US Housing Crisis Is Now Worse Than Great Depression: 'Official'

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posted on Jun, 14 2011 @ 11:47 PM
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It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.

Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.

The news comes as the Federal Reserve considers whether the economy has regained enough strength to stand on its own and as unemployment remains at a still-elevated 9.1 percent, throwing into question whether the recovery is real.

"The sharp fall in house prices in the first quarter provided further confirmation that this housing crash has been larger and faster than the one during the Great Depression," Paul Dales, senior economist at Capital Economics in Toronto, wrote in research for clients.


US Housing Crisis is now Worse than Great Depression

This may be common knowledge, but still worth mentioning on the GM forum. Does the health of the housing market reflect the health of the broader economy?

In other news from China regarding their real estate outlook: S&P Cuts China Property Developers to 'Negative'


Chinese developers’ outlook was cut to “negative” from “stable” by Standard & Poor’s, which said tighter credit and further government curbs may lead to rating downgrades in the next year.

Property sales may start to slow as the government’s policy “starts to bite,” leading to price cuts that may drive home prices 10 percent lower in the next 12 months, the credit rating company said. Hong Kong’s real estate market faces the risk of a “sharp correction,” S&P also said in the statement today.
edit on 14-6-2011 by surrealist because: Spelling errors




posted on Jun, 15 2011 @ 12:05 AM
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Yes, BUT.

We aren't having massive numbers of newly homeless people wandering the country and living in cardboard villages like in the Great Depression.

So it means the artificial prosperity bubble has burst. It means too many people were buying houses they could never really afford, and too many houses were built on speculation. That stinks.

But it's not the same as the GD. Not yet.
edit on 15-6-2011 by Schkeptick because: (no reason given)



posted on Jun, 15 2011 @ 12:06 AM
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Meanwhile, property developments in Australia aren't looking too peachy either. The difference here is though, that Australia has room to influence property prices with monetary policy and lower interest rates - which stand at some of the highest in the developed world. But then, Glenn Stevens has just announced Australia needs yet another hike in interest rates due to possible increasing inflation. I will withhold my personal rant on that here....

Median house prices plumment in high-end suburbs


AUSTRALIA'S super rich aren't immune to the property downtown with real estate performance in battler suburbs outstripping the country's wealthiest postcodes.

The property divide between the blue-ribbon belt and struggle street has narrowed significantly as interest rates and homebuyer jitters continue to erode the top end of the market.

Median house prices in prestigious suburbs fell up to 43 per cent since peaking in 2008, according to RP Data figures out today.

Property experts predict that the performance slide in salubrious enclaves could continue for at least three years, as luxury home buyers remain sidelined in what is one of the most overpriced real estate sectors of the world.

And while price slashing may attract bargain hunters, pundits warn that the premium home market is riskier than ever due to the soaring Aussie dollar and the volatile share market.


This pro perty news article reports on the struggles of households with mortgage stress due to increasing interest rates and natural disasters, with Queensland making history as Australia's worst state for mortgage defaults.

I admit, as a struggling mortgage holder myself, having bought at the exact WRONG time, I am now paying the price. I bought an old 70s unit in Canberran suburbs, and is by no means a luxury item, and paying on the mortgage is a real struggle. Fortunately I have family to assist with some bills and stuff otherwise I wouldn't be able to do it. I really wonder how people with a much higher mortgage cope, though many have two people working (I'm single so on one income) but it would still be a battle for many I'm sure.



posted on Jun, 15 2011 @ 12:09 AM
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Originally posted by surrealist
Meanwhile, property developments in Australia aren't looking too peachy either. The difference here is though, that Australia has room to influence property prices with monetary policy and lower interest rates - which stand at some of the highest in the developed world. But then, Glenn Stevens has just announced Australia needs yet another hike in interest rates due to possible increasing inflation. I will withhold my personal rant on that here....


If I understand what you're saying here (and we're comparing apples to apples), this is how the USA kept the economy afloat as long as it did - constant lowering of interest rates. In our case, however, they were already pretty low and you can only go so far before you hit ZERO.

The US was lowering rates to keep inflation artificially high and prevent deflation, I believe. When they run out of ways to do this artificially I also believe the dollar will devalue, maybe in a big hurry.



posted on Jun, 15 2011 @ 12:37 AM
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Notsurprised: Read richard Heinberg; stick the fork in our "butt" we're done...




posted on Jun, 15 2011 @ 02:23 AM
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reply to post by Schkeptick
 


That's going to be the problem likely hitting Australia in that there won't be any way of lowering interest rates due to upward inflation. So we will see a property value decline and an economy beginning to slow, upward inflationary pressures continuing and possible stagflation if things get worse. I have not proof of this, I am merely speculating. Our Reserve Bank of Australia has a very blunt rather obsolete tool for controlling inflation, especially in a two tier economy where some areas of the economy are booming due to the mineral resources boom while other industries suffer due to being a non-beneficiary of the resources sector and high Australian dollar among other factors.



posted on Jun, 15 2011 @ 02:56 AM
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Originally posted by Schkeptick
Yes, BUT.

We aren't having massive numbers of newly homeless people wandering the country and living in cardboard villages like in the Great Depression.


That's because those folks were migrant workers traveling on rumors of jobs to be had. Today, there are no such rumors, much less actual jobs.





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