House prices in USA have fallen faster but also recovered faster

The market crash in 2006-2007 resulted in the dramatic falls in property prices among many industrialised nations, but as the graph below illustrates, prices in the USA have both fallen further and stabilised for longer than other major nations.

Property needs to be considered above all at micro levels - you need to know the individual neighborhoods very well. However some important nationwide trends include:

• -  The ratio of house prices to rents is now well below its pre bubble level
• -  Vacancies are at a three year low
• -  Analysts expect rents to rise by 4% this year and next (The Economist)
• -  New foreclosures were 18% lower in Q1 2011 than Q1 2010
• -  The US economy added 600,000 new jobs between Feb-April and 1.3m new jobs in past 12 months. That is the rough equivalent of the UK adding 120,000 new jobs in 3 months.
• -  In Q1 2011, for the first time in 4 years, more mortgage borrowers caught up with their payments than fell further behind.

What are your thoughts?

I´m very interested in your thoughts on the issues and trends discussed in this blog post.  Do you agree or disagree with my take on the current market?

Regards

Colin Murphy, Torcana