Like I’ve been telling my friends for years, it’s a bubble stupid, it can’t last for ever. If the average young couple has to save money for 30 years just to buy their first starter home, then does that not tell you that something is wrong? Things were out of whack, not everywhere, but apparently in enough areas to have caused this mess that we are now in. I know there is more to it than that, but that is the main reason for our crisis.
We should never have had a housing bubble. If you find the ones responsible for the bubble, then you will have found the ones that are responsible for all of our pain.
jbranstetter04
The housing bubble is bursting and the decline is accelerating!
Here are graphs of inflation-adjusted, historical real estate prices.
Recently, there has been a lot of discussion about the bursting of the U.S. housing bubble. Some economists claim housing prices are near a bottom, while others claim that the real estate bubble is the largest financial bubble in history and still has far to fall. This site aims to add to the housing bubble debate with inflation-adjusted graphs and spreadsheets showing that today’s real estate prices are quite abnormal, especially for many coastal metropolitan areas.
Notice that in the 25-year period from 1975 through 1999, real existing house prices stayed roughly within the range of $125,000 to $160,000, with an average during this period of $142,850. The United States median price was $180,100 as of the fourth quarter of 2008.
http://mysite.verizon.net/vzeqrguz/housingbubble/
Housing prices to free fall in 2008 – Merrill
According to a Merrill Lynch report, home prices will drop 15 percent this year, and declines will continue in 2009.
NEW YORK (CNNMoney.com) — The worst housing financial crisis in decades is only going to get worse, a Merrill Lynch report said Wednesday.
The investment bank forecasted a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010.
By contrast, the National Association of Realtors (NAR) expects housing prices to remain flat in 2008. NAR did cut its home price estimate for the current quarter, however, to a 5.3 percent year-over-year decline, which represents the steepest drop in that price measure on record. But NAR sees an uptick in home prices in the last two quarters of 2008.
“Merrill Lynch’s figures are way too pessimistic, and they are unprecedented,” Lawrence Yun, the National Association of Realtors chief economist told CNNMoney.com. “There is so much variation in local housing markets, and we see stable price conditions for 2008.”
The current housing crisis and the depreciation in home prices have pummeled the economy, with businesses and consumers cutting back on spending, raising the specter of a recession. “Lower sales and higher inventory for sales are lowering the velocity of transactions,” said Fritz Siebel, Director of US Property Derivatives for Tradition Financial Services. “That cannot be a sign of good health for the economy.”
But for those who think that the worst is over, Merrill Lynch said that housing prices still remain comparatively high. The brokerage believes that home prices are still far above historical norms when compared to other measures such as rent or GDP. “By our calculations, it will take about a 20 to 30 percent decline in home prices to correct this imbalance,” said the report.
Merrill Lynch believes that housing starts will most likely slide another 30 percent by the end of 2008 – a historic low.
The report says that the inventory situation only continues to worsen, as homebuilders are now looking at more than a nine months’ supply. “The current supply/demand environment does not favor a swift recovery in the housing market, in our view,” according to the report.
Yun agrees that the reduction in housing starts will not bode well for the economy, especially in the homebuilding industry, but he believes that the reduction will soothe the housing market by slowing the glut in inventory. “The reduction in housing starts is not stabilizing the economy, but it will stabilize the market,” said Yun.
http://money.cnn.com/2008/01/23/real_estate/merrill_forecast/index.htm
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Notice that the …
Notice that the chart was heading up into the realm of the never-before stratosphere by the early 2000s.
Just curious…was Glenn Beck decrying the foolish optimism of the Greenspan FED and Bush II administration as all measures of asset value and debt were climbing through the roof at steep inclines?
Economy will NEVER …
Economy will NEVER recover until the housing market does.
You anit kidding …
You anit kidding because we all better prepare for far worst, because they will get rid of the dollar, then any middle class good paying job, the elect think 20-30 thirty years ahead. this just apart of the plan
Obama is a disaster …
Obama is a disaster for America in so many ways. It will get much worse.
obama should rip …
obama should rip off riches not the middle classes to assist dead beat, being a middle class is so sad that after tax, you feel like you’ve been working hard but live the same life as who don’t, why are we even bother to work hard??
ron paul wants to …
ron paul wants to limit government
Who was President …
Who was President in 2006? Hmmmm
The diagram is ” …
The diagram is “adjusted for inflation”, so if inflation goes up quickly, the downward of the curve and the stopping of house price decrease no longer conflict with each other.
He said FDR was a …
He said FDR was a bad president when he started “playing with Socialism” to feed the starving. WOW. He is a true moron.
Moral of the story …
Moral of the story – Big government = weare are screwed!
That chart looks …
That chart looks very similar to Yale economist Robert J. Shiller’s
search:
shiller housing chart
All Great empires …
All Great empires must fall. We can try to stop it, slow it down or what ever, But it’s sad to say that it is inevitable.
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Nice work. keep it …
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Nice try. Keep it …
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Housing prices have …
Housing prices have nowhere to go, but down. Unfortunately, we will all be left “holding the bag” when this market collapses in upon itself. The current administration is pulling out all the stops to transfer “The Rich” (me and you) the difference between what housing prices are, and what they should be. Income redistribution anyone? From each, according to their ability; to each, according to their needs. – Karl Marx
All on top of a $ …
All on top of a $ 53 T debt… Thats 450 000 for every household in the USA… Time to give up and start over with a new currency
Given that other …
Given that other places such as Britain, Canada and the rest of the Anglosphere is doing much better, is it possible there will be a brain drain to these places?
High tech jobs for Nasa… might end up at the ESA right? I note the European auto industry is a few decades ahead of the American one (Valkswagen/BMW/Vauxhal/Volvo vs GM/Ford).
don’t forget they …
don’t forget they are all made out of cheap butt particle board – lasts about 20 years – it’s gonna be fun
50% down, 50% to go …
50% down, 50% to go! TIMBERRRRRRRR! And that’s just to get to the historical median…that isn’t even taking into account the current economic conditions. We’re…how do you say it…fucked? Where was the gov’t when the median price was skyrocketing to uncharted heights? That’s when they should have done something. Now it is too late. Stand back and watch the market do it’s thing…and take the world down with it.
Home prices are …
Home prices are INSANE !
Of course less than 1% of…YOU…understand that this could NEVER have taken place without the “Federal Resserve” Central Banking Paper “money” SCAM that currently runs this nations economics
The REASON Home prices never became so INSANE in the past 150 years….is because this nation was on it CONSTITUTIONAL..SILVER/GOLD STANDARD
You cant PRINT SILVER…so it keeps things in check
You CAN PRINT PAPER “money’ thats why it ALWAYS DESTROYED A NATIONS ECONOMY
They have plenty of …
They have plenty of solutions, and none of them involve budgets creating trillions of dollars of additional debt that even our grandchildren will not be able to pay off. How do people who receive federal money feel that they have stolen that money from their future grandchildren. If they have a conscience then they will feel bad.
I know that you think taxing the rich will solve this deficit problem, but it will not, and in fact it will only make it worse.
glenn beck sucks, …
glenn beck sucks,always notice they try to cut obama down but never offer a ”better way of doing things?, thats because the rep. started this mess [on there watch!] beck !!!
Glenn Beck is …
Glenn Beck is brilliant!