May 23 2011

Day of reckoning for commercial real estate in 2012 – largest amount of loans maturing next year as $150 billion in CRE debt comes due. Federal Reserve running out of options in hiding financially disastrous real estate loans.

The Federal Reserve has tried its best to hide the secrets of past banking blunders deep in its balance sheet.  Commercial real estate (CRE) loans made in haste during the real estate bubble are part of this national disgrace in banking folly.  As the Federal Reserve and U.S. Treasury digitally print the dollar into oblivion […]

May 16 2011

Scorching the desert housing markets – Arizona and Nevada real estate blossomed with cheap fuel and easy access to debt. For last two years 40 percent of buyers came from all cash purchases. What happens when the well runs dry in the financial desert?

The Arizona housing market is a perfect example of what happens when the housing religion spirals out of control and implodes in dramatic fashion pushing up against environmental limits.  I remember driving in the blistering summer heat through Arizona before all the housing mania launched out of control in the late 1990s and thinking that […]

May 9 2011

The financial bubble that is still popping – Home prices enter a deep double dip because household incomes are still in a rut. Housing bubbles in Los Angeles and San Francisco persist while Miami and Phoenix metro areas face double digit annual price declines.

Some people are stunned that home prices continue to sink as if a lead weight was placed on the value of housing.  The mainstream press never sliced and diced the minor jump in prices we had last year because much of the increase occurred around tax credit gimmicks and the Federal Reserve using artificially low […]

Apr 9 2011

The housing gamble: What if home prices remained stagnant until 2020? 6 charts laying out the argument for stagnant or declining home prices for another 10 years. Peak in dual income households, home prices still inflated relative to incomes, Federal Reserve unable to hold mortgage rates low forever.

What would happen if home prices remain stagnant for another decade?  It is hard to imagine that the cornerstone of the American dream would somehow become a bad investment for the next decade.  For decades every generation was conditioned into believing that housing was the best investment a family could make.  For many it provided […]

Apr 2 2011

The financial elixir that is falling home prices – Lower home prices good for the economy – Median U.S. home price down to $157,000 taking up 3 times the annual household income instead of the bubble peak of 5. Adding jobs while home prices move lower? Banks big winners when home prices remain inflated.

It is interesting that in the short-term horizon of our economy falling home prices are occurring while jobs are being added.  The banking sector during the early days of the crisis made it abundantly clear that falling home prices would lead to economic collapse.  Yet the opposite is occurring. Why?  First, inflated home prices eat […]

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