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July 16, 2005
U.S. Home Prices Not Like Japan's in 1980s
With U.S. housing prices staying strong in many parts of the country, some analysts are comparing the appreciation trend to similar growth in Japan in the late 1980s, when a property bubble formed and eventually burst. But most analysts aren't sure that's a good comparison.
More than 10 years after the Japanese slowdown, land prices are still on the decline; and banks have just recently begun to pull out of a land-related, bad-loans crisis.
Although both Japanese and U.S. property industry growth are tied to low interest rates, economists note that there are some significant differences between Japan's plight and the U.S. market, including that the real trouble overseas came from commercial-land speculation.
While speculation in the American market is beginning to pick up, analysts say, there has not been a major land-grab by corporations. Additionally, Japan's residential prices skyrocketed faster and higher than in the U.S.
Source: Wall Street Journal (07/11/05); Moffett, Sebastian
Article from Realtor.org.
Posted by QiRealtyEditor at July 16, 2005 09:23 AM