Housing Market – Worse Than The Great Depression, Getting Worse

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Falling home prices

While the WH has been optimistic in talking about the 9% decrease in foreclosures this quarter, that has unfortunately been offset by the glut of houses on the market and the length of time it takes for a bank to foreclose. In Florida, it takes a bank 600 days for a bank to foreclose. I know people in NY who haven’t paid their mortgage in six years. Banks are reluctant to foreclose because they don’t want to add bad debt to their sheets.

We cannot tax and spend our way out of a bad economy. We have proven that with the Keynesian economics we have used over the past few years. The Stimulus, for one, is a proven failure. In addition, our heavy-handed Big Government has added regulation after regulation on private enterprise while increasing the numbers of unsustainable government jobs and catering to unions. The unions own the Democratic Party and no one special interest group should have that much power. People are unemployed or underemployed at a rate of 19+% and homes are being foreclosed on at a rate worse than The Great Depression. There is a slight uptick in demand but that is offset by the glut of homes on the market.

 

It is interesting that New York shows the greatest decline and the largest exodus of any state. It’s interesting because New York is the 49th least friendly state to business; it’s over-run with corruption and patronage (just look at the MTA), and it’s a big tax, spend, entitlement state. Interesting.

“‘If you’re looking to score a great deal on that cute little home, it turns out you may want to wait a little longer to buy — like until next year: U.S. home values dropped 3% in the first quarter, their sharpest quarter-over-quarter decline since the dark days of late 2008, according to the Zillow Home Value Index report released Monday.

Based on those results, as well as increases in foreclosures and underwater mortgages, Zillow revised its forecast for when U.S. home values will bottom out. The real estate tracking service now expects home values won’t begin to recover until 2012 — at the earliest — instead of later this year.

“Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011,” said Zillow chief economist Stan Humphries in a statement. “We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won’t see a bottom in home values until 2012 or later.”

This means prospective home buyers should beware: If they buy now, they stand a good chance of catching a falling knife by the blade, rather than making a smart deal…” Home prices plunge

According to Zillow’s first quarter Real Estate Market Reports, median home values, as measured by the Zillow Home Value Index, fell 3 percent during the first three months of the year. This decline was large enough to cause Zillow to push back its forecast. Previously, we anticipated a bottom in home values by the end of 2011. But with values falling by about 1 percent per month so far, it’s unlikely that will happen. We now believe a bottom will come in 2012, at the earliest.

The quickly-falling home values caused more homeowners to slip into negative equity. By the end of the first quarter, 28.4 percent of single-family homeowners with mortgages were underwater, up from 27 percent in the fourth quarter of 2010…” Read here: No respite

In January, we were told the decline in home values surpassed those of The Great Depression and now it’s worse. worse than The Great Depression

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