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Evidence The Housing Bubble Is Bursting?: “Home Sellers Are Slashing Prices At The Highest Rate In At Least Eight Years”

Michael Snyder
September 25th, 2018
The Economic Collapse
Comments (37)
Read by 2,749 people

This report was originally published by Michael Snyder at The Economic Collapse

The housing market indicated that a crisis was coming in 2008. Is the same thing happening once again in 2018?  For several years, the housing market has been one of the bright spots for the U.S. economy. Home prices, especially in the hottest markets on the east and west coasts, had been soaring. But now that has completely changed, and home sellers are cutting prices at a pace that we have not seen since the last recession. In case you are wondering, this is definitely a major red flag for the economy. According to CNBC, home sellers are “slashing prices at the highest rate in at least eight years”…

After three years of soaring home prices, the heat is coming off the U.S. housing market. Home sellers are slashing prices at the highest rate in at least eight years, especially in the West, where the price gains were hottest.

It is quite interesting that prices are being cut fastest in the markets that were once the hottest, because that is exactly what happened during the subprime mortgage meltdown in 2008 too.

In a previous article, I documented the fact that experts were warning that “the U.S. housing market looks headed for its worst slowdown in years”, but even I was stunned by how bad these new numbers are.

According to Redfin, more than one out of every four homes for sale in America had a price drop within the most recent four week period…

In the four weeks ended Sept. 16, more than one-quarter of the homes listed for sale had a price drop, according to Redfin, a real estate brokerage. That is the highest level since the company began tracking the metric in 2010. Redfin defines a price drop as a reduction in the list price of more than 1 percent and less than 50 percent.

That is absolutely crazy.

I have never even heard of a number anywhere close to that in a 30 day period.

Of course the reason why prices are being dropped is because homes are not selling. The supply of homes available for sale is shooting up, and that is good news for buyers but really bad news for sellers.

It could be argued that home prices needed to come down because they had gotten ridiculously high in recent months, and I don’t think that there are too many people that would argue with that.

But is this just an “adjustment”, or is this the beginning of another crisis for the housing market?

Just like a decade ago, millions of American families have really stretched themselves financially to get into homes that they really can’t afford. If a new economic downturn results in large numbers of Americans losing their jobs, we are once again going to see mortgage defaults rise to stunning heights.

We live at a time when the middle class is shrinking and most families are barely making it from month to month. The cost of living is steadily rising, but paychecks are not, and that is resulting in a huge middle class squeeze. I really like how my good friend MN Gordon made this point in his most recent article

The general burden of the American worker is the daily task of squaring the difference between the booming economy reported by the government bureaus and the dreary economy reported in their biweekly paychecks. There is sound reason to believe that this task, this burden of the American worker, has been reduced to some sort of practical joke. An exhausting game of chase the wild goose.

How is it that the economy’s been growing for nearly a decade straight, but the average worker’s seen no meaningful increase in their income? Have workers really been sprinting in place this entire time? How did they end up in this ridiculous situation?

The fact is, for the American worker, America’s brand of a centrally planned economy doesn’t pay. The dual impediments of fake money and regulatory madness apply exactions which cannot be overcome. There are claims to the fruits of one’s labors long before they’ve been earned.

The economy, in other words, has been rigged. The value that workers produce flows to Washington and Wall Street, where it’s siphoned off and misallocated to the cadre of officials, cronies, and big bankers. What’s left is spent to merely keep the lights on, the car running, and food upon the table.

And unfortunately, things are likely to only go downhill from here.

The trade war is really starting to take a toll on the global economy, and it continues to escalate. Back during the Great Depression we faced a similar scenario, and we would be wise to learn from history. In a recent post, Robert Wenzel shared a quote from Dr. Benjamin M. Anderson that was pulled from his book entitled “Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946”

[T]here came another folly of government intervention in 1930 transcending all the rest in significance. In a world staggering under a load of international debt which could be carried only if countries under pressure could produce goods and export them to their creditors, we, the great creditor nation of the world, with tariffs already far too high, raised our tariffs again. The Hawley-Smoot Tariff Act of June 1930 was the crowning folly of the who period from 1920 to 1933….

Protectionism ran wild all over the world.  Markets were cut off.  Trade lines were narrowed.  Unemployment in the export industries all over the world grew with great rapidity, and the prices of export commodities, notably farm commodities in the United States, dropped with ominous rapidity….

