Don’t be fooled by the optimism paid for by big corporations that fills the news channels. The real estate market in the US is not recovering at all. In fact it is dying. The demands for new interest rate rises by those that see inflation as a threat, are misreading the situation. QE was expected to bring a recovery in the real economy. It might be driving up share prices and commodity prices, but in the real world, it hasn’t made a blind bit of difference. Here is the real truth about what is actually happening on the ground, and not in the imagination of those who believe they can bail out a highly indebted depressed economy with yet more debt.
Elliott Wave International –
According to the most recent quarterly real estate market survey from Zillow.com, the percentage of U.S. homes UNDERWATER — i.e., those whose market values are below what’s owed on them — soared from 20% in August 2010 to 27% today. On top of that, home prices continue to decline while foreclosure rates rose to a new, all-time record high. (February 10, 2011 Associated Press)
“The US housing market is dying,” says Business Insider. “As statistic after statistic continues to roll in, the reality of what is happening is becoming very difficult to deny.”
Tap – although that isn’t stopping them from trying, as they are wont to do.
Also increasingly difficult to deny is the fact that so many mainstream observers and officials were as blindsided by the housing collapse as your average homeowner. It’s time to “short” the economists, suggested one business blogger recently: “The vast majority of these same ‘experts’ completely missed the $8 Trillion housing bubble in the United States.” (Truthdig)
He’s right. In the years leading up to the collapse, you’d be hard-pressed to find a mainstream pundit who didn’tthink we had entered a new “era” in real estate. Here, the following archive of mainstream insights resets the scene:
- January 2005: “Creative financing” can give “poor-credit buyers… the home of their dreams.”(Associated Press)
- March 2005: “There is a new paradigm in real estate in which prices will continue to rise indefinitely.”(CBS)
- June 2005: Time Magazine cover story titled “Home $weet Home” reaffirms the public’s get-rich-quick-attitude towards real estate.
- September 2006: The first drop in home prices in ten years: “This price drop has stopped the bleeding. It seems the sector has now hit bottom.” (DJ MarketWatch)
- October 2006: “It may not be too soon to say that the worst is over.” (Alan Greenspan)
- July 2007: The subprime implosion “is a contained, isolated and temporary event with little risk of wider fallout.” (London Conference with heads of U.S. investment banks)
- October 2009: “The success of the American economy is closely tied to the success of the housing market; by helping to stabilize the housing market, the home buyer tax credit has helped to shore up the economy as it begins to recover.” (Bloomberg)
Do yourselves a favour. Stop reading newspapers and watching TV. It’s all garbage designed to con you from doing what you otherwise would do. Follow your own instincts. They will keep you on the right track. If governments and the media can’t recognise a credit boom out of control when it’s this big, why bother listening any longer? Think for yourself.
The Tap Blog is a collective of like-minded researchers and writers who’ve joined forces to distribute information and voice opinions avoided by the world’s media.