The wonder years – over 70 percent of GDP comes from personal consumption. For the past decade home equity and credit from other sources fueled growth because of falling household incomes. What happens when credit contracts and home equity evaporates?
In a debt based economy a credit crisis is similar to an uncontrollable virus spreading from house to house. The slow infection hibernated for decades until it went into a pandemic. It is troubling to see how the middle class is slowly being dismantled. However there is one silver lining of the home price correction. [...]
Phoenix real estate breaks a record with 50 percent of all home sales coming from all cash investors. Locals barely can buy with FHA insured loans. Can a desert market dependent on cheap oil and survive in the $100+ a barrel world?
The Phoenix real estate market is a fascinating case examination of an area guided by FHA loans for first time buyers and all cash investors purchasing 50 percent of properties. In January of 2011, the latest month of stunning data, 1 out of every 2 homes sold went to an all cash buyer. We are [...]
Submarine housing markets – Negative equity map and the 7 metro areas where mortgage balances outweigh the entire stock of housing. Examining underwater housing across the U.S.
Negative equity at such a large scale is a rather unique phenomenon from this housing bubble. Even just a decade ago, a person got into a negative equity position due to a really significant shift in a localized market. For example, a city lost a major manufacturing company that supported most jobs and home values [...]