A rising tide raises all ships. A falling tide lowers all ships. Hence the current Great Recession. Regular readers will remember that I have already told you to expect the unexpected.
Well here's a bit more "unexpected" news:
When people lose their jobs, they stop paying mortgage bills.
Surprising, well, nobody who was paying attention, FHA reports 14% of all their loans are delinquent, in addition to the 3.3% already in foreclosure. That would be the same FHA with the whopping 0.56% reserves against future losses. Standby for more "bailout" news shortly. That link to Naked Capitalism is about how, with these loans being foreclosed-upon, the values of the houses associated with them are falling . . . which leads us to:
Commercial real estate prices are off by 43% from their peak. Those who click the link will note well: the prices on both commercial and residential real estate are currently falling right back to where they were when the 'low-low interest rates will get the economy zooming again' madness at the Federal Reserve began.
To restate: real estate prices are currently adjusting back to what they were before the government interfered with the free market and fucked up values for everyone in the last decade
Which may go quite a ways toward explaining why nobody is building any new homes right now.
Give it a few years. I hope by the time we get our family out of debt, the price of land will have fallen to match the fall in the price of land with a house on it, and we will be able to get ourselves a few acres to disappear onto.
Wish me luck.
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