27 July 2010
Business/Economic/Housing/Layoff News for July 28, 2010
Coming Up . . . A Decade of Declining Home Prices
The Church, The Peak, And My Old Watch
Congressman Bernie Sanders: "No To Oligarchy"
Welcome to Bank Owned Las Vegas: Nevada's Economic Misery May Be America's Future
Gift From Fed Stops as Profits Shrink at Banks Led by JPMorgan
The End Is Near Unless Women Take Control Of Wall Street
The Death of Paper Money
Chinese banks may be on the hook for hundreds of billions of dollars worth of unpayable Chinese construction loans
Apartment Rentals Surge in U.S. on Home Foreclosures, Job Gains
Census: Moves because of evictions increase
'Systemic risk' theory gains in stature as way to prevent the next bubble
Local Governments To Cut 500,000 People In 2010 And 2011, As $400 Billion Budget Shortfall Brings State Economies To A Halt
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3 comments:
The article about Vegas was chilling. I'm a Key West resident and on the market to buy here. I have a decent budget, but I'm holding off. I think there are foreclosures and delinquents in KW that the banks haven't put on the market. I've had some other locals tell me they know of people here who've been living in their homes more than 2 years without paying their mortgage. The shoe has got to drop here even more, I think. I hate that people are losing money, but I'm not going to pay a premium b/c others have been so willing to overpay the past few years.
Love your blog.
I agree with you that prices here have got to drop more, and yes, the Las Vegas piece is an excellent example of what can happen . . . and is already happening . . . in other Bubble areas of the USA and the planet.
In my opinion, this is a time to rent, not buy. This is a time to pay off debt (credit cards, a car purchase, etc.), to retract your horns, to learn how to live below your means and preserve cash.
There are too many artificial housing "props" which have just been discontinued. This loss of incentives will slow sales and lower pricing in the near future and for many years to come.
Eventhough Case/Shiller recently came out with higher median prices and more sales for Spring 2010, what wasn't explained in the Mainstream Media was how many of those sales were on homes where the buyer was rushing to get the now discontinued homebuyers tax credit AND how many of the condos and developments are being bought outright by vulture funds who pay cash for whole buildings so as to "control" the shadow inventory in the future.
I firmly believe anyone buying these foreclosures and bank owned properties today will rue their decision 10 years from now.
Lastly, an excellent story which coincides nicely with the Las Vegas piece was the one at the top of the list:
http://www.informationclearinghouse.info/article26023.htm
It is a story showing you how "Shadow Inventory" all over the USA has been purposefully kept off the MLS rolls so as too not damage housing prices to quickly. In essence, the banksters and Realtors are in on this new game whereby inventory will be released a little at a time, just like the air in a tire when you check it with an air gauge and discover it's overinflated a few pounds. The banksters and Realtors are trying to juggle this immense, unaccounted for inventory (by unaccounted, I mean it's not shown on any MLS) and as prices slowly creep downward, they will release a little inventory, hold back a bunch, and release a little more sometime later and repeat, repeat, repeat.
The problem with this type of plan is one four letter word: JOBS . . . or lack of. This Great Recession is going to be a jobless recovery, IMO.
Keep an eye out for some highlighted links covering the "jobs" future for America in tomorrow's blog. I'm working on it right now. One piece is by Robert Reich. The other is by a Motley Fool poster.
If you read enough macro-economic stories to get the feel of the land, you know a recovery in Housing to Bubble top prices is very unlikely in our lifetimes.
By the way, the URL was truncated to the story I was trying to link you to. Simply click on the top story in the lineup which is titled
Coming Up . . . A Decade of Declining Home Prices
Rock, over and out
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