The Federal Reserve and the Wall Street banks caused the epic housing collapse depicted below. Their solutions have made the situation worse. The MSM keeps crowing about a housing recovery based upon miniscule increases in home sales. Sorry folks. We’ve got years of housing pain to go. When you view this chart, you do realize we are in the midst of a 2nd Great Depression. This housing collapse has been far worse than the 1930s collapse. Plus, housing is much more important to our economy than it was in the 1930s. We are still at least three years from a bottom in prices. We are at least a decade from seeing prices get back to 2005 levels. Ignore the crap being shoveled at you by the MSM and National Association of Realtors. There is no housing recovery. It isn’t even on the horizon. Think about it. Mortgage rates are at 1950s levels and home sales have barely budged and home prices continue to decline. This is the epic bust after an epic boom. Thank Greenspan, Bernanke and their Wall Street puppet masters.
Administrator says:
Zombie Housing Market Chronicles – Fed Fails Again To Stimulate A Housing Recovery
Submitted by Tyler Durden on 02/22/2012 09:00 -0500
While today the association of real estate advertising agents known as the NAR will tell us that the home market is improving – an economic observation which we will completely ignore as any data out of the NAR is now proven to be manipulated and fraudulent, a far better indication of the ongoing implosion in the housing market, and more importantly – the sheer powerlessness of the Fed to do anything about it – came out of the latest weekly Mortgage Brokers Association, which showed that refi applications were down 4.8% W/W, while purchases slid 2.9%, after collapsing 8.4% in the past week. This has taken the Purchase Application index back to the September lows, which just happens to be the lowest print in 16 years! And while this in itself would be ok if not exactly good, it took place at a time when the 30 year mortgage rate was down to all time record lows! In other words, Bernanke’s sole prescription to fix the broken housing market diagnosis – low mortgage rates, has now been proven to be a complete disaster, even as Obama does everything in his power to get debt repudiation for deadbeats (at the expense of everyone else of course) and fails. So: what’s the next plan?
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22nd February 2012 at 11:08 am
TeresaE says:
Admin/ & Tyler ask, “So, what’s the plan?”
To gift them to crony capitalists, who are gifted fed money to buy them, then gift them money to rehab the houses, then gift them the underemployed, former middle class workers to rent them with “government help.”
What a great plan.
Well, great if you are a crony, or a politician, or an inspector.
Sucks if you live in the real world and want to work for what you get.
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22nd February 2012 at 11:14 am
Housing “Recovery” | Davos World Economic Forum – For Bloggers, Davos WEF 2012 for Economic Bloggers says:
[...] Quinn over at the Burning Platform had a super chart on [...]
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22nd February 2012 at 11:24 am
efarmer says:
Admin,
“The Federal Reserve and the Wall Street banks caused the epic housing collapse depicted below. Their solutions have made the situation worse. ”
Have we suddenly decided Congress had nothing to contribute to this mess?????? In my opinion, it was caused by a gutless bunch of low lifes, whose only purpose for existing is to destroy this country and micromanage our lives into slavery.
But hey, that’s just me.
EF
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22nd February 2012 at 12:34 pm
tbone says:
like to see that graph with inflation factored in……as the money becomes worth less the actual decline is even steeper, and ultimately they will inflate their way out of this as well
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22nd February 2012 at 12:34 pm
Administrator says:
efarmer
If I was to lay blame on a percentage basis it would be:
Federal Reserve 40%
Wall Street 30%
Congress 15%
American people 15%
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22nd February 2012 at 12:42 pm
Administrator says:
tbone
The graph is on a REAL basis, meaning inflation is factored in the graph.
The Great Depression drop isn’t as dramatic because they experienced deflation during the 1930s.
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22nd February 2012 at 12:44 pm
tbone says:
thank you for pointed that out admin….didn’t see “real”
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22nd February 2012 at 1:22 pm
efarmer says:
Well, it was Congress who voted in the Fed, and it is Congress who keeps sending money to Wall Street and not prosecuting the fraud and who allows all this to happen as though there is no rule of law.
I look at Congress as I look at most people who have kids at Walmart. The kids are running the show. In this same way, and unchecked Fed and Wall Street are given every toy they whine for and all the junk food they want to eat.
Congress — 110%
EF
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22nd February 2012 at 1:25 pm
Administrator says:
efarmer
They all deserve to be strung up.
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22nd February 2012 at 1:28 pm
AWD says:
When real incomes drop or stay the same, nobody can afford housing, no matter the interest rates. When inflation is taking a 7-10% bite out of your income every year, you can’t afford housing. When the real unemployment rate is something closer to 20% than 8%, people can’t afford housing. When millions and millions are underwater on their mortgages, they can’t afford to sell or buy housing. When 45 million people get free or subsidized housing, they don’t need to buy houses. When kids coming out of college have average student loan debts of $25k, then can’t afford to buy houses. When boomers haven’t saved a dime for retirement and have to keep working, they can’t afford housing. Who does that leave to buy housing? Just government employees?
Until these problems are fixed, the housing market is going nowhere but down. And, there are millions of adjustable rate mortgages that are going to reset this and next year, forcing millions more into default. The government, the banksters and Wall Street has gutted our economy, and our biggest “asset”, our houses.
