Real Estate - The 800,000 Pound Deflationary GorillaSubmitted by bad_karma on Fri, 09/11/2009 - 19:39
Real Estate - The 800,000 Pound Deflationary Gorilla
by Adam Brochert
The housing market is rapidly deteriorating under the surface. A housing price collapse is a highly deflationary event because it affects so many banks and individuals. We are not close to a bottom in the real estate market and it is essentially almost impossible for it to come before the 2011-2012 time frame. If our government insists on continuing to subvert what's left of the free market system in real estate, it may take another decade to find the bottom.
Here's a recent headline for you: "Nine years worth of condos flood uptown Charlotte." This is Charlotte, North Carolina folks. We're not talking about an obvious place like southern Florida, California, or Las Vegas. We're talking about a fairly typical non-coastal American city (I mean no offense to those in Charlotte who believe they are above or below average). Nine years supply at the current sales pace while credit continues to get tighter and unemployment is still rising?!
Banks are now hiding foreclosures and refusing to list foreclosed homes on the market! Even worse, banks are allowing people who stop paying their mortgage to stay in their homes for 2 YEARS OR MORE without taking back the house.
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