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Wow, The Worst Real Estate Crisis In More Than Two Decades

Purchases of new homes in the U.S. plunged more than forecast in March to the lowest rate in almost 17 years as tighter loan qualifications and falling prices caused buyers to dry up. Sales dropped another 8.5 percent in the latest month to an annual pace of 526,000, the fewest since October 1991, from a 575,000 pace the previous month, the Commerce Department announced today in Washington. From December 2002, until December 2006, sales of new homes exceeded one million per year, peaking at the rate of a little over 1.3 million annual new home sales in July of 2005.

I was particularly dumbfounded with this gem of wisdom as stated in a Bloomberg news story today, “The threat of a prolonged recession is growing as lower home values constrain consumer spending and persistent declines in homebuilding subtract from economic growth.”

Gee, aren’t they geniuses?

We’ve went from a rate of 1.3 million new homes sold annually in 2005 down to just over 526 thousand annually as of 3 years later. Housing construction accounts for almost one fourth of the economy. It is a huge portion of our economy. And the new housing industry has collapsed by 60% in a 3 year period. The mainstream news media presents those figures as indicating merely a risk of prolonged recession. Those numbers are absolutely horrible. Building contractors are failing by the thousands. Work has dried up for tens of thousands of tradesmen. And this is described as only a risk of recession?

Don’t rely on the geniuses in the financial news to warn you of the real truth, that this country is headed for an economic depression. I would rate their hindsight at 20/60, and that is being generous. I would assing their predictive abilities at 0/0.

Home buyers are just about locked out of the real estate market. Extremely tight lending standards make it almost impossible for all but those with impeccable credit and tens of thousands of dollars sitting around idly in a bank account to get approved for a mortgage loan.

The economy is crashing. Derivatives abuses by Wall Street have ruined the financial system of the world. The dollar will be watered down constantly with each passing week as the Wall Street fat cats get bailout money in “small” amounts of $50 to $75 billion at a whack. And as a result everything will cost more.

Get prepared while there is still time, the worst is yet to come.

Article Source: http://www.articlemap.com

J Stromsteen has many years experience in the finance, real estate, and insurance industry. She writes for the website Bush's Depression as well as first time home buyer to provide up to date information on the unfolding real estate crisis.

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