UBS has released its annual home price bubble report. Here are the most overvalued markets.
The housing market is in a recession as mortgage rates rise sharply. If the consensus among economists is correct for an existing home sales report to be released later in the morning, sales would be down 28% from their peak.
That’s why the arrival of the seventh annual UBS global property bubble report shows the difference, coming at the start of a retracement rather than during a wave of excesses.
“Willingness to pay for owner-occupied homes will likely be affected. In cities with strong population growth, such an adjustment can manifest in the form of prolonged stagnation in nominal purchasing prices. But since the property market rarely tends to move sideways, this is not the most likely outcome,” the report said.
Since the UBS report is a global report, only 5 US markets were analyzed: Miami, Los Angeles, San Francisco, Boston, and New York. The bad news is that the whole year is overvalued. The good news is that there is no such thing as a bubble risk. Save Miami, other cities have not seen price increases as strong as the national average, UBS pointed out. And earnings growth has been particularly strong, though strained affordability is likely to start taking a hit, the report warns.
Globally, the market most likely to fall into a bubble is Toronto, followed by Frankfurt, UBS said. Adjusted for inflation, prices in Vancouver and Toronto have more than tripled over the past 25 years.
“In such overheated markets, with housing affordability already strained, recent interest rate hikes by the Bank of Canada could be the last straw to break the camel’s back. New buyers and owners during mortgage renegotiation not only need to pay higher interest rates, but are also required to provide additional income to qualify for a mortgage,” UBS said.
UBS’s ranking is based on five factors: price-to-income, rental rate, change in mortgage-to-GDP ratio, change in construction-to-GDP ratio, and the city’s relative price relative to country.
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British Prime Minister Liz Truss abruptly resigned after turbulent financial markets and a rebellion within her own Conservative Party.
Tesla
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6% drop in pre-market trading after electric car maker third-quarter profit and revenue missed estimates. The miss does not affect the confidence of CEO Elon Musk, who says there is a way for Tesla’s valuation far exceeds Apple and Saudi Aramco combinedas he also said stock buybacks of up to $10 billion are under consideration.
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but excited about the potential of social media services.
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Allstate
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share skidded after the insurer said it was looking forward to the third quarteross, about disaster damage caused by Hurricane Ian as well as increased levels of bodily harm and physical damage. IBM
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however rose after the tech giant upgraded its sales growth outlook for the year.
European telecommunications equipment manufacturer Ericsson
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and Nokia
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each fell behind their results.
Philip Morris
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raise your offer for the match Sweden
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to $15.7 billion and agree to pay separately $2.7 billion for U.S. rights to IQOS heated tobacco products from Altria
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Oakmark Foundation
In his third-quarter letter to shareholders, Bill Nygren of Oakmark Funds presented this chart, showing the 50th highest price-to-equity ratio in the S&P 500 to the fifth P-to-E. 450. That dispersion is 40% wider than normal. “As usual, the unusually high volatility leads to high valuation spreads that are – and we believe will be – a good environment for adding value through stock picking,” he said.
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These are the most active stock market stocks on MarketWatch as of 6 a.m. ET.
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| TSLA |
Tesla |
| GME |
GameStop |
| MULN |
Mullen car |
| AMC |
AMC Entertainment |
| NIO |
Nio |
| AAPL |
Apple |
| BBBY |
Outdoor shower bed |
| APE |
Priority AMC Entertainment |
| NFLX |
Netflix |
| CFMS |
Conformis |
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