Sunday, June 5, 2011

Collapse in US housing prices now greater than during Great Depression

The UK newspaper, the Independent, had a poignant article yesterday.

The paper notes that the ailing US housing market passed a grim milestone in the first quarter of this year.  Housing in the US has now deteriorated to the point that the collapse in house prices is now greater than that suffered during the Great Depression.

"The brief recovery in prices in 2009, spurred by government aid to first-time buyers, has now been entirely snuffed out, and the average American home now costs 33% less than it did at the peak of the housing bubble in 2007. The peak-to-trough fall in house prices in the 1930s Depression was 31% – and prices took 19 years to recover after that downturn."

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1 comment:

  1. Time to buy. The US economy is about half way restructured. Americans in aggregate are trimming debt, spending carefully, and socking away money every month. Some people down there have a WW2 attitude, which is a bit overblown. It is a good time for direct investments if you do it carefully. The necessary political changes are coming and as always, they come from below.

    Take a look at "extreme couponing". Watch one one of those "buy a house" shows. The contrast between the US and the rest of the world has never been so stark. These people are sorting it out and fixing their shit.

    The "recovery" of 2009 and 2010 was largely a financial market booze fest. The real recovery in jobs is here, and while it is much slower than what financial commentators say and what most people can tolerate, it is here and it will not go away if the stock market corrects. The real economy is the cash economy now, and it is growing slowly.

    Just the two cents of a long-time bear.