Tuesday, August 24, 2010

15 Signs the US Housing Market Is Headed Toward Collapse

Business Insider features an article, complete with 15 charts, by Michael Snyder of The Economic Collapse.  Read:
The U.S. housing market is dying. You will only hear hints of this on the mainstream news and from the politicians in Washington D.C., but as statistic after statistic continues to roll in, the reality of what is happening is becoming very difficult to deny.
Up until the end of April, the giant tax credit that the U.S. government was bribing home buyers with helped stabilize the real estate market, but now that the tax credit has expired the decline of the U.S. housing market has resumed. Mortgage defaults continue to set new records. Foreclosures continue to set new records. Home repossessions by banks continue to set new records. The number of homes being constructed and the number of Americans applying for home loans is at stunningly low levels.
For decades, owning a home has been touted as the very heart of "the American Dream", but today that dream is out of reach for an increasing number of Americans. Why? It is because there are not nearly enough jobs for everyone. Without a jobs recovery, there simply is not going to be a housing recovery. Unfortunately, as the U.S. economy continues to come apart like a 20 dollar suit, even more Americans are going to lose their jobs and the U.S. housing industry will continue to experience a very painful decline.
The truth is that this is not a short-term downturn in the housing market. During the past two decades, an insane amount of debt fueled an artificial housing bubble that drove home prices to ridiculous levels. Now the U.S. housing market is trying to correct itself, and no matter how many trillions of dollars the U.S. government throws at the problem the fundamentals of the marketplace are still going to have their way eventually.
The U.S. economy is in decline. The employment situation is going to go from bad to worse. Americans without jobs are Americans that cannot buy homes. Millions of Americans who are employed are finding it increasingly difficult to make it from month to month. The truth is that there is no way that Americans can afford the ridiculously inflated home prices that we have seen over the past decade any longer.
So, yes, the U.S. housing market is headed for a complete and total nightmare.
SEE THE CHARTS HERE.

Related:
The 5 Stages of America's Housing Bubble
Albemarle County Home Sales Plunge 46% in July 2010

8 comments:

Montpellier said...

How about today's news on inventory and existing home sales? I see that finally - FINALLY! - house prices are starting to fall in c'ville. Humorously, they are houses in the 'hood (10th & Page), but they are returning to values approximating what they should - well below $100k Belmont won't be far behind!

Anonymous said...

examples?

owners in the more expensive neighborhoods seem to have the luxury to hold out indefinitely. what's a loss of $500 a month as a rental compared to dropping the price 100k?

Anonymous said...

Prices dropping, but will they sell?

Fry's Spring:-20k 208 Monte vista $249k, which isless than owner paid

http://www.trulia.com/property/8938769-208-Monte-Vista-Ave-Charlottesville-VA-22903

Little High Street -50k

http://www.trulia.com/property/3014123281-1112-E-High-St-Charlottesville-VA-22902

2210 Greenbrier started at $389k, now down to $314k

http://www.trulia.com/property/map/3003762345-2210-Greenbrier-Dr-Charlottesville-VA-22901

Houses in the 10th and Page and Fifeville are now being listed in the $100's...and under, except in the case of "white flight" where the "gentrification" never caught up with the bubble buyers

Anonymous said...

C'ville prices have not begun to discount to the mean given the exaggerated values put on housing stock that is deteriorating and obsolete. $50-75 sq. ft. is not out of the question.

John Doe said...

It's bad, locally, nationally:

http://realcville.blogspot.com/2010/08/nationwide-home-sales-drop-26-to-15.html

Montpellier said...

I have no idea if they'll sell - I kind of doubt it.

'hood homes I was thinking of:

MLS# 480478
MLS# 480530

Anonymous said...

would the department of health let you move into those homes?

figure what the cost of tear down + new construction would be, or strip to the studs and refinish. you'd already be the most expensive house on the street. why bother?

Montpellier said...

Well, my bet is they have certs of occupancy, so you'd be all set. The issue is getting past/through an inspection and appraisal. Likely not FHA.

My point was that those were valued at >$100k not very long ago. They are almost immediately adjacent to a number of quite a bit more nominally expensive houses. I'd be about ready to kill myself if I was one of the peak buyers who bought the redeveloped houses on the corners of 10th and Page. Definitely I'd be thinking of walking.