Comments on: How many Irish homes are in negative equity? http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/ Irish Economy | World Economy | Property Market | Economic Analysis | Ronan Lyons Thu, 11 Mar 2010 12:19:32 +0000 http://wordpress.org/?v=2.8.4 hourly 1 By: AJ Bowe http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-1198 AJ Bowe Mon, 16 Nov 2009 15:44:52 +0000 http://ronanlyons.wordpress.com/?p=333#comment-1198 Yes, this is a terrible issue for the individuals involved. But it is also an issue for the wider economy with reduced consumption, lower incentive in invest in real-estate, poor labour force mobility, and increased provisions/potential losses for the financial industry. See Reset 2010 for a presentation on this. Yes, this is a terrible issue for the individuals involved. But it is also an issue for the wider economy with reduced consumption, lower incentive in invest in real-estate, poor labour force mobility, and increased provisions/potential losses for the financial industry.

See Reset 2010 for a presentation on this.

]]> By: Negative equity, the property market and unemployment in Ireland | Ronan Lyons http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-337 Negative equity, the property market and unemployment in Ireland | Ronan Lyons Wed, 03 Jun 2009 09:43:51 +0000 http://ronanlyons.wordpress.com/?p=333#comment-337 [...] worth less than what their current owners paid for them. A month ago, I estimated that as many as 725,000 properties in Ireland are worth less than their last purchase. Of Ireland’s 1.7m households, just over one third (or about 600,000) are owner occupiers [...] [...] worth less than what their current owners paid for them. A month ago, I estimated that as many as 725,000 properties in Ireland are worth less than their last purchase. Of Ireland’s 1.7m households, just over one third (or about 600,000) are owner occupiers [...]

]]> By: Five years, six property markets, mixed fortunes « Ronan Lyons | Blog http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-269 Five years, six property markets, mixed fortunes « Ronan Lyons | Blog Wed, 20 May 2009 17:23:47 +0000 http://ronanlyons.wordpress.com/?p=333#comment-269 [...] How many Irish homes are in negative equity? [...] [...] How many Irish homes are in negative equity? [...]

]]> By: How many mortgage-holders are faced with unemployment? « Ronan Lyons | Blog http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-261 How many mortgage-holders are faced with unemployment? « Ronan Lyons | Blog Mon, 18 May 2009 08:03:33 +0000 http://ronanlyons.wordpress.com/?p=333#comment-261 [...] How many Irish homes are in negative equity? [...] [...] How many Irish homes are in negative equity? [...]

]]> By: Where in Ireland has seen the biggest increase in unemployment? « Ronan Lyons | Blog http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-274 Where in Ireland has seen the biggest increase in unemployment? « Ronan Lyons | Blog Mon, 11 May 2009 11:03:26 +0000 http://ronanlyons.wordpress.com/?p=333#comment-274 [...] How many Irish homes are in negative equity? [...] [...] How many Irish homes are in negative equity? [...]

]]> By: Homes4sale-orlando http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-273 Homes4sale-orlando Fri, 08 May 2009 01:35:20 +0000 http://ronanlyons.wordpress.com/?p=333#comment-273 Nice Blog! How many american homes are in Negative Equity? Nice Blog! How many american homes are in Negative Equity?

]]> By: NAMA’s Free Lunch for Shareholders « The Free Marketeer http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-272 NAMA’s Free Lunch for Shareholders « The Free Marketeer Mon, 04 May 2009 14:53:33 +0000 http://ronanlyons.wordpress.com/?p=333#comment-272 [...] would also insulate the banking system from further shocks. For example, Ronan Lyons notes the increasing level of negative equity amongst Irish home-owners. If optimistic forecasts [...] [...] would also insulate the banking system from further shocks. For example, Ronan Lyons notes the increasing level of negative equity amongst Irish home-owners. If optimistic forecasts [...]

]]> By: Stephen Kinsella http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-271 Stephen Kinsella Mon, 04 May 2009 14:29:28 +0000 http://ronanlyons.wordpress.com/?p=333#comment-271 Another great post Ronan, but I guess it's a moot point as there isn't enough liquidity in the system to actually affect a series of purchases of more or less similar houses to test the hypothesis. Let's say 100% of Irish houses bought since 2005 were in NE, because of a combination of aggressive financing and current market conditions. I can't actually get a sense of how much negative equity in the system, because no one is buying those houses right now. Even if the (very) few houses sold in the market are actually experiencing NE, the only way to test that might be to look at refinancing options put forward by banks for the rest of the mortgage the hapless house seller now has to stump up for. That's the worst situation to be in: no asset and a new loan to repay, with no stream of benefits forthcoming. So the NE level actually constitutes a lower bound on reservation prices for the house. Or am I off my meds? Another great post Ronan, but I guess it’s a moot point as there isn’t enough liquidity in the system to actually affect a series of purchases of more or less similar houses to test the hypothesis. Let’s say 100% of Irish houses bought since 2005 were in NE, because of a combination of aggressive financing and current market conditions. I can’t actually get a sense of how much negative equity in the system, because no one is buying those houses right now. Even if the (very) few houses sold in the market are actually experiencing NE, the only way to test that might be to look at refinancing options put forward by banks for the rest of the mortgage the hapless house seller now has to stump up for. That’s the worst situation to be in: no asset and a new loan to repay, with no stream of benefits forthcoming. So the NE level actually constitutes a lower bound on reservation prices for the house. Or am I off my meds?

]]> By: ronanlyons http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-267 ronanlyons Fri, 01 May 2009 20:41:36 +0000 http://ronanlyons.wordpress.com/?p=333#comment-267 Hi Gerard, Good solution! I'm also very happy that the two entirely separate ways of estimating something come back with answers in the same ball-park. Indeed, if 20% is the upper bound, and perhaps one in five has bought again since 2004, then that takes it down very close to the 15%. Thanks for pointing out that study - it's amazing how short my memory has become! R Hi Gerard,
Good solution! I’m also very happy that the two entirely separate ways of estimating something come back with answers in the same ball-park. Indeed, if 20% is the upper bound, and perhaps one in five has bought again since 2004, then that takes it down very close to the 15%.
Thanks for pointing out that study – it’s amazing how short my memory has become!
R

]]> By: Gerard O'Neill http://www.ronanlyons.com/2009/05/01/how-many-irish-homes-are-in-negative-equity/comment-page-1/#comment-266 Gerard O'Neill Fri, 01 May 2009 17:58:19 +0000 http://ronanlyons.wordpress.com/?p=333#comment-266 One way to clarify your clarification is to ask those with mortgages if they face negative equity. In a survey my own company did in February, 15% of those with mortgages thought their homes would be worth less than they paid for them (see slide 26 in this post on my company's blog: http://amarachresearch.blogspot.com/2009/03/debt-of-nation.html) Sounds about right don't you think? One way to clarify your clarification is to ask those with mortgages if they face negative equity.

In a survey my own company did in February, 15% of those with mortgages thought their homes would be worth less than they paid for them (see slide 26 in this post on my company’s blog: http://amarachresearch.blogspot.com/2009/03/debt-of-nation.html)

Sounds about right don’t you think?

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