The dangers of this measure were so well understood in financial circles that, up to the very last, the New York financial district retained hope the President Hoover would veto the tariff bill.  But late on Sunday, June 15, it was announced that he would sign the bill. This was headline news Monday morning. The stock market broke twelve points in the New York Time averages that day and the industrials broke nearly twenty points. The market, not the President, was right.

Even though the stock market has been booming, everything else appears to indicate that the U.S. economy is slowing down.

If home prices continue to fall precipitously, that is going to put even more pressure on the system, and it won’t be too long before we reach a breaking point.

***

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

GetPreparedNow-MichaelSnyderBarbaraFixMichael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream

If you want to know what is coming and what you can do to prepare, read his latest book Get Prepared Now!: Why A Great Crisis Is Coming.

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Author: Michael Snyder
Views: Read by 2,749 people
Date: September 25th, 2018
Website: http://theeconomiccollapseblog.com/

Copyright Information: This content has been contributed to SHTFplan by a third-party or has been republished with permission from the author. Please contact the author directly for republishing information.

37 Comments...

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  1. southside says:

    Good! Now maybe I will be able to afford something

    • durangokidd says:

      “According to CNBC, home sellers are “slashing prices at the highest rate in at least eight years”…

      No surprise. Some of you may remember that I told this community more than a month ago that prices were declining in the major markets and the ones I followed in the West where sellers were dropping asking prices …. and have been since late last year.

      Just another sign of a coming CORRECTION and the end of the business cycle. Nothing to see here …. move along. 🙂

    • Sgt7 says:

      except when you go to look, all thats left from the bubble, are junk houses that were over priced from the initial listing months ago. THATS why houses are coming down in price. We are shopping now, can find alot in our price range, but nothing suitable, picking from houses that have 100+ days on the MLS, failed inspections, nieghbors from hell, as is (no repairs) etc. These are the sloppy seconds of houses where owners tried to cash in on 50% or more property value increases, but what they are trying to sell is junk that no one wants, now the market os headed downward, they are slashing prices.
      Premo houses are still commanding & getting premo prices.

      • durangokidd says:

        “except when you go to look, all thats left from the bubble, are junk houses that were over priced from the initial listing months ago.”

        Not true.

        I specifically follow the high end of the housing market: McMansions if you will, as these are the proverbial canaries in the coal mine. The high end market erosion that began months ago signaled the coming recession. There are many quality, high end and mid tier homes available: and their price is dropping.

        Wait until after the first of the year to buy.

        The smart money always moves first. That’s why they have the most money. The wanna bees are always the last to act; which is why they are more often than not, caught with their pants down pissing into the wind, when market conditions change.

        China is the perfect example. The US had been encouraging China (forcefully, but nicely) to alter its economy from an export driven model to a mature, interior focused one for more than a decade. US requests fell on deaf ears.

        Now China will pay the price. Pigs are always the last ones to leave the trough, fat & sassy. They are the ones most likely to be slaughtered.

        And deservedly so. 🙂

        • Sgt7 says:

          Umm..what I stated is true – for this area, maybe yours is different but that doesn tmake my statement and expereince false, now does it? Im in the South Seattle,WA area, which was in the top 3 hot housing markets for 2017-2018 in the entire country, with homes that sold for $200k in 2014 now selling for $500k and the average price at $750k+! I dont “follow” it, Im in it, having just sold one in Aug and now looking to buy again. Homes we viewed even last week, we found less than ideal, are coming down in increments of $10k or more…these are the same homes that have been passed over by buyers for months on the MLS..its not my “opinion” its a fact, backed up by listing time & property history reports which are viewable right on redfin.

  2. goofygal says:

    it has been a sellers market, which encourages the owners to gouge the buyer with a higher price. Lets not have any offers nationwide for two weeks and see what happens to prices.

  3. Maranatha says:

    Nope, not good whatsoever. Realize that up to 31% of American millennials live with mommy and daddy in a basement…and they are not martied. That. means an entire generation has LESS demand for housing in the form of single family dwellings. That has to harm the value of that niche of real estate.

    Even if these unfortunates get married, they are scraping by on wages that due to inflation are most often worth half as muchas 1990 dollars. Thus these are future RENTERS who will never save up a down payment.

