Wow, The Worst Real Estate Crisis In More Than 25 Years

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Wow, The Worst Real Estate Crisis In More Than 25 Years - By: Jennifer Stromsteen, Posted on: 2008-05-04

Purchases of new houses in the U.S. plunged more than forecast in March to the slowest level in nearly 17 years as stricter loan qualifications and falling prices caused buyers to disappear. Sales dropped another 8.5 percent in the latest month to an annual pace of 526,000, the slowest 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 were more than one million per year, reaching a peak at the rate of a little over 1.3 million annual new home sales in July of 2005.

I was particularly dumbfounded with this jewel 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, are they geniuses or what?

We’ve went from a rate of 1.3 million new homes bought per year in 2005 down to just over 526 thousand per year as of 3 years later. Housing construction accounts for almost a quarter 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 views those figures as indicating only a risk of prolonged recession. Those numbers are absolutely horrible. Home builders are failing by the thousands. Work has dried up for tens of thousands of tradesmen. And this is presented as merely a risk of recession?

Don’t rely on the wizards 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 to be 20/60, at best. I would rate their foresight to be 0/0.

Home buyers are just about locked out of the housing market. Extremely tight lending standards make it nearly impossible for everyone but those with impeccable credit and tens of thousands of dollars sitting around idly in a bank account to qualify 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 continually with each passing month as the Wall Street fat cats get bailout cash in “small” chunks of $50 to $75 billion at a whack. And as a result everything will cost more.

Prepare yourself while there is still time, the worst is still ahead of us.

Article Source: http://www.girlarticles.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.