Is the housing crisis over?

Well maybe in America.

The infamous US housing crisis which spilled over into worldwide markets and was a major cause of the 2008 global financial crisis seems to finally be over. In the US at least.

Residential real estate prices released by S&P/Case Shiller this past week show that the US residential market has begun to recover after 5 years of negative growth.

The results show that in the 12 months to February 2013, US house prices rose by 9.3 per cent.

This index is based off the property values in 20 major cities. The largest gainers were Phoenix with 23 per cent growth, followed by San Francisco (19 per cent growth) and Las Vegas (18 per cent growth).

The two largest US cities, Los Angeles and New York, also both recorded price growth over the 12 month period. Los Angeles registered strong growth of 14 per cent, while New York recorded more moderate growth of 1.9 per cent.

Compared to peak levels

Despite this recent growth, home prices nationwide are still 29 per cent below their peak reached at the height of the housing bubble in July 2006. They are only back to where they were in the fall of 2003.

Some cities such as Dallas and Denver are almost back to where they were in July 2006. They are both within 5 per cent of peak levels. However, the likes of Los Angeles and New York are both over 25 per cent below peak levels.

Background to US housing crisis

Timeline

  • Prior to 1996 only wealthier people were able to get sub-prime mortgages. All this changed in 1996, when the US housing department set a goal for Fannie Mae and Freddie Mac that at least 42 per cent of the mortgages they purchase be issued to borrowers whose household income was below the median in their area.
  • This target was then increased to 50 per cent in 2000 and 52 per cent in 2005. This led to increased sub-prime lending, particularly to lower income groups.
  • During 2001, US interest rates were decreased from 6.0 per cent to less than 2.0 per cent in order to fuel consumer spending. Rates were then kept at this low level until 2005.

The points above fuelled increased mortgage lending and speculation which caused US house prices to increase by 57 per cent over the period between 2000 and 2006. Rates were then put up to just over 5.0 per cent in 2006 as the Fed suspected a property bubble was developing.

The US property market then began to contract in 2007, with house prices falling by 9.0 per cent during the year. A larger decline occurred a year later, in 2008, when US house prices fell by 18.6 per cent. This led to widespread panic in the market and a large number of home owners defaulted, resulting in a run on a number of investment banks that had bought and sold large volumes of ‘toxic debt’ instruments related to mortgages including credit default swaps.

The five largest US investment banks (with combined debts of US$4 trn) either went bankrupt (Lehman Brothers), were taken over by other companies (Bear Stearns and Merrill Lynch) or were bailed out by the US government (Goldman Sachs and Morgan Stanley) during 2008.

The US property market continued to decline in 2009 but by a more moderate 3.1 per cent. This was followed by a decline of 2.4 per cent in 2010 and a 4.1 per cent decline in 2011.

Recovery Begins

In 2012, US housing prices recovered by 6.9 per cent and by 9.0 per cent  in the 12 months to February 2013.

According to London based wealth consultancy, WealthInsight: “this increase bodes well for the future. However, confidence in the asset class has been heavily eroded and it will take more time to restore investor confidence”.

Andrew Amoils is a writer for WealthInsight

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The internet was supposed to liberate us - let’s claim our freedom

This week the Women's Equality Party launches an e-Quality campaign against online bullying and harassment in all of its forms.

Yesterday – a sunny, energetic day in our office - someone appeared on our website, wrote that he would like to “rape all the sluts” in the Women’s Equality Party, and signed off again.

Our team of female staff read his comment, deleted it and continued working.

If we paused at every message like this, we’d never get any work done. Facing up to daily abuse might not have been formally included in my job description – or in that of our administrative officer, or our digital officer, or any other member of WE staff. But it has swiftly become part of our daily duty, nevertheless.

The abuse has heightened as our party grows. Wearying perhaps, but also a reflection of the space we now occupy on the political scene. After the fantastic results of our first election in May – when the Women’s Equality Party won more than 300,000 votes in London alone – WE provoked as much rage in some quarters as jubilation in others.

Since May we have been pressed to say what we will do next. All of those questions focused on which election we would next fight.

Our next move in fact was to prepare our submission for the Women and Equalities Select Committee inquiry into sexual harassment and sexual violence in schools. Evidence submitted to that inquiry showed the torrent of sexual abuse that young girls now face in school, including pressure to take and send sexual images that are sometimes shared widely without their consent.

Women’s rights offline have a long way to go. Women’s rights online are practically non-existent, and worse, there is an even more ingrained acceptance that this is just the way it is.

So this week WE launch our next fight for women’s rights: our e-Quality campaign against online bullying and harassment in all of its forms. We’re focusing on revenge porn because if we can get that faulty and ineffective one-year-old law rightly focused on consent and compensation, we can set a template for wider use.

Later this year we will be rolling out a national campaign for mandatory sex and relationships education in all schools; we refuse to accept the government’s opposition to this vital tool that can help end violence against women and girls.

No, it’s not the Tooting by-election that many people expected us to contest. But politics doesn’t just happen in Parliament. It happens in our communities and in our homes and in our schools.

And we want to do politics differently. We will always be looking to engage in electoral contests. But we are also looking for other ways to empower people to take action and build the broadest possible movements for change.

So with this in mind we are calling on all parties of all sizes to work on this with us - and we are optimistic as we initiate those conversations they will bear fruit.

Later this week Yvette Cooper and a group of politicians will re-launch their campaign to reclaim the Internet for women. WE are delighted to hear this and extend to them for inclusion in that campaign the specific policies that today we are unveiling:

  • To refocus UK law on revenge porn on whether the victim gave consent, rather than primarily on the perpetrator’s intention to cause distress
  • To give victims of revenge porn recourse to civil law in order to seek justice and compensation not just from the perpetrator but also from the website operators that repost non-consensual porn for profit
  • To construct digital legislation that adequately protects against online abuse and harassment in all its forms and particularly recognizes the double discrimination faced by BME women, disabled women and LGBT+ women.
  • To build equality into technology and the forces that police it by increasing the numbers of women in both fields.

The Women’s Equality Party was established with the aim of doing politics creatively. WE showed in May’s elections that we have earned the right to be heard. Now WE are asking all of the other parties to listen to our voters, set party politics aside and ensure urgently-needed protections for women and girls online.

You can read more about the campaign here. To support equal rights for women online, tweet your support with the hashtag #CtrlAltDelete so that women’s voices are no longer controlled, modified and deleted online.

Sophie Walker is leader of the Women's Equality Party.