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The "Current Housing Recession is Rivaling the Great Depression’s Real Estate Downturn [and] Will Easily Eclipse It In the Coming Months"
Zillow's Stan Humphries said:
The length and depth of the current housing recession is rivaling
the Great Depression’s real estate downturn, and, with encouraging
signs fading, will easily eclipse it in the coming months.
During the Great Depression, home prices fell 25.9 percent in five years. The U.S. housing market is now down around 25 percent from its peak in 2006.
As housing price expert Robert Shiller pointed out in September 2008:
Home
price declines are already approaching those in the Great Depression,
when they plunged 30% during the 1930s [i.e. over a 10-year period]. With prices already down almost
20%, it's not a stretch to think we might exceed that drop this time
around.
As I wrote in December 2008:
In the greatest financial crash of all time - the crash of the 1340s in Italy .... real estate prices fell by 50 percent by 1349 in Florence when boom became bust.
How does that compare to 2001-2007? The price of Southern California homes is already down 41% [that was before the first-time homebuyer credit,
Hamp and other governmental programs temporarily boosted prices].
Southern California hasn't fallen as fast as some other areas, and we're
nowhere near the bottom of the market.
Moreover, the bubble was not confined to the U.S. There was a worldwide bubble in real estate.
Indeed, the Economist magazine wrote in 2005 that the worldwide boom in residential real estate prices in this decade was "the biggest bubble in history". The Economist noted that - at that time - the
total value of residential property in developed countries rose by
more than $30 trillion, to $70 trillion, over the past five years – an
increase equal to the combined GDPs of those nations.
Housing bubbles are now bursting in China, France, Spain, Ireland, the United Kingdom, Eastern Europe, and many other regions.
And the bubble in commercial real estate is also bursting world-wide. See this.
In addition, the percentage of Americans who owned houses during the 1930s was much lower
than today, which means that a larger portion of the public is being
hurt from falling home prices today as compared to the Great Depression.
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Bring out yer dead!
But I'm not dead yet!
Could yer give us a hand here?
**Whack!!**
Thank yer!
Bring out yer dead!
"Bring out yer dead!"
Give it a few years and then; bring out your bulldozers.
And just think, we are in a Recovery! Since the bubble was much greater this time, with central banks pushing it, we are likely to far exceed the declines of the 1930s. Many parts of the country, outside the cherry-picking Case-Shiller index, are already back at 2001 prices.
Well hey, in related news, my income is almost back to 2001 levels as well, in nominal terms. Almost back up to.
I'm sitting here in my bathrobe working on an indy software project, eating food I made and preserved myself, and watching the world go full-retard.
That growing, hunting, canning thing comes in handy, don't ya say? Sho 'nuf does! We taught ourselves hwo to can this summer - both kinds, waterbath and pressurized! And, I done took two deer with my bow already this season, ground 'em up and got 'em in the freezer. Yessir, I was born in the mountains, edumacated in the city, live in the suburbs, got me a good job (fer now), but I tell you this - there's nutin' like, "eating food I made and preserved myself, and watching the world go full-retard." WAAAA HOOOO!!!!
George, make sure to also note the cliff dive in number of homes sold. Price is half the equation, but once you factor in sales (price x number of units sold), the total economic value of the housing market has plunged over 80% since the 2005 high and is still, amazingly, falling. This is the story they don't want to be told, because it's frankly so completely terrible for those of us who work(ed) in that sector.
Exactly. The Plague crushed real estate values in Florence in that time period. Of course, labor became scarce too. This created the pre-condition for technological advancement as optimal capital/labor ratios shifted.
Maybe Ben B will add rats to his POMO.....It's one way to solve Unemployment/surplus labor.
Starvation, pandemic or war will work, too.