Feeling rich through debt: Modern banking has replaced real economic prosperity with massive levels of debt. Housing affordability reaches multi-decade highs while household incomes retreat to 1990s levels.
One of the biggest headlines right now is how the housing market is pulling the entire market up. Housing prices are soaring while the stock market is making record highs. Yet a large portion of the housing run-up is being caused by easy money that has been created by the Federal Reserve. Banks are out-bidding [...]
Inflation by any other name – Rising rents have pushed up the CPI to highest monthly change in three years. Shifting the Fed bailouts onto the working class and poor.
The Consumer Price Index (CPI) attempts to measure the change in price for a basket of American goods and services. I say attempts because measures like the “owner’s equivalent of rent” are simply an estimation as to what a home owner’s place would rent for. In the early 2000s with home prices surging, it missed [...]
The desert mirage of easy housing profits – Phoenix Arizona home prices on track for four consecutive years of year-over-year home price declines. 55 percent fall from peak and nominal home prices back to 2000 levels. What happens when investors dominate the market?
The foreclosure epidemic in states like Arizona and Nevada is breathtaking and incredibly disheartening. Prices have cratered much more quickly than the methodical rise up in the last decade. Home prices in Phoenix now sit precariously where they did in 2000 without adjusting for inflation. These desert communities largely built on a dream, fast construction, [...]
How investment banks turned housing and student loans into a toxic and financial disaster – Middle class largest asset coopted by banking sector to raid and speculate on. Financial sector nearly 30 percent of all corporate profits in U.S. In the 1950s it was under 10 percent.
Most Americans pull their net worth from their investment in good old housing. It is the biggest purchase most will ever make. And because of this, after the Great Depression, housing was a boring yet stable investment class. It had to be. This is the cornerstone of wealth for most Americans. Banks used to do [...]
Living paycheck to paycheck with the housing albatross – Survey finds one in three Americans unable to make their mortgage or rent payment beyond one month if they lost their job. 61 percent unable to make payments beyond five months.
One of the unnerving revelations brought about by the current recession is how many Americans are living precariously close to the economic edge. The Band-Aid of credit cards, home equity loans, and other vehicles of debt masked the problem for many years. Debt was rolled over on a continuous basis and as long as the [...]
The banking gears of housing – Bank of America sells mortgage servicing rights on large loan pool to Fannie Mae. 400,000 loans shifted to Fannie Mae with $73 billion in unpaid principal.
Things just seem to get more perplexing with the housing market. Back in August the Wall Street Journal discussed a deal between Fannie Mae and Bank of America. The deal is odd even for the current banking system we have in place. It was reported that Fannie Mae purchased the servicing rights to 400,000 loans [...]
The giant gamble in the desert – how Las Vegas bet big on commercial and residential real estate and lost big. Home prices in Las Vegas now down 60 percent from their peak and nearly 1 out of every 5 mortgages is in foreclosure.
Las Vegas is an economic enigma. A gambling and resort paradise planted in the middle of the barren Southwest desert like an electrical oasis. Very few areas witnessed such a large boom in both residential and commercial real estate rolled into one. In a city known for big wins and even bigger defeats the real [...]
The 20 year financial depression in American real estate. Why housing will remain a poor investment well into 2020.
The American housing market is floundering like a fish out of water. The economy is puttering along as middle class Americans confront a quality of life that is declining. Household incomes have fallen for well over a decade yet the dialogue from Wall Street and their political partners seems to focus on home prices rising. [...]
The desert heat melts Arizona home prices – Phoenix home prices now back to late 1990s levels while state tax collection drop to 1998 levels. The second lost decade in the desert.
The real estate crash is much deeper than the media is making it out to be. Entire life savings are being wiped out in markets that are tanking like the Titanic. What is troubling is that some markets are having depression like symptoms with home prices falling 50, 60, and even 70 percent in a [...]
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 [...]