Posted on 06/15/2011 5:05:27 PM PDT by Kaslin
Economy: The collapse of residential real estate prices just officially exceeded the scale of the Great Depression's housing crisis. Using mortgages as a welfare program turned out to be long-lasting poison.
Home prices have fallen by 33%, according to Standard & Poor's Case-Shiller data, since the housing market began its long, hard collapse in 2006 — with a further decline expected in the months ahead.
During the Depression, by comparison, prices fell 31%. In about a dozen U.S. cities, the prices of residences in March were at their lowest since the housing crisis began.
Investment strategist Barry Ritholtz, while believing comparisons to the Great Depression to be overblown, noted on his Big Picture blog earlier this month that the sales volume of new homes has fallen 82% during today's cycle, vs. a comparable 80% decline from 1929 to 1933.
As S&P noted when it published its latest housing data, the price rebound of 2009-2010 was artificial, due largely to use of the first-time homebuyers tax credit.
"Excluding the results of that policy, there has been no recovery or even stabilization in home prices during or after the recent recession," S&P observed. "Further, while last year saw signs of an economic recovery, the most recent data do not point to renewed gains."
That means rather than the much-noted "double dip," the housing crisis is actually in an alarmingly steady, though masked, free fall.
Even when the current decline hits bottom, Capital Economics senior economist Paul Dales warned in a Fox News interview Wednesday, there's unlikely to be "any significant or sustained rises." Rather, he said, we'll probably see "a couple years of pretty much no recovery whatsoever."
(Excerpt) Read more at investors.com ...
Another nail in the coffin for Baraq’s re-election chances.
This also compounds the unemployment problem because it’s so much more difficult to relocate.
Another wave of foreclosures in the near future.
Down 33%? Really? Mine just went up the usual 11% per year according to the tax appaisal office wanting their $$$.
I would think the effects of lost values today would be greater than during the Depression. The reason I say that is people in the '20s and '30s had more hard cash invested in their properties than borrowers today.
As The Obammunist continues to laugh at the unemployed and gloat at his success at socializing medicine, 90% of the mortgage industry and two-thirds of the U.S.A. auto indistry.
Barak bin Hussein abu Obama al- Kenyata is confident he will retire as one of most successful Marxists in history.
yitbos
In a way, the structural changes this time around are more profound. A lot of consumer spending the last decade was driven by home equity loans - a process doubly magnified by the bubble and the tax-exempt status of such loans. That spending is now largely gone and not coming back.
This all comes back to the lack of jobs. Obama's fault. He has no clue.
Mine is down 50% in AZ, so I got you covered.
There was also a mortgage moratorium during the depression.
Some “experts” are saying the builder I last worked for won’t be here in a few years. I think that’s probably the case for most large builders. At least for those who had the sense to cut back.
You forgot the s/> tag
Tax appraisal wanting their $$$ are the key words
Meant to say for those who DIDN’T cut back.
Property taxes aren’t down that much, yet. Let’s see if postponing our compliance with consumerism for another 20 years will do it.
Yeah, instead of property taxes going down when the value of your property goes down, they go up
I tell you, AZ does a lot of things right. Mine is down a LOT in AZ.
“The reason I say that is people in the ‘20s and ‘30s had more hard cash invested in their properties than borrowers today.”
Most losing homes today are leaches with almost nothing invested!
EXACTLY RIGHT, when they going to get the message?
Mine has taken a nose dive in Miami so I renovated, hired & Mgt Co. for $30 a mo., rented it out and moved to San Antonio to stay with & work for my brother. This after working a dead end job in insurance. Right now I have to admit that since December I’ve made more than I ever have & will be credit card debt free soon.
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