    Then morons in Congress will vote to extend them special guaranteed mortgages which is how we got into the idiotic sub-prime mortgage scandal and innumerable foreclosures.

    The new niche market will be older rural farmehouses where you have three generations living on the farm and working it. This was the NORM from Jamestown and up to the American colonial period through to 1940. That is where we are headed. Deeds will pass to heirs and house payments will decline as fewer and fewer will buy homes.

    Less millennial births mean less citizens born in America. Only idiots and traitors will allow more illegal immigrants and legal immigration when we lack adequate jobs for them. We are in an economic decline where despite improvements by Trump turning around the debacle of Obummer, it will take decades to recover.

    There is no quick fix. We are like starving prisoners of war given liberty, and our wasted muscles take time to be restored to health. It took 18 years of globalist nonsense accepting Free Trade to resturn to normalcy.

    • Infidel says:

      Not everyone is meant to own a home. Or go to college. The country needs ditch diggers too.

      • Maranatha says:

        Yeah but illegal aliens dig the ditches.

        High school guidance counselors told every dimwit to go to college. That’s why starting in 2000 the universities were upset and had to basically teach remedial courses in Algerbra and English. They were sending totally unprepared kids to college. You had irate chemistry professors who were furious because sophomores used to take Chemistry in high school, YET college freshmen were unable to balance chemical equations.

        These are the typical kids who were C students who then worked on production lines in industry. But most of these jobs are gone.

        Now you educated graduates working as barista and clerks in bookstores and waitresses. Well these jobs don’t pay squat,nor should they, and so they will effectively be renters when irate parents finally kick them out of the house.

        It’s a powderkeg. The participatory trophy generation are materialists but have no money. Thus they will eventually REVOLT. They are declared socialists but near Marxists and so the constitutional republic is in peril.

      • durangokidd says:

        Sure. That’s why the PTB have facilitated the invasion of America by 40 million foreign nationals with a 6th to 8th grade education. 🙁

  4. Anonymous says:

    Housing, real estate in general along with related construction, is always priced somewhere within a boom or bust cycle.

    It goes from the lows of the cycle to whatever high the market will bear, and then corrects downward to whatever the market is willing to pay as new construction increases to meet demand only to start the whole cycle over again as a growing population eventually provides more demand than supply can fill and new construction starts anew.

    Then, with a renewed price rise, small speculators joining in on the “jump on the bandwagon” rises and the prices again rise till it hits the new high that the market will bear again.

    Recognize this trend when you buy and sell if you are an amateur investor, a house flipper as such, and especially if you are buying a home to live in for an extended period.

    FWIW, interest rates play a big role in this as they significantly affect the monthly payment amounts that most people buy on.

  5. Gotta call bullshit, house next door sold in one day with bidding war going on. They got 25k over what they asked

  6. I'll Fight Your Mom says:

    Let it pop. I have a pin if you need it. The economy needs a total reset which will restore real wages, real prices, real financial transparency and hopefully justice to those who have created the ponzi scheme messes and policies.

  7. Boyo says:

    25 years ago when I moved in, in the area it was not uncommon for houses to show sold signs in 2-5 days. Every time.

    The number of houses for sale has been on an uptick for years and they’re stay on the market for months. Some for months then the sign is gone and back up a month or two later.

    Definitely an uptick in foreclosures as well as several boarded up.

  8. rellik says:

    Everybody has to have some sort of shelter somewhere, even if it is a tent under I5 in Seattle. Prices are what the market can bear in a particular area. Prices go up and down. One of my neighbors paid 850K for a house that today would sell for 700K.
    Did he lose money? Not yet, because he still has a really nice house. It is a tangible asset. I bought my house for 185k. I built my daughter a house on my property and I put up a 2400 SF storage shed. My property and buildings are now worth over 800K. So what? I have a place to live, it is not a piggy bank. Value could drop to zero( I should be so lucky Tax wise), I don’t care. I have two places to live and are paid for. That is why you buy a home, to have a place to live. The fact that it varies in value is secondary to its main purpose. You almost never will lose money in real estate if you are patient and don’t build atop an active Volcano.

  9. Maranatha says:

    https://www.realtor.com/news/trends/multigenerational-housing-rising/

    This is your future and it was your ancestor’s past.

