That’s it in a nutshell. There’s far too many houses for the population of people who can afford them. There’s far too many cars registered for the number of drivers we have to drive them.
This is just the same sort of thing as the ag over-supply that helped lead us into the Depression. They were heaping wheat up into huge piles and it was rotting. The elevators were telling farmers to no longer bring in their wheat, etc.
We have over-supply in a lot of economic sectors, but housing is the worst, and housing being over-supplied impacts a lot of other sectors, including appliances and durable goods.
A number of items have been posted but the resumption of essentially the “Full Doc” standards for full documentation of income and credit worthyness over the last year is a bit daunting to many of todays buyers.
For the mortgage lenders that bought up such cows as Countrywide and others to survive examination by the feds and their own finacial reviews, they have had to go back to standards that haven’t been applied for twenty years.
Even with stellar credit and purchases at half of what any standard say is someone’s limit, the documenation and baby-kissing that has to occur today is the worst I have seen as a buyer in twenty years.
Many prospective buyers have their contracts fall apart as they don’t survive the guantlet.