We’re not Doom and Gloomers because we want to be. We’re gloomy on the economy and doomy on the end result because all of the signs we’re seeing suggest no good can come of our current situation and the attempted patchwork from the Obama administration, Fed and Congress.
Michael Panzner of Financial Armageddon, which brought the below article to our attention, isn’t very optimisitc either, and for good reason:
…every time I look around, it’s hard not to see that so many of the problems that got us to this point have not gone away. Indeed, one big contributor to the mess, an inflated real estate market, remains a festering sore.
The Housing Market Recession is Not Over:
Why you shouldn’t be overly optimistic about real estate right now
After years of hearing how home prices are plummeting and foreclosures are mounting, consumers want to feel hopeful about the housing market â€” but maybe they’re being too optimistic.
In a presentation to the National Association of Real Estate Editors in Austin, Texas, last week, Stan Humphries, Zillow.com’s chief economist, pointed to four myths he said consumers are latching on to as they try to make sense of recent housing statistics.
The four myths:
1. The housing recession is over. It’s not, Humphries said. He estimates the bottom in home prices won’t come until the third quarter, at least from a national perspective. Doug Duncan, chief economist at Fannie Mae and also a speaker at the conference, agreed with that estimation.
2. After markets hit bottom, prices will rebound to boom levels. Not going to happen, at least for a while, Humphries said. “Once we hit bottom, the bottom is going to be a long and flat affair across the markets,” he said. “What we’re going to see once we hit bottom is the second phase of the housing recession… that second phase is one of being flat.”
3. The worst of the foreclosure mess is behind us. More wishful thinking, according to Humphries. He estimates foreclosures will peak later this year, then remain elevated for a while. Rick Sharga, senior vice president of RealtyTrac, an online marketplace for foreclosure properties, said he doesn’t envision foreclosure activity stabilizing until late 2011.
4. The tax credits saved the housing market. With or without a tax credit, those who bought would have done so anyway, Humphries said. “The biggest impact [in home sales] we believe were low prices… low interest rates and the unsung factor here is the ramped up lending by the Federal Housing Administration.”
Still, it’s easy to understand why many homeowners want look on the bright side.
“They went from what everyone thought was a lucrative asset to something worth a lot less than they owed on it,” said Douglas Culkin, president of the National Apartment Association, in a phone interview. “We all want it to get better,” he said.
Some want to finally sell their homes and move on with their plans. And homeowners are tired of thinking their houses are bleeding equity, losing value like a new car driving off the dealership lot.
As for prospective home buyers, even if consumers are feeling confident enough to take an extra trip to Wal-Mart these days, many are not going to jump in and spend on a large-ticket item like a house, said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling.
“The reality of the situation in which we find ourselves today has sunk in with people,” she said in a phone interview. “If a foreclosure hasn’t been a part of their life, it has been a part of someone else’s life… and they’ve seen the pain that inflicts on the family.”
That perception isn’t going to fade quickly.
It makes sense to be gloomy
Despite statistics showing some housing-market improvement, there’s still good reason for pessimism.
increasing population, illegals, outsourcing, insourcing labor,Â insourcing manufacturing,Â importing free trade goods made by child labor, etc….etc…
america will never be the same….never.
Remember this, always.
In life, persons don’t get what they want, always; but always, they get what they deserve.
Americans have lived phony lives riddled self-deluding false beliefs about their worth.
They swap value had been propped up by years of credit expansion.
The spell has worn off and reality becomes further revealed each day.
In a globalized world withÂ interlinked economies, ever changing valuation worth for things of wealth arises.
The world is saying that Americans are worth far less then Americans believed about themselves.
When Americans controlled the flow of wealth, Americans were richer. Â Now that Chinese, Hindians, Brazilians, Chileans and others have entered into the game, revaluation is happening.
All Americans fixed wealth is falling in worth and thus swap values, (e.g., houses for money, money for houses) because all Americans labor wealth has fallen.
Capital amplifies labor. Labor is a form of wealth and capital. Chinese, Brazilians, Hindians, Chileans — growth foreignersÂ are being amplified with capital (tools) at a rate much faster than Americans.
Thus, growth foreigners swap values are increasing, their worth increasing, while the swap value of Americans are declining.
The realty bubbles of 1997-2000 and 2002-2006 Â masked this truth from most Americans.
The Obama Administration of the U.S. along with the Pelosi-Reid era Congresses try to mask this truth from most Americans.
The above posters do not get it.Â Yet anyway.
I can not get into the article with BP and coffee Mac.
Sorry smack macdougal,
you are correct. I spent 14 hours of study of Revelations yesterday, BUT…..I do not want to build a shelter anymore!
Smack: Have to disagree with you. Sometimes people get more than they deserve and sometimes they get less. Life is not an equal imput / equal output machine. Life is full of surprises. Some good, some not so much.
The control of wealth and capital, is outside the jurisdiction of most Americans because they have been consumed by enjoying life rather than paying attentionÂ to it. Capital flows to that opportunity where it can generate the greatest wealth; all other characteristics (like taxation) being equal.
The real estate bubble in the US is a good example. Builders kept building and lenders kept loaning (because that is what they do) even when the demographics showed well in advance, that the party was over. They took risks on the assumption that it would be the other guy who would lose. Just another variation of the “bigger fool theory” used by some raw land bankers who thought that a bigger fool would come along and pay more money for their raw land. It doesn’t always happen.
Banksters did the same thing. The difference was that they were bailed out, while not going to jail. Â A good example of someone getting more than they deserved, I think.