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

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Wow, The Worst Real Estate Market In More Than Two Decades - By: Jennifer Stromsteen, Posted on: 2008-05-04

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 dry up. Sales dropped another 8.5 percent in the latest month to an annual rate 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, peaking at the rate of slightly over 1.3 million annual new home sales in July of 2005.

I was particularly impressed with this bit 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 gone 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 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 merely a risk of prolonged recession. Those numbers are absolutely terrifying. Building contractors are failing by the boatload. Jobs have 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 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, at best. I would assing their predictive abilities at 0/0.

Home buyers are just about shut 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 qualify for a mortgage loan.

The economy is crashing. Derivatives abuses by Wall Street have raped the financial system of the globe. The dollar will be diluted continually with each passing month as the Wall Street insiders get bailout money in “small” amounts of $50 to $75 billion at a time. 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.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.