For everyone that thinks that the worst of the Real Estate crash is over, go read this article…
Housing Crash to Resume on 7 Million Foreclosures, Amherst Says
Each of these 7 Million foreclosures will have two effects:
1. increase the supply of available houses by 1;
2. decrease the number of households looking to buy a home by 1; (at least til their credit is repaired)
These two things create higher supply and lower demand which will almost certainly result in lower real estate prices.
Lower real estate prices could in turn lead to MORE FORECLOSURES in an classic negative feedack loop…
And every foreclosure is a LOSS to a bank or investor somewhere. And the threat of bank failure and credit market freeze is what caused the global panic in the Fall of 2009. The government is NOT in a strong position to bail out these banks going forward, we are already spending way more than we are collecting and the rest of the world grows tired of propping up the dollar…
AND…
The federal tax credit, worth $8,000, is presently propping up the market and making it possible for people without a reasonable down payment to get into a new house. This idiotic government redistribution scheme is thankfully set to expire at the end of November. That will make housing $8,000 more expensive for first-time buyers further reducing demand.
And…
If interest rates for mortgages should somehow rise from historic lows that we are presently enjoying into the 7%, 8%, 9%, 10%, and higher range then the resulting higher monthly mortgage payments will be a huge block to people trying to buy these homes. Because the amount of house someone can afford at 10% interest is HALF what they can afford at 5% interest…
We are not out of the woods…
{ 19 comments… read them below or add one }
At least in the UK, the government have their prioroties right. They have a comprehensive industrial and economic strategy: bashing bankers’ bonuses!!
For strategy, read vacuum!
http://www.martin-wright.com
This information is vital for the public to hear so that they can prepare. I posted a link to your site on globalhousepricecrash in the hope that the few who make the time to inform themselves will be protected from the worst. Keep up the good work.
Keri Eagan
Anything Alternative
Interesting times are ahead. Thanks for keeping us informed!
Health, Fitness for Working People — Darryl Pace
Wow, very informative.
MissMentor
I agree that the government can not keep up with all the bailouts. Something has got to give.
Vicki http://www.bridal-threads.com
Interesting thoughts indeed about the future of the foreclosure market
something each individual and each family needs to think about and ponder
Happy Dating and Relationships,
April Braswell
Single Baby Boomer Dating Success Expert
By the time I come back I will try to find an article with some detail in it so I can that along.
There are foreclosure court cases all over the country being dismissed because the lending institution can not produce the original note and mortgage. This is a powerful defense in the hands of someone who has been brought to court by the bank.
Of course, most lawyers and judges are, through retainers, campaign contributions and past alliances in the pockets of the banks so its not a walk in the park, to make this defense successful but it is working around the country.
Martin O’Connor
http://smallbusinessdesigncenter.com
That is what we get for trying to band-aide things instead of fixing them. Great article.
Robert Martin
http://www.carbuyinghq.com
I certainly hope that banks have figured out how to deal with foreclosures by now. In 1992, my husband and I bought a foreclosure. It took the bank four months to close on the house. We were told that they just didn’t know how to sell a foreclosure! ??????
Lisa McLellan
Child Care Expert,
Babysitting Services, Babysitting Tips, Babysitters, Nannies
Things are looking shakier
Jose Escalante
http://www.joseescalante.com
Thats crazy info…. where’s my stimulus?
http://www.salesjunkie.net
http://www.scottpayne.me
I very nearly purchased a little house recently . . . then I decided, no, I’m going to wait until January when I expect the market to come unglued. then I can swoop in to snag exactly what I want at a price that suits me. When rental rates and purchase price are waaay out of whack, you depend upon the good grace of capital gains to justify your investment. That is not sustainable.
my little rental strategy isn’t looking so shabby after all
Katie
Almost assuredly the next 20 years will be a lot rougher than the last 20 years for the majority of people financially. When empires collapse and prolonged government ineptitude and mismanagement can no longer be covered up people find they need to adjust their expectations.
Steve Chambers, B2B Sale Trainer
Time to buckle down. Ther eis no better opportunity when everyone else is running for cover. Best time to go out and snatch market share!
I watched the precursor to this while doing research for my advisor in grad school. You should see the way the strips were priced . . . junk bonds at 13.75% were priced below market and some have been bailed out . . . yes, folks, we bailed out some high risk (chosen risk!), high yield investors.
Feels like stupid to me.
Kate
The future will be about going back to the basics.
Lynn Lane
Success Strategies For Life
But what about the “Commercial” Paper? You thought homes are bad.
Pete,
Commercial real estate is also a ticking time bomb set to explode on our banking system in the next 6-12 months.
Look at all the empty strip shopping centers and outparcels, and realize that retailers are hurting an looking for massive rent reductions. Not a pretty picture.
Rob
I agree with Lynne. We are all going to have to rethink how we conduct ourselves.
Jennifer Battaglino
The Harwood Center – Tinnitus, Chronic Illness, Fears, and Anxiety
We’re lucky in Melbourne, Australia where there’s an influx of 1,700 people coming to live here EACH week. Last year roughly the same time, it was 1,500 per week.
They all need somewhere to live. Short supply & high demand means we have property boom after the 2008 dip. Looks liek we have a “double top” in 2009 here.
John Ho
Numerology Expert Helps Understanding Personality for Better Influence & Persuasion