Photo: Courtesy of MGM
The real estate crash that never seems to end appears to be getting even worse. Home prices continue to go down, the number of underwater mortgages is soaring and the number of foreclosures set an all-time record in 2010.
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The peak of the housing market was in 2005 and the subprime mortgage crisis erupted in 2008. Shouldn’t things be getting better by now? How many years is this real estate crash going to go on for? Home builders and those that work in the construction industry are deeply suffering because new home sales continue to hover around record lows. Mortgage professionals are having a really hard time because very few people are seeking home loans and many of those that are seeking loans cannot get approved.
Real estate agents all over the country are pulling their hair out in frustration and large numbers of them have left the industry completely. The United States has never had such a prolonged real estate slump in the post-World War 2 era. Unfortunately, there are a whole lot of indications that the real estate crash is going to get even worse.
The rapidly rising price of oil, the horrific crisis in Japan and instability in the Middle East all threaten to plunge the world into another major economic downturn. That is really bad news for the real estate industry. Already there are not nearly enough jobs for everyone in the United States and without good jobs American workers simply cannot buy homes.
In addition, many of those that would like to buy homes are finding that they cannot get approved for home loans. Before the real estate crash, lending standards were incredibly loose, but now the pendulum has swung very far in the other direction.
Applying for a home loan today is roughly the financial equivalent of a proctology exam. Once upon a time banks and financial institutions were handing out mortgages to anyone who could sign their name on a piece of paper, but now mortgage lenders are being extremely, extremely tight with their money. This is making it very hard for the U.S. real estate market to recover.
In many ways, the U.S. real estate industry is starting to somewhat resemble a movie that Bill Murray once did entitled “Groundhog Day”. In that movie the character that Bill Murray played had to live the same day over and over.
Well, for the U.S. real estate industry every single month is a complete and total nightmare. But instead of being exactly like the previous month, each new month seems to bring news that is just a little bit worse than the month before.
Will this nightmare ever stop?
The number of new building permits fell to a new all-time record low in February. In fact, new building permits were 20 per cent lower during February 2011 than they were in February 2010
As of the end of 2010, 23.1 per cent of all U.S. homeowners with a mortgage owed more on their homes than their homes were worth
It is estimated that there are about 5 million homeowners in the United States that are at least two months behind on their mortgages
18 per cent of all the homes in the state of Florida are sitting vacant. That number is 63 per cent larger than it was just 10 years ago
Celia Chen of Moody's Analytics projects that home prices in Florida are going to fall another 11 per cent
In Dayton, Ohio today 18.9 per cent of all homes are now standing empty. 21.5 per cent of all homes in New Orleans, Louisiana are currently standing vacant
Home prices in the United States declined by 5.7 per cent between January 2010 and January 2011, according to CoreLogic
New home sales in the United States in January were a shocking 11.2% lower than they were in December
The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010
72 per cent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009
In 1996, 89 per cent of Americans believed that it was better to own a home than to rent one. Today that number has fallen to 63 per cent
In 2010 sales of previously existing homes in the United States were at their lowest level in 13 years
Distressed property sales accounted for nearly 60 per cent of previously owned home sales in California last
The median sale price of a home in California has declined on a year-over-year basis for five months in a row
Deutsche Bank is projecting that 48 per cent of all U.S. mortgages could have negative equity by the end of 2011
Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months
According to Zillow, U.S. home prices have already fallen further during this economic downturn (26 per cent) than they did during the Great Depression (25.9 per cent)
In September 2008, 33 per cent of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure
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