Thursday, May 13, 2010
Housing Market Still Has A Long Way To Go...
Ace points to this article from Yahoo Financial. Foreclosure filings in April dropped 2%, but actual bank seizures for the same month reached a record 92,000. Add to that the fact that 12% of all homes (7.4 million borrowers) are at least one month behind in their mortgage payments, while unemployment is at 9.9% and incomes are stagnant.
The Big 5 states affected by this housing bubble burst are: Nevada, Arizona, Florida, California and Michigan. Meanwhile, since the federal tax credit ended on April 30, new applications for mortgages since then have dropped 9.5%. Add to that, this little gem from ObamaCare - a nice little 3.8% federal tax on home sales.
The prices for housing in southern CA are still out of whack, despite what certain people may lead you to believe. The bubble's peak reached Cloud 9 in late-2006/early-2007, but it's still on Cloud 4 in 2010. More foreclosures, a flooded market, plus an exodus of those not able to find work will force prices back down to reality over the next 1-2 years.
UPDATE: More pins to burst that bubble further.