Matrix Blog

Posts Tagged ‘Europe’

3Q 06 Market Report From Paris, France Appartements de Charme et de Prestige

January 30, 2007 | 12:01 am |

[Karl- Heinz Schabmüller M.B.A., a real estate broker in Paris, France regularly writes articles and market reports about the city’s housing market based on market figures released by the Paris Notary Chamber. I have not met Mr. Schabmüller, but have traded emails since he is a fan of Matrix]

The recap of the current results and Mr. Schabmüller’s interpretation are found below:

Paris, France real estate market – 3rd quarter 2006

In its press conference of 17 January 2007, the Notary Chamber has released official data about the Paris real estate market during the 3rd quarter 2006.

  • The average square meter price in Paris now stands at 5 675 €/ USD 7,380.62

  • According to the report, the sale’s volume shrank by 3.3% in comparison to the 3rd quarter 2005. Altogether 9,888 old and unoccupied apartments were sold in the city, the average square meter price increased by 9.9% and stands at 5 675 €/ USD 7,380.62.

  • Once again, the 6th arrondissement (Saint Germain- des- Prés) in the very heart of the city remains the most expensive (8 527€/m² – USD/ m² 11,089.8). It is now followed by the 4th (southern Marais and the “Saint Louis island” – 7 708 €/m² – USD/m² 10,024.6) and the 7th (“Eiffel tower”, “Invalides”,”musée d’Orsay” – 7 633 €/m² – USD/ m² 9,927.10). The least expensive are the 19th arrondissement (4 498 €/m² – USD/m² 5849.87) and the 20th (4 720€/m² – USD/m² 6,138.60), which are both located in the north- east of the city.

  • Apart from the notary’s official data, however, I want to point out that square meter prices for a property in fairly good quality in the centre range between 7,000€/ USD 9,103.85 and 10,000€/ USD 13,005.5, prestigious real estate is higher.
    (exchange rate amounts are not guaranteed)

I assume that his 2006 recap on Paris real estate market will be available in April 2007.

Paris Market 2005 recap
KHS Paris Real Estate website
KHS Paris Real Estate blog


Carnival Of Real Estate [Week of September 5, 2006]

September 5, 2006 | 10:06 am | Public |

[Matrix is hosting the Carnival of Real Estate the week of September 25, 2006. Its a great way to read some great posts on real estate topics of the day and not get sick on cotton candy.]

What is a carnival?

Here’s a great carnival Q & A. Its basically a a bunch of blogs that take turns displaying the favorite posts of the group each week. Carnivals can vary by topics and of course and the most relevant to Matrix readers is the Carnival of Real Estate.

This week’s host: NuBricks is able to bark out the best posts submitted by carnival members all the way from Europe.

Next week’s host: Real Estate Tomato who will determine once and for all whether tomatoes are to be considered a fruit or a vegetable as well as select the best posts for the carnival.

Carnival of Real Estate

Tags: ,

Measuring GDH (Gross Domestic Happiness), By Way Of Housing

June 16, 2006 | 12:01 am | | Columns |

[Economists have been trying to quantify happiness](Truck and Barter]( or well-being in numerical terms for years.

The housing wealth effect has been one of the more important linkages between the housing market and consumer patterns in the current economy.

Can we infer that the more propserous a household is, the happier it is? (I can imagine a huge swath of the population shaking their heads “NO!” to that comment.) I do a lot of real estate consulting in divorce cases and I KNOW this to be a false statement.

So lets back up. Rather than prosperity, lets say we associate well-being on national basis with GDP and see if that ties into housing.

Gross Domestic Product (GDP) deals with output and the wealth effect deals with consumption.

The OECD report showed there is a correlation between GDP and leisure time [OECD]. They looked at a large array of countries and interviewed residents about their happiness and charted it against their nation’s GDP.

Work may drive growth, but for most people, more free time contributes to well-being, as long as it is not accompanied by lower income. Still, one often-heard remark about the gap in economic performance between OECD countries is that US workers may earn more money but they work longer hours, whereas Europeans prefer more leisure to more work, or indeed, more money, and so are better off.

To more accurately measure happiness using GDP, the OECD report [Yale Economic Review] compares multiple alternative measures of happiness:

  • “national accounts indicators,” such as net national income, more accurately reflect economic resources because they correct for transfer payments and other market factors.

  • “extended monetary measures,” integrates non-market factors such as leisure time into traditional monetary statistics.

  • neglected social influences which affect happiness and yet cannot be easily reflected in economic statistics. They separate social indicators into four rough categories: self-sufficiency, equity, health, and social cohesion, and identify proxies such as average years of schooling and infant mortality to help quantify the indicators and find that most correlate well with output data.

The authors conclude in their study that GDP, while flawed can be a pretty good indicator of happiness on a country-wide basis.

At the same time, GDP can be correlated with new home sales. I correlated GDP with the New York housing market to the same effect.

Therefore, since housing can correlate with GDP and GDP correlates to well-being (happiness), can we infer that (how we feel about our) housing, affects our happiness?

Sure its a stretch, just like an adjustable rate mortgage thats about to reset.

Tags: , , ,

The Fed Observes The Europeans: What To Do With Housing?

March 1, 2006 | 12:01 am | |

With Bernanke’s stewarship of the Fed underway, I have wondered if the Temple was paying short shrift to the impact of the weakening housing market on economy. Comments made by Bernanke seemed to indicate that housing was doing just fine. Everyone knows (who follows the real estate market) that a change has occured as evidenced by the fourth successive monthly decline in new housing sales [BW].

