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The Housing Depression Deepens
IBD Editorials ^ | June 15, 2011 | Staff

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 ...


TOPICS: Culture/Society; Editorial
KEYWORDS: default; economy; estate; real
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1 posted on 06/15/2011 5:05:29 PM PDT by Kaslin
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To: Kaslin

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.


2 posted on 06/15/2011 5:08:17 PM PDT by nascarnation
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To: Kaslin

Another wave of foreclosures in the near future.


3 posted on 06/15/2011 5:11:44 PM PDT by Huskrrrr
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To: Kaslin

Down 33%? Really? Mine just went up the usual 11% per year according to the tax appaisal office wanting their $$$.


4 posted on 06/15/2011 5:12:44 PM PDT by bgill
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To: Kaslin
Investment strategist Barry Ritholtz, while believing comparisons to the Great Depression to be overblown,...

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.

5 posted on 06/15/2011 5:15:35 PM PDT by Loyal Buckeye
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To: Kaslin
When will the einsteins in the ruling class face up to the fact that there is no easy way out? the Austrians led by Mises made clear, there is no escape from the pain of a collapsing credit bubble. It's simply a case of "Pay me now or pay me later."
6 posted on 06/15/2011 5:18:08 PM PDT by hinckley buzzard
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To: nascarnation
"Another nail in the coffin for Baraq’s re-election chances."

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

7 posted on 06/15/2011 5:21:01 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: Loyal Buckeye

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.


8 posted on 06/15/2011 5:25:09 PM PDT by dirtboy
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To: hinckley buzzard
A lot of land/house values depends upon where you live.

This all comes back to the lack of jobs. Obama's fault. He has no clue.

9 posted on 06/15/2011 5:26:04 PM PDT by AGreatPer (May 21 end of world canceled, Friday nights at Walter Reed continues)
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To: bgill
Down 33%? Really? Mine just went up the usual 11% per year according to the tax appaisal office wanting their $$$.

Mine is down 50% in AZ, so I got you covered.

10 posted on 06/15/2011 5:26:28 PM PDT by AmusedBystander (The philosophy of the school room in one generation will be the philosophy of government in the next)
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To: Loyal Buckeye

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.


11 posted on 06/15/2011 5:28:05 PM PDT by Terry Mross (I'll only vote for a SECOND party.)
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To: bgill

You forgot the s/> tag


12 posted on 06/15/2011 5:29:36 PM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: AmusedBystander

Tax appraisal wanting their $$$ are the key words


13 posted on 06/15/2011 5:33:32 PM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: Terry Mross

Meant to say for those who DIDN’T cut back.


14 posted on 06/15/2011 5:34:22 PM PDT by Terry Mross (I'll only vote for a SECOND party.)
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To: Kaslin

Property taxes aren’t down that much, yet. Let’s see if postponing our compliance with consumerism for another 20 years will do it.


15 posted on 06/15/2011 5:51:07 PM PDT by familyop (We Baby Boomers are croaking in a thunderous avalanche of rottenness heard across the universe.)
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To: familyop

Yeah, instead of property taxes going down when the value of your property goes down, they go up


16 posted on 06/15/2011 5:55:18 PM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: AmusedBystander

I tell you, AZ does a lot of things right. Mine is down a LOT in AZ.


17 posted on 06/15/2011 6:04:40 PM PDT by crz
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To: Loyal Buckeye

“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!


18 posted on 06/15/2011 6:07:38 PM PDT by dalereed
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To: bgill

EXACTLY RIGHT, when they going to get the message?


19 posted on 06/15/2011 6:33:55 PM PDT by annieokie
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To: Kaslin

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.


20 posted on 06/15/2011 6:45:14 PM PDT by eaglestar
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