    1 in 5 Americans live in a multigenerational housing. That 60 million Americans. And it’s not just due to having children either as the birthrate has been declining. People are retiring and getting older and staying home. They can’t afford a nursing home and don’t need one for some time. And when people do enter a nursing home, the average stay is 1-2 years though some persist and it’s awful.

    They want to be home. And a third of millennials can’t even afford to get married. I believe the chief logical reason is American industry has been worse than decimated and thus this generation has far less occupational opportunities. This puts a big responsibility on Boomers who are caring for aging parents and their adult children.

    But historically it was the norm, say during the Great Depression and up until the GIs returned from WW2. At that point, many had savings and industry was booming, and the suburbs began. They were not like the suburbs today,but inexpensive tract housing on the periphery of cities.

    It wasn’t until “white flight” in urban regions starting in the eighties where couples fled the extreme urbanization that made old historic downtown regions to be unsafe…mostly due to gang violence from drug sales and prostitution. Rap and hiphop rose in prominance because gang violence was normalized.

    That created wealthy suburbs where higher property values spread out and caused larger tax revenues and these got annexed by cities with infrastructure like utilities and fire stations.

    Then morons post2000 started buying homes with 4-6 bedrooms and 4 bathrooms and these crazy homes that were mansions that were ridiculous. As birth rates declined with a huge loss in American industry, just who was going to buy these homes bought as investments??? People feared market losses and bought property with the profit so it was free and clear.

  10. Jim in Va. says:

    Nobody makes you buy a house. Most people buy too much house and spend more than they need to. Mine is paid for and I’m dying here so I’ve lost nothing. Would you rather rent an over priced apartment? Maybe buy further from your work space(probably cheaper)and just what you need. More house is more maintenance and taxes. Your choice.

    • rellik says:

      I’ve been a tenant, landlord, and homeowner.
      Renting SUX!
      Listening to a tenant bitch about the
      toilet his child stuffed a teddy bear in and overflowed
      SUX!
      When your water pump fails at 3AM and you have to spend
      $700 for and install a new one, is homeownership.
      I’ll take homeownership and ordered a spare water pump.
      After I made repairs.

  11. It is simple. Get rid of the Central banks and there will be no interest or taxes.

    Ha.

    🙈🙉🙊🐥🦆🐔🦁🦊🐯🦋🐌🐣

    All the people who think a crash will fix everything are deluded. If things are bad now, if and when their is an economic crash everything will be worse for all but the wealthiest.

    _

  12. We are starting to see price drops on homes in the Denver Metro area the last two weeks….but it isn’t nearly enough. Still homes are priced close to double their actual value. I hope it all pops big time and that I still have work.

  13. Westcoastdeplorable says:

    Expect house prices to drop 50% when mortage rates hit 6%. They’re over 4% now and that’s with 20% down.

  14. aljamo says:

    Good, let everyone live in shantytown shacks to jump start the needed peoples revolution in America. It is way beyond time for real change rather than this manufactured tyranny to benefit the few.

  15. Jessie says:

    Millenials are fleeing California to move to the deplorable states. Hillary Clinton got it all wrong. CA will be a brown 3rd world state before long with crime all over.

  16. Maranatha says:

    So what happened? Free Trade and massive inflation due to deficit spending especially outrageous military expenditures that did not gain us ANY territory as we gave back all territory after 1898. What buffoons!

    There is no American empire.

    Two things happened in WW2.
    1. The federal government illegally entered the war, but to do so required every possible man to enter the war, largely as infantry.
    2. But that meant we needed women to work in factories breaking major societal taboos.

    So the result was we doubled our workforce after 1946 as many women kept working. Of course this severely damaged marriage as an institution. It created a massive consumer culture. It spurred on home ownership in the suburbs meaning tract housing and these were single family dwellings.

    There weren’t many realtor before WW2. Then there had to be.

    That worked until the globalists blew up the American economy with NAFTA under Bill and Hillary Clinton. It shocked labor Democrats as it killed blue collar jobs. Then GATT followed.

    So today, do the math. Visit an official government inflation calculator. A single guy in 1990 made more in pay (not even including way better benefits) than a husband a wife in 2018. The globalists have cut real wages in HALF due to inflation.

    That is why the Millennials have no decent industrial jobs. That is why places like Walmart killed all the mom and pop hardware stores and retail shops. When industry died it affected every business that relied upon blue collar customers.

