Housing Market in Much Worse Shape Than is Reported
Real Estate Consultant John Burns has looked at the housing data and reached a rather interesting conclusion: "The housing market has softened much more than is being reported.
Given all the negative news coverage, that's almost hard to believe. But John does a good job dissecting the data, and he is now concerned that both the publicly disseminated New and Existing Home Sales information is misleading. Even worse, he fears, is that policy makers are relying on this bad data to conclude that the housing market correction has not been too severe.[tags]real estate bubble, housing bubble, San Diego real estate bubble, San Diego real estate[/tags] San Francisco lawyers
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Even as a little as a few months ago, the real estate bubble deniers were still out in full force, saying that everything was going to be just fine. Now even the NAR is owning up to the trouble they’ve helped cause, and it’s probably a lot worse than they’re saying. New Jersey auto accident attorneys
This is the biggest housing slump in the last 4 or 5 decades: every housing indicator is in free fall, including now housing prices. San Diego laser eye surgery
The crisis is entirely the work of Fed Chairman, Alan Greenspan, whose “cheap money” policy caused a speculative frenzy in the real estate market which sent home prices through the stratosphere. In fact, the bubble originated in 2001 when Greenspan lowered interest rates to a meager 1%and ignited a refinancing boom as well as a sudden up-tick in home sales. Now, after 17 straight interest rate increases, the bubble is quickly losing steam and the effects are being felt from sea to shining sea. Rest assured, the sudden downturn in the housing market is just the first gust from an impending tornado. By the end of 2007, America’s match-stick economy will look like the rubble strewn landscape of New Orleans 9th Ward. cosmetic dentist San Diego
The secondary effects of the “1 out of 5” sub-prime default rate will be a chain reaction of rising interest rates and falling home prices engendering still more defaults, with the added foreclosures causing this real estate cycle to repeat. In my opinion, when the cycle is fully played out we are more likely to see an 80% default rate rather than 20%.
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Reports in the mainstream media tend to obscure the severity of the housing bubble. Typically, the articles are full of “Sunny-Jim” claptrap about a “rebounding market” that is suddenly “correcting” after an explosive decade of growth.
Readers should not be taken in by this type of hype. A careful reading of the facts indicates that, “rather than foreshadowing a quick rebound, the news high-lighted how fragile the residential construction remained and suggested that the downturn rattling the housing market has not run its course.” (NY Times)
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