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22nd February 2012 at 1:43 pm
AWD says:
And let’s not forget the criminals at the Federal Reserve. Regardless of interest rates, banks aren’t lending money to buy houses:
“The Federal Reserve Is Paying Banks Not To Lend Money”
Did you know that the Federal Reserve is actually paying banks not to make loans?
It is true.
Section 128 of the Emergency Economic Stabilization Act of 2008 allows the Federal Reserve to pay interest on “excess reserves” that U.S. banks park at the Fed.
So the banks can just send their cash to the Fed and watch the money come rolling in risk-free.
So are many banks taking advantage of this?
You tell me. Just check out the chart below. The amount of “excess reserves” parked at the Fed has gone from nearly nothing to about 1.5 trillion dollars since 2008….
But shouldn’t the banks be lending the money to us so that we can start businesses and buy homes?
You would think that is how it is supposed to work.
Unfortunately, the Federal Reserve is not working for us.
The Federal Reserve is working for the big banks.
Sadly, most Americans have no idea what is going on.”
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22nd February 2012 at 1:45 pm
DaveL says:
Let me bleat once more, from personal observation. Having moved to AZ only 6 weeks ago, the area I’m in seems to have a goodly amount of construction going on. Appartments, condos, single families, in the various subdivisions I’ve been through. Not a boom by any stretch, but certainly a lot more activity than I saw in my last two years in SC. I’m sure low price has a lot to do with it, along with a lot of out-of-state or country buyers.
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22nd February 2012 at 2:49 pm
matt says:
DaveL,
I would love to know how many foreigners are buying SoCal real estate right now, I have seen $500.000 houses getting snapped up much quicker than in the last 2-3 years. My friend does home lending in Maryland and she thinks about a third of transacations are from non-U.S. citzens.
I remeber my parents had a house in SoCal in the late 80′s that the interest rate on an ARM was like 15%!, so I can understand as the banks lowererd their ass-raping rates that the market picked up. We are at 3.75% on good credit and it hasn’t done much to help. I think we will see a 30% drop in values and 2% interest, 2% down on a 45 year loan by Christmas.
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22nd February 2012 at 3:25 pm
Mary Malone says:
Until the MBS fraud is addressed, housing values will continue to plunge. And the steep decline will drag what’s left of the American middle class with it.
Like Admin, we don’t see price declines stopping until the market reaches pre-1995 levels. Coincides with the housing bubble and MERS – BTW.
Just got off the phone with an Aide to conservative Congressman. We had what can only be politely called, a knock-down drag out fight.
I told him the AG settlement was a violation of the rule of law and the guilty must be punished. They stole $11 trillion from investors and its sitting offshore.
He barely acknowledged that fact and kept going back to the freakin moral hazard. “These homebuyers were irresponsible, why should I bail them out?”
I kept repeating that we acknowledge a debt is owed. Money was borrowed. Mistakes were made. But in America, we had due process. I say “Had” because it is gone.
The banks and financial firms that stole $11 trillion from investors are now stealing American’s homes. They are creating evidence for the sole purpose of taking someone’s private property.
I think I finally got thru. He’s going to bring us in to talk to the Institutional Investors and we hope to beat the crap out of them too.
The end game is to get the homeowner and the investor at the table to negotiate a repayment plan. Arrest the parties that have been committing massive control fraud.
Only then will the housing market recover. We can follow Iceland’s lead – or become Greece.
We’ll see what develops. One step forward, two steps back – cha cha cha…But we’re not giving up….
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22nd February 2012 at 4:50 pm
llpoh says:
Admin – I think you are way too easy on the American people. 15%? More like 50% in my book. The massive crimes being perpetrated are being facilitated by the sheeple.
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22nd February 2012 at 5:18 pm
DaveL says:
I’m not great with predictions, but the assumption was this house I bought 6 weeks ago is my last one, so I won’t dwell on how much the price may decline further. Buying a new 2150 sq.ft home for lerss than $63/sq.ft seemed pretty good to me. How much lower can it go? Who knows, but where I left, houses were selling for $120/sq.ft and up.
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22nd February 2012 at 10:02 pm
Kill Bill says:
“A report this week showing rampant foreclosure abuse in San Francisco reflects similar levels of lender fraud and faulty documentation across the United States, say experts and officials who have done studies in other parts of the country.
The audit of almost 400 foreclosures in San Francisco found that 84 percent of them appeared to be illegal, according to the study released by the California city on Wednesday.
“The audit in San Francisco is the most detailed and comprehensive that has been done – but it’s likely those numbers are comparable nationally,” Diane Thompson, an attorney at the National Consumer Law Center, told Reuters.
Across the country from California, Jeff Thingpen, register of deeds in Guildford County, North Carolina, examined 6,100 mortgage documents last year, from loan notes to foreclosure paperwork.
Of those documents, created between January 2008 and December 2010, 4,500 showed signature irregularities, a telltale sign of the illegal practice of “robosigning” documents.” (“Foreclosure abuse rampant across U.S., experts say”, Reuters)
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22nd February 2012 at 10:12 pm
Administrator says:
DaveL
Sounds like a good deal to me.
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22nd February 2012 at 8:57 am