Another banking professional told me the banking loan industry doesn't expect property values to rise much on national average for the next 10 years. The banking executive said "I'm taking a huge loss on this property that dropped to half its former value and the buyer's making a killing." He added, "there's a huge inventory of foreclosed homes on the market contributing to the mess."
The Reason Foundation's article Housing Market in Total Freefall, Anthony Randazzo reports sobering news in the latest MacroMarkets Report.
"Overall, the March expectations data are the most pessimistic collected to date, and added that after weak performance in the last quarter of 2010, actual home prices at the national level are now less than 1% away from establishing a new post-crash low." And since that isn't cheery enough he added, "Many more experts are now projecting a double-dip after witnessing the double-dead cat bounce that came in the wake of expired government stimulus programs."
The graph tells the story of a peak and decline in property values and projections to 2016, not even half of where it was. This means many homes bought when the market peaked dropped in value significantly and won't regain their value for another decade or more.
I follow a real estate attorney blog, attorney Matthew Weidner, P.A. and a few days ago he posted The Foreclosure Mess is Amerika's Nuclear Disaster.
"Abigale Field’s column in AOL Daily Finance offers the best analysis of the current state of the foreclosure catastrophe and should be required reading for every man and woman in the United States. Read it Here One of the reasons why this column is so important is it explores the very real possibility (I say probability) that the foreclosure mess cannot be solved.
It really is amazing when you take a step back and think about all that is wrong. The crimes, the fraud, the collusion, the cover up, the complicity, the complexity, the total unwillingness of regulators to punish. The total inability of regulators and policymakers to foresee this train wreck as it was happening. (and as it continues to happen) The collapsed economic picture. The failings of our court system. The utter lack of leadership from the local level all the way up to the White House." -Matt Weidner, P.A.I figure all this can only mean one thing; a majority of Americans won't be able to afford large homes anymore. Enter the emerging tiny house trend. I read about these tiny houses a couple years ago when the market crashed in 2008. I think this will be a growing trend as the housing crisis gets worse, especially among young people who have the energy to live that kind of lifestyle.
I guess the days of large houses and the American dream for many are coming to an end. Maybe a few can still afford these kind of homes they call Tiny Houses. This video shows one that's 89 square feet.
The inside of a Tumbleweed Tiny House. Lets hope this comes with solar panels.
In these times it would clearly be most economical to be a midget. I also predict a growth in the underground condo industry that's already taken root.