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Japan Land Prices Fall for 10th Year
Associated press ^
| 2 Aug 02
| staff
Posted on 08/02/2002 4:09:14 PM PDT by RightWhale
TOKYO -- Land prices in Japan tumbled for the 10th consecutive year in 2001 as the stagnant economy again failed to ease the hangover from 1980s real-estate speculation, the government said Friday.
The average price of land dropped 6.5 percent during the year to $1,084 per square yard, the National Tax Agency said. That is higher than the 6.2 percent drop in 2000 but lower than the 7 percent decline in 1999.
A few plots, however, retained their sky-high value.
(Excerpt) Read more at newsday.com ...
TOPICS: Business/Economy; Extended News; Foreign Affairs; Japan; News/Current Events
KEYWORDS: bubble; deflation; realestate
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Can real estate prices decline nationwide for an extended period? Compare and contrast
To: RightWhale
Yes, they can. Especially as incomes decrease and the inflated prices of new homes and office space become prohibitive for many families. Look for our bubble to deflate too, how much is the scary question.
To: Nuke'm Glowing
The only way to have a real estate bubble would be to have some quasi-governmental organization mindlessly pumping money into housing Like this
Friday, August 2 2002 8:03pm ET - U.S. Markets Closed.
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| Splits: 17-Oct-89 [3:1] 16-Jan-96 [4:1] |
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4:01pm · 72.15 |
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-2.71 (-3.62%) |
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74.86 |
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74.50 |
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5,565,100 |
Day's Range
71.20 - 74.64 |
Bid
N/A |
Ask
N/A |
P/E
14.40 |
Mkt Cap
71.861B |
Avg Vol
3,639,000 |
52-wk Range
64.03 - 85.75 |
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N/A |
Ask Size
N/A |
P/S
1.45 |
Div/Shr
1.32 |
Div Date
Aug 25 |
1y Target Est
98.07 |
EPS (ttm)
5.20 |
EPS Est
6.19 |
PEG
0.79 |
Yield
1.76 |
Ex-Div
Jul 29 |
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To: RightWhale
To: AdamSelene235
All that needs to be said has been said in that chart you have so kindly added to this discussion. Which reminds me that somehow, some way, I have to get some cash set aside to short FNM....that will be the steal of the century in the coming months.
To: Nuke'm Glowing
that will be the steal of the century in the coming months. Given the way America does things, fast and big, as opposed to Japan, deliberately and neatly, it could be interesting.
To: Nuke'm Glowing
Which reminds me that somehow, some way, I have to get some cash set aside to short FNM.. Why that's down right Un-American.
I shorted at 82.
I've been tempted to put the short money into puts.
Must.... resist..... the evil temptation.
To: AdamSelene235
And thanks for the reminders with those articles. When you have a credit implosion, as we are about to really experience, we will look a lot like Japan except worse as we have no savings rate and the bankers are getting ready to eliminate personal bankruptcy as an option with the purchase of key Senators to promote and pass the legislation. I think that Bush becomes a one termer if he signs this legislation as the housing and credit bubbles pop at the same time after the next major attack by the terrs within the nation's borders.
To: RightWhale
From the article-
The country's most expensive real estate was in front of the Kyukyodo stationery store in Tokyo's bustling Ginza shopping district, where a square-yard plot was valued at $100,840, the agency said
For those of us accustomed to buying real estate by the acre, 4,840 x $100,840 = $488,065,600 per acre. for the most expensive land.
The average land costs $5,246,560 per acre.
By compariosn, here is a table showing recent US commercial land transactions in 2002.
| Land |
- |
| - |
Count |
Price |
Acres |
Price
per Acre |
Price per
Transaction |
| - |
| New England |
2 |
$9,600,000 |
0.2 |
$29,891,304 |
$4,800,000 |
| MidAtlantic |
10 |
$139,723,200 |
321 |
$417,352 |
$13,972,320 |
| Great Lakes |
10 |
$27,127,161 |
299 |
$88,137 |
$2,712,716 |
| Plains |
7 |
$9,185,041 |
26 |
$210,724 |
$1,312,149 |
| Southeast |
32 |
$166,546,633 |
5,962 |
$25,533 |
$5,204,582 |
| Southwest |
13 |
$20,163,000 |
28 |
$557,618 |
$1,551,000 |
| Mountain |
10 |
$70,108,224 |
450 |
$155,917 |
$7,010,822 |
| Pacific |
10 |
$37,245,069 |
192 |
$190,497 |
$3,724,507 |
| Total |
94 |
$479,698,328 |
7,279 |
$61,255 |
$5,103,174 |
To: AdamSelene235
Better to be be a capitalist pig and be "Un-American" with cash than to be an idiot and listen to a two bit CNBSC huckster. Did you notice the slaughter of the European banks the last two weeks? There is a definite unease about the upcoming unwinding of our bubbles overseas and the Japanese economy will not do well in this shock either. The move to shorter term treasury auctions will get real ugly also as I can see some drastic price swings after an attack and a major real estate crash.
To: Looking for Diogenes
I find the residential side more interesting in the U.S. as the homeowners have their stock positions unwind, you know and I know that the second and in some cases third morgtages these people took out to buy stocks will come home to roost. I mean, what will a Citigroup do with subdivisions full of homes if they elect to repo all of them????
To: Nuke'm Glowing
Better to be be a capitalist pig I prefer "running dog".
