The Nationwide has released its latest house price survey, showing a very large 1.8% fall in British house prices between January and February 2009. This brings the yearly decline to a record 17.6%.

Yet, incongruously, the Nationwide revealed this information on its website under the heading “improving affordability helps new and existing buyers.” If this does not smack of cheerleading, I don’t know what does.

This comes from S&P’s website (pdf):
Data through December 2008, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the prices of existing single family homes across the United States continue to set record declines, a trend that prevailed throughout all of 2007 and [...]

As recession takes hold, European citizens are starting to ask questions about how they were led into this, the deepest downturn in three-quarters of a century. The leading Spanish daily El Pais published a very thoughtful article today asking how things had unravelled so quickly and so spectacularly in Spain, previously one of the fastest growing economies in Europe.

These are the same questions that one must ask in the United States, Britain and Ireland regarding their own property bubbles. And, in view of recent turmoil in astern Europe, I suspect similar answers will be sought there as well.

This first part in a series of articles lays out the statistics of bubble and bust, demonstrating the scale of the bubble in Spain and it also makes a number of suggestion as to how to prevent a recurrence. You should note that this article points out Spain’s helplessness due to its lack of control over interest rates as a key impediment to solving the problem. Below is my translation of the article:

This week’s Barron’s magazine highlights the abysmal state of the Manhattan real estate market. Manhattan was one of the last bubble markets to burst. Now, things are unraveling quickly, particularly at the high end. Some experts see another 30% down before the carnage is over. The trigger for the bubble’s bursting came in the form of Lehman Brothers, making the NY real estate market another reminder of how badly the Lehman situation was handled by Paulson, Bernanke and Geithner.

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The monthly Nationwide Building Society survey is out for house prices in the U.K. The data show an annual fall that is the steepest on record at 16.6%. This means that house prices are now falling more rapidly than ever in the U.K. and that spells bad news as its economy has just entered recession.

In November, the U.S. federal agencies which oversee the banking system proposed new guidelines for real estate appraisals. One would imagine that these guidelines would be in keeping with the new more stringent regulatory frame of mind the financial services sector. This is not the case.

In fact, the new proposal appears to entirely eliminate mandated written appraisals in connection with cramdowns and refis.

I have yet to read what the media has reported on the new Case-Shiller Housing Index numbers for November 2008. However, I have crunched the numbers and they do not look very good.

For the Composite-20 list of cities, the index is down 18.2% in the past year, putting it down 25.1% from its peak. The Composite-10 list shows a fall of 19.1% and 26.6% for the same time frames. This puts prices back to levels last seen in February 2004.

The data are in for house prices in the United Kingdom and they are not good. Prices have now fallen 18% from their peak in October 2007 according to the latest Nationwide Building Society survey. They were down a massive 2.5% in December 2008 alone. If you recall, I said November’s survey showed that prices had dropped 13.9% in the year to November, with the losses in December, this number has accelerated to 15.9%- one reason I predicted the United Kingdom will suffer a wave of defaults in the coming year.

The S&P/Case-Shiller Index for U.S. housing came out today. It was a pretty nasty little report. It showed a clear acceleration in home price declines for the month of October, the latest month for which data is available. In the Composite-10, prices are a full 18.6% lower than they were last October. While I have believed the pace of house price declines was slowing, this report pours cold water on that thesis. The report also suggests that house prices will be a major concern for the incoming Obama Administration.