How much should we worry about a house price crash?

WORRY BIG-TIME. Not only is the aggregate global housing market subject to boom/bust cycles as a baked in feature…watch what happens when the property values tank and the ordinary people suddenly have upside down mortgage notes…adding to the purposely orchestrated destablization of everything we once knew as “material conditions of everyday life”..

No loan modification without taking on wind/solar/dildo alternative energy renovations.

No loan modification without clean Antisemitism score.

No loan modification for a racism done ever.

No loan modification if you ARE WHITE.

Plain-speaking Economics

One question that economists dread at parties is ‘what is going to happen to house prices?’. The sensible answer is ‘I don’t know and I can’t give you investment advice anyway’. But for what it is worth, here are my two hunches.

The first is that UK house prices are likely to fall further and more quickly in 2023 than most expect. The second, though, is that this will not harm the economy anywhere near as much as many fear.

Looking back, 2022 was the cliched ‘year of two halves’ for the housing market. The first half was buoyant. House prices rose sharply as the economy opened up again, many people reassessed their property needs (especially those now ‘working from home’), and borrowing remained cheap.

The market then began to slow in the second half of the year, as the cost-of-living crisis worsened, recession worries grew, and mortgage rates took…

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