Did you notice the slaughter of the European banks the last two weeks?
No, I missed that. One of the Kiwi banks I hold, ANZ, took a bit of a hit. I've been wondering if I should bail, but I like how decorrelated New Zealand is with the rest of the world. Nice Asian exposure as well.
What's your take on the Euro banks? Any refs?
There is a definite unease about the upcoming unwinding of our bubbles overseas and the Japanese economy will not do well in this shock either. The move to shorter term treasury auctions will get real ugly also as I can see some drastic price swings after an attack and a major real estate crash.
A GSE implosion would very interesting.
To: Nuke'm Glowing
Good point. Japan may not be the only country to see land prices fall.
To: AdamSelene235
Actually, I have CNBSC on in the backround and Kudlow and Cramer and their Bear and Bull discussion focused on this briefly. I'll do some research as I'm sure Barrons will bury an aritcle our two on this. The Bank of Scotland is being bandied about on every show on CNBSC World/Asia if you have that on the bird or your cable provider. I'll check out Bloomberg too, as they usually cover the Eurobanks during the weekend briefly. The genesis of the debate was that the Euro was decimating the banks over there as they had to reallocate resources due to the decline of the dollar to buy Euro backed investments and notes and that they were slow to do so. The implication I drew from this, is what happens if the USD continues to deflate (as it must) and the Eurobanks suddenly unwind their US commercial real estate holdings. Add that to the consumer weakness and I can see the real estate bubble exploding instead of popping. And Greenspan could not stabalize the dollar fast enough if this were to occur.
By the way, I prefer calling my self a "fire-hydrant dog" instead of running dog. I express my opinion of bad stocks by shorting them the same way a dog expresses himself on a fire hydrant.
To: Looking for Diogenes
Actually, if you didn't have to worry about a military takeover, Argentina has the best real estate deals in the world right now....If you enjoy risk and have the cash in USD to buy it...
To: AdamSelene235
To: Nuke'm Glowing
It makes sense that Japanese real estate is declining in price simply because their population is declining.
It's that whole "supply versus demand" thing, writ large again.
California, with its massive economic downturn, still has home prices INCREASING. Why? Supply versus demand. Calfornia has more people every month, but it has the same amount of land. Thus, demand increases while supply stays about the same, so one would expect prices to climb.
If you watched the commercial real-estate markets of mid-sized American cities in the early 1990's (outside of California), those cities that saw their populations decline almost invariably saw their downtown real-estate prices decline (even though our economy was supposedly booming at the time).
So is real estate priced according to how well the economy is doing, or is it priced according to supply versus demand?
Once you honestly answer that question, then you need to ask yourself if you are seeing the population increase or decrease in the area where you are pricing real-estate.
17
posted on
08/02/2002 6:07:58 PM PDT
by
Southack
To: Southack
Actually the issue is not as simple as a supply-demand issue as the chart above clearly indicates. The government, in it's infinite wisdom as usual, has meddled in the free market and allowed the developers, especially here in Florida to over-develop large subdivisions which are not pre-sold. My concern relates to the skyrocketing real estate prices nationwide, but especially in states like California and Florida. You can not have price increases where values literally double every 5 years and expect it to continue forever. And salaries are not keeping pace with the price levels of many of these new developments. Why? Consider that a portion of the individual's personal assets are now tied to the whims of the equity market. That credit card debt as well as morgtage debt has skyrocketed because of over inflated liquidity being infused into the market. It's only natural that it deflates to a new lower but reasonable level. The problem is that once a consumer experiences a 10-20% decline in the value of their home (as is happening in other Southeastern suburbian areas...Atlanta comes to mind) in addition to the decline in their equity holdings, if and when that margin call comes, most homeowners are unprepared to handle it. And that margin call is not for just stock holdings. Many have bloated their credit cards beyond reason. And my question is that in those states without a homestead exemption for bankruptcy, and the new laws about to take effect, what will the creditors do with all this real estate? Auction it of course, at levels far below it's previously estimated value. That's when the bubble pops.
To: Southack
Good point, Southack.
POPULATION: Japan Desperate for a Baby Boom
The article includes info like:
Already down to 1.42 children per family in 1996, latest statistics show Japan has a birthrate of less than one child per family. At present, about 15 percent of the population is 65 years old and above. By year 2020, says the report, one in three people will be 65 or older, or 32.3 percent of the population.
One of the top reasons cited by Japanese couples for not having more than one or two children is economic, according to surveys conducted by the government. The high cost of living in Japan and a growing desire for luxuries can mean an average expense for child care of 20 million yen (166,000 dollars) per child until age 18, say family experts.
In the past several years, for instance, women have been delaying marriage and children in order to concentrate on their careers. An increasing number of young couples -- themselves products of small- size families -- also say they prefer to be without children.
The populations of Japan has not (officially) decreased yet, but it is growing very slowly.
To: Looking for Diogenes
Already down to 1.42 children per family in 1996, latest statistics show Japan has a birthrate of less than one child per family.Japan is screwed. They just don't have the people to make their economy to work anymore.
Japan were awesome in the 1980's. I guess it was their time. It's hard to believe that for a while, the Japanese were better than us. They had so many inventions, and the country was thriving. But I guess the nation has lost her desire to live. Another example of the Death of the West.
Tell me one Western country that have above replacement rate, and then I will be optimistic.
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