This Is The Worst Real Estate Market In More Than 25 Years

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

I was particularly dumbfounded with this gem of wisdom as reported 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, are they geniuses or what?

We’ve went from a rate of 1.3 million new homes bought 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 shrunk by 60% in a 3 year period. The official news media views those figures as indicating merely a risk of prolonged recession. Those numbers are absolutely horrendous. Home builders are going under by the boatload. Jobs have dried up for tens of thousands of tradesmen. And this is described as merely a risk of recession?

Don’t rely on the geniuses in the financial media 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 rate their predictive abilities at 0/0.

Home buyers are just about locked out of the housing market. Extremely restrictive lending standards are making it nearly impossible for everyone but those with perfect 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 globe. The dollar will be diluted 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 still ahead of us.

Article Source: http://www.rightarticle.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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