I’m not sure what took the White House so long to try to help out our millions of underwater homeowners. But I think the upcoming election has something to do with it.
I remember when my parents bought their house in Florida, just like it was yesterday.
The year was 1996. They bought a 1,300 square foot home two miles away from the beach. The cost of that home? About $69,000.
Fast forward ten years, and the average selling price for a home in that same neighborhood was $250,000 – $350,000.
After the real estate bubble burst – in 2008 – foreclosed homes were being sold for (and are still selling for) $79,000 – $90,000.
“Never before has the U.S. consumer – the biggest consumer in the world – been this weak for this long. Never,” says Mr. Roach, a Yale University fellow. The numbers support his bleak assessment. In the past 14 quarters consumer growth has amounted to a measly average of 0.2% per year.
Everybody is trying to tell the US what to do. The International Monetary Fund (IMF) might as well join in. It recently warned America that our large number of underwater mortgages could cause the housing market crash…even further.
In today’s video Andrew Gordon analyzes the continued troubles and turmoils of homebuilders during America’s continued economic malaise.
Here’s a question from our British friends: Why are US investors so optimistic when housing is sinking to new lows? The answer? Banks have raised enough capital that the ongoing housing mess doesn’t threaten them. What’s more, the crisis is concentrated in just a few states, like Nevada, Florida, California, and Arizona.
My son, Nick, has been looking for a house in the Baltimore area. Yesterday he showed me one that caught his interest. It’s going for $240,000. He told me it sold in 2005 for over $600,000. The question is, how much cash will he have to put down to pay for it.
No, the 25% drop in new home sales in Shanghai isn’t as bad as it sounds, as the Shanghai Daily points out below. But it’s a start of a genuine cooling off period for housing in China. And that’s good news. China’s real estate market was bubbling. China spent the entire last
