Hedge funds are gambling, while production is crashing. The real estate bubble is over, and going down. New York City is beautiful, that's why I take pictures of it, but it's the belly of the beast.

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A Funny Thing about Home Foreclosures

March 13th 2010 16:12

Real Crash- Looking at Capitalism and its Laws:

Bruce Springsteen and Foreclosures

The reason for the non-foreclosure of 5-6 million all-but-foreclosed American households is obvious. With total sales of new and existing homes in the United States running at about 1 million a year, and 40-50% of those sales already representing foreclosed homes, banks and lenders simply can't try to sell the vast majority of the homes in deep delinquency, so they aren't foreclosing on them. If prices, which are now falling only slowly, start to rise even a small amount, the mass of waiting foreclosures will soon send them plummeting again. The huge "shadow inventory" of foreclosures -- homes of the unemployed, the underemployed, and others who've lost the ability to make their mortgage payments -- hangs over residential real
estate, capable of collapsing it again at any time.

So Bruce Springsteen may have a hungry heart, but the real estate market on the boardwalk in Asbury Park, NJ and elsewhere is dead.

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3 Comments. [ Add A Comment ]

Comment by S.L.

March 13th 2010 18:22

The Political Brief

Sad as it is, Howard, there's a valuable lesson to be learned here. Don't buy what you can't afford. And don't believe ACORN and the government when they tell you to go ahead and do it anyway. That was the major cause of the housing collapse to begin with.

Comment by Howard

March 13th 2010 19:15

Real Crash

Well that is interesting, but it is much bigger. The Tishman Speyer Group organized approx. $6 billion in a real estate deal to buy the huge Stuyvesant complex (3,000 apts.)of middle-class housing in NYC. They sold off 98-percent of the deal to investors such as the California State Pension system. The deal collapse because the apts. were overvalued. Also, because it was originally subsidized housing built by Metropolitan Life, it was illegal to remove the rent control.

That is an example of how the real estate bubble was built up and collapsed, far beyond smaller players like ACORN.

Comment by S.L.

March 13th 2010 19:33

The Political Brief

ACORN, Fanny, Freddy and others were responsible for the mess, Howard, some a little more and some a little less. But they all had their grubby paws out for the rescue when it caved in on them, didn't they? And the government was stupid enough to cough up the cash. Too many people bought over-priced homes and are now "underwater" because of it. Too bad nobody was smart enough to "bail out" the taxpayers instead of businesses. If all those billions had been divided between those of us to whom it rightfully belonged, the economy wouldn't be down the toilet and we might have gotten out of this hole before it got so deep. Still the government won't drop the shovel, but keeps digging us in deeper...

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