In the article Fed Finds Overseas That Even Steady Home Prices May Hurt Growth [Bloomberg] the red-hot U.S. housing market showing signs of coming off the boil, Fed officials are again looking abroad for hints on what lies ahead for the U.S. This time the focus is on Australia, the U.K. and the Netherlands, where home-price advances peaked after housing booms that had significantly spurred economic growth.

The lessons learned?

  • A bust doesn’t always follow a boom.

  • Prices that are not rising – they can stay flat or decline – can have a significant negative economic impact.

What patterns were seen? Within a year and a half after markets peaked in the Netherlands, Australia and Britain, prices in all three had stagnated, hitting homebuilding, consumer confidence and spending.

  • Britain – prices rose 20% in 2004 and have remained flat since.

  • Australian – prices peaked in 2003 and have remained flat since.

  • Netherlands – prices peaked in 2000 and have remained flat since.

Economic growth in these countries was about half within a year after the housing markets cooled.

Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York, says the Fed might have to take similar action. He forecasts U.S. economic growth will slow to 2.6 percent next year from 3.4 percent this year. The Fed, he says, will stop raising its target rate when it gets to 5 percent and will lower it a full percentage point next year to cushion the economy from the fallout of the housing slowdown.

If his theory sounds vaguely familiar…
A Weakening Economy (If It Is), Has The Makings Of A Refi Boom In 2007 (If It Does) [Matrix]

Tags: , ,

Thomas Jefferson: The Founding Father Of Sprawl?

February 23, 2006 | 12:26 am |

In this Planetizen post the author Leonardo Vazquez postulates:

He told James Madison: “I think our governments will remain virtuous for many centuries as long as they are chiefly agricultural; and this will be as long as there shall be vacant lands in any part of America. When they get plied upon one another in large cities, as in Europe, they will become corrupt as in Europe.”

As a writer, philosopher and leader, Jefferson was able to hard-wire an anti-urban bias into the culture of the United States. Consider the U.S. Constitution. What power does it give to cities and towns? None, nada, zip. In fact, the Constitution doesn’t even mention cities and towns. It does give a lot of power to states. And states get more power — through representatives — by increasing their population.

It’s a formula for urban sprawl and weak cities. States need to grow to get more representatives and more political power. State politicians could try getting more people into urban areas by encouraging compact development. But that would risk giving more electoral power to cities, which Jefferson and his friends and followers (the “Jeffersonians”) thought were corrupt. The result? Encourage people to scatter on large plots of land — of course after removing the Native Americans who happened to be living there at the time.

Its a good article. We have had recent posts on sprawl and new urbanism (bringing town centers to suburban areas). Here’s a good resource that covers sprawl [National Geographic].

Sprawled In The Suburbs, There Is Hope For The New-Urbanist [Matrix]
Creative Brain Drain Weakens Long Term Urban Revitalization [Matrix]
Development Is Goin’ Down…town [Matrix]


Globally Speaking, New York City Is A Cheap Place To Live

February 2, 2006 | 12:24 am |

Oslo beats out Tokyo as priciest city: New York, the priciest American city, fell to No. 27 on world list [CNN/Money].

Are they kidding me? New York is 27th on the list and yet its the priciest American city? I guess I am not unlike many here who see New York City, as former Mayor Guiliani dubbed, the Capital of the World, so I assumed we’d be at least top ten. Has anyone tried to rent a 2-bedroom apartment here lately?

Actually last year, New York was 23rd on the list so its become relative cheaper to live here.

European cities dominated the top ten.

“For the first time in nearly a generation, Tokyo no longer ranks as the world’s most expensive city, according to a survey released Tuesday by the Economist Group.”

“The biannual survey, which covers 130 countries, found Oslo, Norway as No. 1 in terms of cost of living. Tokyo fell to No. 2. “


Should We Stay Or Should We Go (To The Suburbs)?

September 14, 2005 | 9:35 pm |

Housing patterns have changed over the past 5 years as the housing boom has spread outward from many metropolitan areas. In the US, unlike the UK and other European countries, the workforce is much more adaptable to changes in employment opportunities.

On a macro level, as employment opportunities show greater strength in one region over another, we usually see a gradual shift in population to those areas. On a micro or local level, commuters have been willing to lengthen their travel time in search of housing that matches their income levels. This is encouraged by the expectation of future price growth, one of the key consumer components of the current boom.

Two patterns have emerged:

I did my own informal study in 1990 when my family and I were looking for housing in the Westchester and Fairfield Counties (long considered commuter suburbs for New York City). I found that the average price of housing at that time decreased about $100,000 for each 10 minutes past the first express stop as you move away from the city.

Academia has long attempted to quantify the relationship between commute time, wages and housing costs.

Here are a few examples:

University of Chicago [Note: PDF] looked at the response of housing rental rates, wages, employment and population density can be evaluated in response to changes to highway capacity.

Iowa State did a study on The Effect of Housing Prices, Wages, and Commuting Time on Joint Residential and Job Location Choices [Note:PDF] analyzed how these factors determined where people lived.


Earth to US: You Are Not Alone

August 31, 2005 | 11:14 pm |

[Seoul] raises property taxes to cool surging prices [Note: Reg.]

[Spanish] Housing loans up 26% in May amid ongoing boom

[South Africa] Property boom driving demand for materials

[UK] rate cuts could spark another housing boom

[New Zealand] Headed for Heartbreak?

[China] Concerns deepen over housing boom

[Iceland] Name Europe’s latest ‘tiger.’ Hint: look toward the Arctic Circle.


Is there a pattern here? It seems to me that there has been a lot of analysis on what the Fed will do to cool of the housing boom, but its apparent that many parts of the world are dealing with the same thing the US is at the same time. Australia and the UK just came out of their housing boom 2 years ago.

I would think that any solutions for a soft landing for the US real estate markets must come from internationally-orientated strategies.

Tags: ,