Imagine that.

There’s no equity if there are no buyers. There are several house on my street for sale….by owner. I imagine the folks who bought them and fixed them up will have to wind up renting them or staying in them.
Then there’s my 97 yr old aunt who moved into Assisted Living. Lives in a small town in Minnesota; you can imagine how fast THAT house is going to sell. She says she can only get $40,000 for it IF there’s a buyer.
It’s really sickening
When you say the housing crisis is only half over, that means to me the TBTF banks just haven’t gotten their mitts on them…….yet.
It’s a funny sort of eminent domain going on here.

It’s a funny sort of eminent domain going on here.

Not at all. That’s the whole point of the exercise, to loot homeowners.

Honestly, it is difficult for me to get worked up about decreasing home prices. During the 90s and 00s, I saw an awful lot of people buying affordable properties and “flipping” them for a profit, driving the prices through the roof. Home prices MUST come down for the economy to heal: they cannot remain at the levels created at the height of the speculation market.

You’re calling for killing the patient in order to cure him.

Historically home prices have gone up a percent or two in excess of some measure like CPI inflation. Prolly related to something unmeasured like improvements, rather than to superficially measured prices, since houses, like all real assets depreciate.

So the house price bubble could be alleviated by gently letting the air out thru that mechanism rather than bursting it. The economy & the housing market would both be better off, in the short and long run.

Thanks David. Since you mention Nevada, did you see this?

Home prices MUST come down for the economy to heal: they cannot remain at the levels created at the height of the speculation market.

They are nowhere near those levels. Read DDay’s post — or any newspaper. Why do home prices have to come down when the banks that made the loans and packaged and sold them as AAA are bailed out? Why do ordinary American’s assets have to fall in price when bank assets are backed up with taxpayer funds?

Get real.

I don’t like it either that home prices keep falling. But let’s get real. The bubble burst 4 years ago.

We DON’T want to get back to those bubble prices. We should be looking for stability in the price of home assets, not big ascensions.

I don’t want to see homes treated like endless ATMs ever again.

Who said anything about home prices going back to bubble levels?

Talk about setting up a bogus straw man.

I don’t want to see homes treated like endless ATMs ever again.

Like that was the problem. How about average income of American families stagnant over the last decade or more? Is that something you don’t want to see also?

Excellent point.

Those unemployed and underwater are VICTIMS of the crisis — not the perpetrators. Home equity is really the only asset that low to middle-income families have. And we want to see it fall? Along with their wages?

Talk about not getting the thrust of the “Shock Doctrine!”

Even a million Americans buying too much house does not, in and of itself — crash the economy. In the old days, the bank held the note and paid the consequences. There was a natural (market) cure for such situations: the banks lost money on the bad loans and stopped making such loans. It may have caused an increase in interest rates to new borrowers or tighter credit conditions, but it not blow up the financial system or the economy.

What was required for the crisis was a financial system that encouraged as many bad loans as could be made, bought them, packaged them fraudulently as AAA, and sold them to unwary investors. And gambled with the proceeds.

So who deserves to be punished: the family that may have bought too much house or the financial system that preyed on them?

And whose assets should be allowed to fall in value?

The need for housing prices to come down is an entirely different matter from holding banks accountable for their part in the disaster.

The good news in the housing market is that cardboard structures are rising in price. Tents though, not so much.

Median income is less then $50,000 so I totally agree with you. The correction is going to be ugly though.

I heard basic houses were going for half a million in some places and thought how insane is that.

Delicious

Bringing it to the man, with class.

The character of Macheath, later to become Mack the Knife, first appeared in The Beggar’s Opera by John Gay (1685-1732). Gay was a popular English playwright and poet, a friend and collaborator of Jonathan Swift and Alexander Pope.

Mack the Knife, The Beggar’s Opera is a comic ballad opera, the first of its kind, and took London theatre by storm. Gay uses lower-class criminals to satirize government and upper-class society, an idea that has been used often ever since. [*]

GG gets the lesson, as do many victims. “Why do ordinary American’s assets have to fall in price when bank assets are backed up with taxpayer funds?” Because this is not due to incompetence, unless you are considering incompetence on a generational scale. Or perhaps you propose that we should have government-owned housing?

No, I didn’t think so.

The public sees through this farce. The’ve long been accustomed to paying the bills, but they don’t have to buy your story too.

Agreed. Deflating the housing bubble is necessary. But the conventional wisdom among the media, the PTB, lawmakers (who only pay lip service to it but still) is “house prices need to go back to where they were, and then we’ll all prosper again.” No. Just no. When houses were going for 9, 10, 11, 12 times the median income in some areas, when prices went up by 20 percent a year when incomes were going down, that’s the problem, not the solution. Talk about bailing out the banks who made the loans… that’s a somewhat different issue. They shouldn’t have been bailed out. But if you bail out the homeowners, expect some unintended consequences (such as 400 square foot crapshacks in LA to go for 800K again). No thanks.

I said this long before anyone accepted that this was a problem, back in 2004 or so, when everyone, EVERYONE in LA was saying it was normal for houses to quadruple in ten years… we can’t have a sustainable economy where almost all of the activity is buying and selling overpriced real estate.

The two problems ARE/WERE related. People were drawing $$ out of their crappy overpriced houses to maintain their lifestyles BECAUSE their incomes had stagnated.

What is this mechanism you speak of for letting air out of the bubble gently? And isn’t it a little late for that now? We’re four years into the great deflation.

When 20+ % of homes are underwater, owning more on the home than it is worth? (oh ya, all those thousands of dollars already paid??? … vanished, gone, … thousands of dollars, earned through hard work working for the man, and … poof, gone)

This is not an economic system. No rational person or even an economist would say this is any way good for our society.
It’ a scam. A con. The game is rigged.

Nothing goes anywhere in a country stripped of its capital goods manufacturing and bogus trade agreements that do away with any ability for citizens to lift themselves up to afford even reasonably priced homes, because there are no jobs but those held by the captains of industry who push money around and pretend that it means something other than the utter destruction of a country.

The financial industry has raped us and since we liked it so much we get to pay them back for the rape with a tax.

And now if they don’t like the set of your jib they will be able to throw you in prison or worse and forget you ever lived..welcome to america the banana plantation of the north.

This time, don’t just avoid the rohypnol. Call your family.

http://www.youtube.com/watch?v=vQVeaIHWWck

Still brings tears to my eyes. Thanks.

When I was a kid my grandfather would always play it for me. Your welcome