    Now 31% of Millennials are not buying homes. This isn’t rocket science.

  17. kay123 says:

    CNBC is hardly a barometer.
    Yes, homes in high crime areas are stagnant.
    Nobody wants them.
    Homes in racially diverse neighborhoods area
    a risk to buy. As we see polarizing, then gun fights.
    Obumhole forced ghetto dwellers into
    White Middle Class rental properties to polarize
    tribal, “gimme-dats.” to neutralize strong conservative
    voters, and to terrorize them with drugs, crime and
    anarchy. So he is still reaping what terrorisum he
    designed.
    Then he overloaded invaders on our job markets so now
    NOBODY CAN AFFORD HOMES.
    You liberals, and “Gimme-Dats’ made this possible so
    so stop with the “POOR ME” attitudes. This is your
    votes at work. Enjoy !!
    Your boy, Obumhole made your bed, just for you..
    now lie in it……and shut your pie hole!!!!

  18. kay123 says:

    Maranthon….. Sometimes you are right.
    WWII WAS NOT AN ILLEGAL WAR.
    We were attacked first and THEN WE “RETALIATED” against
    Japan.
    I don’t know where you studied American History (?) but it was
    provoked and we defended ourselves.
    Vietnam (under Lyndon B. Johnson D-Texas) may have been
    illegal…..and 53,487 US millitary men died…..AND FOR WHAT??
    It killed good men, fathers, husbands on (both sides)…
    and what did we gain?? NOTHING!!!
    Our servicemen were hated by everyone here in USA…For nothing!!!

    • Maranatha says:

      NO Kay. In 1939, FDR began a program to support the Chinese in Manchuria who were occupied by the Japanese. That program sent advisers who were aviators who actually ran missions in recon and in engagements versus Japan. It ran unofficially and was called the Flying Tigers. Look it up. This is one of the reasons the war was illegal as Pearl Harbor was NOT a sudprise attack whatsoever on December 7, 1941. The Imperial Japanese Navy was paying us back for our guerilla war assistance.

      Likewise there were two neutrality laws that prevented us entering the war. But FDR sold armaments illegally to the UK because of Churchill. Read a history book. Hitler actually didn’t want the Battle of Britain to happen. There were Nazi supporters in England, which is why Rudolph Hess flew there. The Battle of Britain was a stalemate despite Luffewaffe air superiority because the Germans did NOT want to invade.

      What you were taught in school was propaganda. The Battle of Nanking for example was studied by Chinese historians and after a decade of research, they found evidence of only 17,000 civilians killed. Look it up. Yet the official declared casualties started at 50,000 to as high as 350,000. It’s a LIE…and it was used to get the USA in the war in the pacific.

    • Maranatha says:

      http://www.historynet.com/american-volunteer-group-claire-l-chennault-and-the-flying-tigers.htm
      Start reading here. The Flying Tigers were fighting the Japanese way before Pearl Harbor…at least 1937 and probably earlier fighting an illegal war.

    • Maranatha says:

      https://www.u-s-history.com/pages/h4319.html

      Read some actual US history. Here it details the Neutrality Acts which FDR violated as Congress had no intention of entering into a war with any of the Axis powers.

      But FDR broke these laws to sell armaments to England.

      Heck, this is even featured in one of latest Churchchill films. It’s hardly a secret.

  19. Morris says:

    I live in upstate South Carolina and housing prices have gone up around 10% within the past two years.
    They’re selling new houses as quick as they can build them.

  20. Gosh I was a couple paragraphs into the article and I literally began hearing Micheals voice in my head. So I checked and sure enough it was him. I remember his last article when he was crying about expensive barbeques and felt a little sorry for him getting so much criticism. Ive actually followed the guy for a number of years and would have voted for him had I lived in Idaho. But all this complaining about tarrifs sounds like a bunch globalist neo con Talk to me. If he does not support the president on the economy what does he suport him on? Though I personally give good marks to Trump on the Bill of Rights he is certainly far from being a strong libertarian.

    Will the tarrifs maybe cause prices to go up on foriegn goods? Maybe. I bought a bunch of sweat shirts and hoodies two years ago in preparation. It may take a little while to get our manufacturing and textiles going but imo by all means tax through tarrifs the foriegn stuff. Its better than taxing me.

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