Tuesday, May 22, 2012

Greek House Prices

I found the above data for the Greek house prices at the Bank of Greece.  It's an index for all urban areas with 1997 set to 100.  I don't believe it's inflation adjusted.  The data are annual through 2011 but I also put in the estimate for Q1 2012.

There seem to be several interesting points:
  • Greek house prices tripled in only 15 years.
  • They have so far fallen about 20% (nominal) from the peak - closer to 30% in real terms.
  • The decline accelerated in 2012.  Given that the country shows no sign of political and economic stabilization, it's likely they'll fall quite a bit more.
Greece seems like an interesting case study of how much your house can lose value if your country really goes to hell.  So far, it's not worse than what US homeowners lost:

(graph from CR).  And indeed some parts of the country (Florida) lost a lot more.

The big difference is that US house prices seem to be close to stabilization, whereas Greek house prices still seem to have a lot more downside risk.  It's helpful for a country to have its own currency.

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