There remains debate over whether America’s housing market has truly bottomed, but it’s certainly not as bad as it was during and immediately after the recession.The same cannot be said for Spain.
The AP reported Thursday home prices fell 14.4 per cent year-over-year in the second quarter and 15.2 per cent in the third.
Prices in Madrid fell 17.9 per cent.
The situation is so bad, it threatens the banking system, and in turn threatens the the finances of the entire nation. That in turn threatens all of the Eurozone, as its neighbours wait nervously to see if Spain ends up needing a bailout.
What’s the problem?
We dug in.
More than 350,000 people have been evicted from their homes since 2008. Another 500 evictions a day, according to government figures.
The evictions have begun tormenting Spanish society. In the middle of being removed from her home, one occupant went into labour — almost certainly from the stress, according to Dow Jones.
They worked. Last month, banks agreed to suspend all evictions for two years. But as any banker will tell you, this will only slow the country's housing market recovery.
But the real culprit for prolonging Spain's real estate agony has been austerity. As he works to get the country's debt under control, Prime Minister Mariano Rajoy has sacrificed this entire sector of the economy.
The rate of decline in unpaid credit obligations has hovered between 3 and 4 per cent every month since August 2011.
Meanwhile, the ghost cities from the first wave of Spain's bubble still linger. Here is Valdeluz, a bubble development outside Madrid. Less than 1,000 people now live in an area built for 30,000.
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