallest fall in 11 months.


Moody’s downgraded 25 Spanish banks last Friday.
The unemployment rate in Spain is now 17.4% and is expected to go higher. The non-performing loan rate is still going higher: from 3.3% in December 2008 to 4.27% at the end of March 2009.

The Ronaldo effect?

Now what about this ad, back in the UK:

DON’T MISS OUT ON THE OPPORTUNITY OF A LIFETIME

UK house builder Taylor Woodrow de España, the only major UK house builder in Spain, discusses why the time is now right to purchase a home in Spain as the current climate makes purchasing the home of your dreams possible.
Victor Sague, Marketing Director of Taylor Woodrow de España comments: “For many months consumer confidence in the property market has been dented and quite frankly who can blame house hunters becoming subdued when it comes to making possibly the biggest investment of their lifetime.
However, at this moment in time we are currently seeing a number of people returning to the market, anxious not to miss out of some of the excellent deals that are currently available both at home and abroad.
Victor continues: “With the market looking brighter, this will of course add inflationary pressure onto house prices, the moment confidence returns. Indeed, house hunters that are unable to move quickly will know doubt miss out on the chance, of possibly their lifetime, to buy at the bottom of the market.

Indeed :-), plenty of houses over there now. We're not in a hurry

Sphere: Related Content

Housing is not getting any better...

12% of all American homeowners with a mortgage are behind on their payments or in foreclosure. Half of all adjustable-rate loans to borrowers with a weak credit record were past due or in foreclosure and we still have tons more option ARM mortgages which will switch to new rates in the coming months.
New home sales rise, but the Administration is revising the prior month substantially, hoping the market wouldn’t see it.
Why is homebuilder confidence climbing to an eight-month high?
With mortgage rates at pre-QE levels.
Rates are rushing higher, so it is clear that the FED will come out very soon with a QE v.2.

Consider this:
There are 80 million US houses.

53 million have mortgages.

27 million are paid off.

48 million are paying in time.

5 million are behind (9,5% of 53 million with 2.8% in foreclosure)

In the 1930's 50% were seriously delinquent.(Data: US Treasury, Milken Institute)

But also Europe is not going to escape. From John Mauldin:

The value of outstanding loans to Spanish developers has gone from just €33.5 billion in 2000 to €318 billion in 2008, a rise of 850% in 8 years. If you add in construction sector debts, the overall value of outstanding loans to developers and construction companies rises to €470 billion. That's almost 50% of Spanish GDP. Most of these loans will go bad.

"Spanish banks are now facing a very bleak outlook. Spain's unemployment rate reached over 17% last month; there are now four million unemployed Spaniards and over one million families with not a single person employed in the family. Spain and Ireland had the worst housing bubbles in the world and now Spain has as many unsold homes as the US, even though the US is about six times bigger.

"Why are Spanish banks not insolvent? Spanish banks are not marking their real estate loans to market. We've often wondered how it is that our thesis for Spanish real estate and industrial collapse has not created more victims. The answer is simple according to an article in Expansion, the Spanish equivalent of the Financial Times, from the 19th of April titled 'Spanish banks control half of all real estate appraisals.' You can't make this stuff up. We haven’t even begun to see the worst in Spain yet."

Sphere: Related Content