We are officially in the middle of the worst housing collapse in U.S. history - and unfortunately it is going to get even worse. Already, U.S. housing prices have fallen further during this economic downturn (26 percent), then they did during the Great Depression (25.9 percent). Approximately 11 percent of all homes in the United States are currently standing empty. In fact, there are many new housing developments across the U.S. that resemble little more than ghost towns because foreclosures have wiped them out. Mortgage delinquencies and foreclosures reached new highs in 2010, and it is being projected that banks and financial institutions will repossess at least a million more U.S. homes during 2011. Meanwhile, unemployment is absolutely rampant and wage levels are going down at a time when mortgage lending standards have been significantly tightened. That means that there are very few qualified buyers running around out there and that is going to continue to be the case for quite some time to come. When you add all of those factors up, it leads to one inescapable conclusion. The "housing Armageddon" that we have been experiencing since 2007 is going to get even worse in 2011.
Right now there is a gigantic mountain of unsold homes in the United States. It is estimated that banks and financial institutions will repossess at least a million more homes this year and this will make the supply of unsold properties even worse. At the same time, millions of American families have been scared out of the market by this recent crisis and millions of others cannot qualify for a home loan any longer. That means that the demand for unsold homes is at extremely low levels.
So what happens when supply is really high and demand is really low?
That's right - prices go down.
Profits are good for the rich they are accumulating assets in this economic crisis at a record pace.
ReplyDeleteThey have plenty to spend and are beginning to drive the economy forward by creating demand. A real world jobless recovery is now underway.
Just look at the stock exchange !
America is back on the up and up.
Obama and the Republicans have formed a great national unity government .
Tax cuts for the better off and bi-partizan supported bailouts flow like money /honey to the elite as the printing press is cranked up.
As soon as the rich and upper middle class properly fully recover by having all past losses socialized and their lost capital replaced they will increase there spending on goods and services again.
Creating boom times as the recovery moves into second gear with QE2!
Americans just have to be patient ignore any inflation worries or their savings and housing asset values falling and wait for the inevitable trickle down effect to rescue them from their debts and any inadvertent increased taxes and loss of services while they wait on their food stamps.
Yes virginia there is a bearded santa clause his name is Ben .
But no he does not use reindeer anymore he now uses a helicopter to drop his gifts on wall st.