U.S. housing crash worse than we were told

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The bursting of the U.S. housing bubble began the Great Recession of 2007 — a recession that continues to this day, despite the ever-obliging media’s trumpeting of a small improvement in unemployment numbers, an improvement that will turn out to be seasonal from Christmas retail hires. Now comes news that the housing crash is actually much worse than what we’ve been led to believe.

Homes under water

Reuters reports Dec. 13, 2011, that data on sales of previously owned U.S. homes from 2007 through October 2011 will be revised down because of double counting, indicating a much weaker housing market than previously thought.
The National Association of Realtors (NAR) spokesman Walter Malony told Reuters, “All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought. We’re capturing some new home data that should have been filtered out and we also discovered that some properties were being listed in more than one list.”
California-based real estate analysis firm CoreLogic says sales could have been overstated by as much as 20%.
On December 23, 2011, the Wall Street Journal reports that the NAR said that, due to shifts in the housing market that weren’t detected until this year, it had over-estimated home sales by 14.3% between 2007 and 2010, meaning that 2.9 million fewer homes sold during those years than thought earlier. But the NAR insists that there are fresh signs that housing is improving.
Alas, four days later on Dec. 27, 2011, Julie Schmit of USA Today reports that U.S. home prices continue to fall. Home prices were down 3.4% in October from the same time last year, according to the Standard & Poor’s Case-Shiller home price index of 20 leading U.S. cities. Prices were also down from September, on a non-seasonally adjusted basis, in 19 of the 20 cities the index covers.
And those prices are expected to continue to fall. A Zillow survey of 109 top housing experts indicates that U.S. home prices will decline until late next year or early 2013.
Economists have identified at least two factors hampering home prices:

  • Negative equity. About 22% of homeowners with a mortgage owe more on their homes than they are worth. Those people are not likely to move and buy another home, says Christopher Thornberg of Beacon Economics.
  • Foreclosures. Nationwide, more than 6 million homeowners were late on their home mortgage payment or were already in foreclosure at the end of the third quarter. As more people lose their homes, the distressed sales will put downward pressure on home prices, Newport says. James Saccacio, the co-founder of foreclosure tracker RealtyTrac, expects a “new set of incoming foreclosure waves,” which may roll into the market early next year.

The S&P data shows Atlanta faring the worst among major metropolitan areas with prices off almost 12% year over year, likely caused by foreclosures. Of the 20 cities, only Detroit and Washington posted positive annual returns of 2.5% and 1.3% respectively.
An oversupply of unsold homes on the market continues to stifle the housing sector. Until the housing market improves, America’s economic recovery will remain a chimera.

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11 responses to “U.S. housing crash worse than we were told

  1. just think–all by design.

  2. Thank you Dr. Eowyn for this disclosure. A disparity of 14.3 % to 20% in sales reporting is hardly just an error in estimation and not a disparity at all. I say that such a huge “error” is an outright lie in order to reflect better numbers.

    • I agree. I too have difficulty believing that so large a disparity was due to faulty “sales reporting.” We now have a new synonym for lying: “sales reporting”! LOL

    • No doubt Joan…can you imagine a private company making this gross of an error for so many years?
      In my area, condo prices have dropped substantially, some by as much as 50%. Foreclosures in my place have mine valued at 35% less than what I paid just six years ago… 🙁

  3. Government propaganda…say it ain’t so 🙂
    Imagine how far of their count is on unemployment …
    or inflation !

  4. The housing crash was done for the same reason that Regan let the government lend out millions to ranchers and farmers so they could take them over and give ranches and farms to big corporations, and they are STILL doing the same thing, which is Constitutionaly Against the LAW. But the government doesn’t care because they know the people won’t do anything about it! NOT TO WORRY, It’s gonna get worse, because the STUPID AMERICAN PEOPLE are going to elect another Monkey on some Elitist’s chain so they can finish us off! Ron Paul “CAN SAVE US ALL”!!Semper Fi.

  5. The S&P data shows Atlanta faring the worst among major metropolitan areas…
    Tell me about it, as I got hit right between the eyes career-wise.

  6. The UN Agenda and that of our government is to make everyone a renter. They want to abolish private property ownership, and this housing crisis was deliberately created by them. There’s nothing more I have to say on this score, but anyone else who has feel free to comment back to me. I am very interested on everyone else’s take on this.

  7. If Congress had gone ahead and passed the Home Owner and Bank Protection Act in 2007, then so much of the mess we are in could have avoided. First of all the banks would have been regulated by reinstating the Glass Steagall standard, which is still a possibility now, and secondly, all mortgages would have been frozen,
    simply speaking, as they were under similar circumstances faced by FDR. Barney Frank and Chris Dodds had other ideas, and their bills as well as the other bills dreamed up by various Obama Genius’s have caused for the disaster that we are experiencing, no doubt exactly as they planned. We can still go ahead and deal with this crisis by passing HR 1489, The return to prudent banking act, which would cut off the too big to fail banks and hand them back their dreaded bogus bundles. We would have to go back to Article 1 Section 8, surprise surprise, the Constitution had the right idea after all, and get Congress uttering credit, which would be for gigantic projects that would put millions back to work, and then we could take steps, sane steps, to get the housing problem under control. What Congress thinks about what they have done is pretty obvious, the bill they have just come up with about losing citizenship if you challenge the Federal Government, is beyond comprehension. There is a movement to get all US Sheriffs involved in standing up for our constitutional rights that can be viewed on the INternet. Apart from that “Let the church arise” We gotta pray to make it through the day.

    • LIke in Ninevah when Jonah got there the first time, even the piglets fasted. At least Perry said he loved the sinner but not the sin, sometime last week. Sin is hardly ever mentioned now, his remark took me by surprise. He said that we were meant to be a Judeo Christian nation. He could call a fast……………………
      a national fast…………………………………. THE LAST TRUMP …………………………………. Last call last call…………


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