Housing Crisis in USA

[HateGauteng]

This article gives a decent clue as to the extent of the housing crisis in the US. Wonder when SA is going to wake up and realise that its in the same boat. http://www.marketwatch.com/story/housing-isnt-even-close-to-stabilizing-2010-09-22

[richardw]

I doubt we're as bad. They have a huge demographic problem and are losing their competitive edge, whereas we have a seriously growing black middle class and in large part have more opportunities for improvement. In 10 years, we'll very likely have more housing growth than the U.S. That'll support prices.

[warhippo]

Interesting to know that in the USA you can just walk away from your bond and hand the keys to the Banker. What the bank get from the sale of the house is theirs - the loss as well! In RSA you can do the same, however outstanding amounts on bonds after being sold by the banks remain your debt to them. I just sometimes wonder how many times banks in RSA avoid repossesing a house, partly not to become a home owner and partly not to keep the non payer on their books - rather work out a new deal? - or is this not the case?

[HateGauteng]

If you read the comments about the article. People arn't just handing the keys in. They stop paying the morgage and just live on for free. Banks are reluctant to take on properties which they might struggle to sell so drag their heels over foreclosures. Another dimension is that houses in the US are made of glorified dry wall, so there's a limit on the shelf life of the house. Unlike the brick and block houses of SA which might have a lifespan of 100 years, houses in the US get dodgy after 10.

[HateGauteng]

It was US housing sentiment that was imported into SA that caused the bubble not local conditions. Been hearing the beliefs about black emerging middle class and housing for a while now. It hasn't emerged and it won't unless there is massive global economic growth. The good part is that SA houses have a longer shelf life than US houses, so buy and hold (for the next few decades) might work.

[striker]

Yeah - they got crumby houses - blow away in high winds !

[richardw]

It has emerged. Where do you think all the guys driving BMW's live? Visit any housing complex and you'll see a good percentage of people who didn't live there 15 years ago. Millions upon millions of people, added to the demand for houses.

[HateGauteng]

The houses (not complexes) in the larny parts of PTA, JHB, Durbs, CT are still largely the same as they were 15 years ago.

[HateGauteng]

Don't get fooled by them BMWs. They pretty easy to get if there's a travel allowance involved. Speaking from experience coz I had all of that (prefer 4x4s to BMs though). Houses are more difficult to buy than cars. When I went to the banks for house loans, there wasn't much success but they funded those expensive cars much faster.

[Bug]

What do you suppose is the life span of the average low-cost RDP housing unit erected in SA?

[HateGauteng]

RDP houses not exactly investment class. Wonder if banks accept RDP houses as collateral??