Property Barometer How Well do Home Values really hold up in tough times
Category Market News
How well do home values really hold up in tough economic times?
There exists a view that property values are capable of by-and-large “holding up” in tougher economic times, some even believing that home values “can only rise”. Such views were even arguably behind the massive mortgage lending boom across much of the world last decade.
These claims, or assumptions, around property values are often a little far fetched, and we believe that they stem, in part, from a misinterpretation of the most commonly used measures of home prices, namely house price indices. Home values fluctuate just like any other asset class would in response to changes in economic conditions, but a house price index is something different, not measuring all existing home values but, rather, transaction prices…..and there is a big difference.
Author: John Loos
