US Housing Crisis Is Now Worse Than Great Depression

[thedude]

http://www.cnbc.com/id/43395857

It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.

Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.

The news comes as the Federal Reserve considers whether the economy has regained enough strength to stand on its own and as unemployment remains at a still-elevated 9.1 percent, throwing into question whether the recovery is real.

...

Indeed, the foreclosure problem is unlikely to get any better with 4.5 million households either three payments late or in foreclosure proceedings. The historical average is 1 million, according to Dales' research.

The only bright spot Dales found, aside from the slowing in price drop in March, was some isolated strength in states such as Nevada, Michigan, South Dakota, Alaska and Iowa.

 

[Zippyjuan]

Not really. You have to consider where you are measuring from. Housing prices at the start of the Great Depression were at a pretty normal level- losing 31% from that was pretty significant. The decline measured now is from the top of an inflated bubble- comared to "normal" housing prices, we are pretty close to their more usual level- not 33% below that. This is not a crash but a correction- moving closer to where they should be- instead of a significant diversion from the norm.

 

[thedude]

Not really. You have to consider where you are measuring from. Housing prices at the start of the Great Depression were at a pretty normal level- losing 31% from that was pretty significant. The decline measured now is from the top of an inflated bubble- comared to "normal" housing prices, we are pretty close to their more usual level- not 33% below that. This is not a crash but a correction- moving closer to where they should be- instead of a significant diversion from the norm.

You do realize the bubble was a bubble because more than normal amounts of people were in the market... So a more than normal price range is expected by more than normal demand... So all of the people with no real business owning a home have felt this deflation/correction/double dip crash... Therefore, a more than normal amount of homeowners are under water... Therefore, this impact is more than normal... It is a crash in the eyes of many, and it is a depression that affects all of us...

But I understand what you are saying. I just know that Ron Paul called this, and now we need to tell everybody so. This is not news to simply shrug off because you have shrugged off the bubble.

 

[Zippyjuan]

I do not pretend that things are great. They aren't. But neither are they worse than they were during the Great Depression. In the depression, the collapse hurt everybody basically. Even if they had their house for 30 years, it was still down 30%. If you bought ten years or more ago- your home is not worth less than you paid in most communities. The majority of those hurt were those who jumped in during the bubble and paid more than they could honestly afford. Do you think that Ron Paul could have prevented the bubble if he had been president? What do you think he would have done to prevent it? Order the Fed to raise interest rates (a president doesn't have that power)? Support laws restricting who could take out a loan to buy a house? Would any action be considered getting involved in a market and causing more distortions? Or let it take its course? He saw it happening (as did quite a few other people like myself- I got in before things took off and could not believe the loans people were taking out later on and the prices they were paying for property) but he probably couldn't stop it either.