In the UK, you can calculate what price your home would be worth, based on what type of Home you have, where you live (London, Wales, Yorkshire, etc.), and the final variable — what year your Home’s valuation returns to:
Via FT’s Alphaville
House Price Crash Calculator
April 15, 2008 2:30pm by Barry Ritholtz
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The bottom line is that your house is only worth what someone else will pay you for it.
Along similar lines, Dean Baker’s CEPR posted an interesting calculator for figuring ownership costs vs. renting costs in the current market environment. It’s fun to play with. URL:
http://www.cepr.net/calculators/calc_housing.html
A similar calculator (the above link not withstanding) would be useful for the States.
I think you hit the nail on the head when you said it “fun it play around with”. These calculators are based on average figures. If you go back to the late 80s and early ’90s in the UK, as house prices tumbled in most ares, some areas saw very marginal declines and one or two even grew. It’s a bit like a stock market index….yes it gives you a good indication on market growth and strength but it doesn’t tell you much about sector or stock level prices….for that you’ve to go closer to the bone.
Prime example – London prices grew 1.1% (on average) last month. Not all houses / areas grew though.
Finally, decent mortgage rates are still possible to find in the UK provided you have 25% + deposit. Certainly there is less products and competition to 8 months ago, but it’s the 90% – 100% LBV guys that are in trouble.
I normally love this site. However, I think you are missing a key point about GE and GE capital. This is based on actual comments from former VP. All your comments are true with the exception of the size of GE Capital. IT was actually always a stressful situation inside the company. If it got too big, it would have resulted in teh reevaluation of the company to a financial instituition. Read lower valuation!!! hence it was always managed around 49%, and the industrial conglomerate moniker was made to stick. This makes me the only one who says it may actually still be valued too high..