The Real Estate Bust is Not Over

Today the Wall Street Journal published a story claiming the real estate bust is over (see: Housing Passes a Milestone: Do you believe this claim that the housing bust is over?

Ask yourself how can it be over if the following issues still exist:

1) High unemployment. Low job creation. Who can afford a house payment without a job?
2) About 10,000 boomers retiring daily. Many of them are downsizing into apartment living so they can live on smaller incomes. They will be selling real estate, stocks and bonds to live on the proceeds in retirement.
3) Between 10,000,000 and 11,000,000 additional home owners are behind on their payments (see: They are moving into foreclosure. Do you think this will be a positive for a housing market recovery?
4) China's real estate market is a bubble. The bubble is starting to show signs of cracks. If it pops what do you think the effect will be on the global economy, on jobs, on the world financial markets? (see: and see also:
5) The U.S. banks, Freddie and Fannie and the Federal Reserve are still sitting on billions of dollars of "toxic assets". Many of those toxic assets are homes that were foreclosed on. At what point will these institutions start dumping these homes en mass? The already are. They are selling them in million dollar plus packages to sovereign wealth funds and billionaires who plan to rent them to people who can't afford homes. That inventory will be a drag on the housing market.
6) Many young people who should be buying homes and starting families are doing neither for a variety of reasons such as too much college debt, no desire to be married, and no desire to have children, or a belief that having children will hurt the planet (see: Many of them have watched their parents suffer under the burden of mortgages and other housing costs. They have decided they don't want the same pressures. If they can't afford families they might not buy houses either.
7) The world economic crisis isn't over. The European economic and financial crisis intensifies daily. The United States has nearly $100 Trillion in non-funded future liabilities. The capital drain that this represents on the nation will make it hard for the housing market to grow. (see:
8) Tougher banking lending rules demand good credit, a larger down payment and proven income. Few people can measure up to this new standard.
9) A bond market collapse looms as a possibility.
10) U.S. Federal government credit rating has been downgraded. It's only a matter of time before interest rates must float up. As the U.S. government continues its socialist pathway it will fall deeper and deeper into debt. This is not good for it's credit rating.
11) Monetary inflation will eventually push interest rates up. What will higher interest rates do for the U.S. Residential Housing Market? I promise it won't make it easier for people to afford a home and it won't make the price of the average home go up.

12) The Boomers didn't replace themselves. As the birth rate continues to weaken so will demand for new homes and for everything else continue to weaken (see:

14) Many Americans are worried about the growth of socialism worldwide as it is devastating economies in Greece, Spain, France, Italy, Portugal, Ireland,and the United States.

15) Both Republicans and Democrats threaten to eliminate the "interest deduction". What will that do to the housing market? What will it do to the value of exiting homes, many of which carry lots of debt? Will it increase the number of home owners who can no longer afford the debt on their homes? It hasn't happened yet, but if it does you can likely expect a plunge in the value of homes. Home ownership will not be nearly as attractive. The market will suffer.

16) Global war threatens. It may have already started as the bankrupting Middle East war continues with no end in sight. The U.S. continues to fight the New World Government's wars across the globe making ever more enemies. The geopolitical landscape is frightening. These things do not encourage people to take on more debt or to buy homes. They will rent in times of uncertainty. That is why hundreds of thousands of new multi-family rental units are being built across the country. The demand is there. The demand for apartments is strengthening.

Don't believe the lies from the mass media propaganda machine that there is a general housing recovery. It may be that there is a temporary recovery in a few isolated areas (see:, but this is not a permanent or a general trend. Our nation's recession is turning into a depression that threatens to become a tribulation. Ever bigger and ever more oppressive government is reaping what it has sowed. When the wicked rule, the people mourn.

See also:


Investing in stocks, real estate, and precious metals is risky and could result in losing money. I am offering ideas for your consideration and education. I am not offering financial advice. Please do your own due diligence. I am not an investment adviser. Precious metals is not for everyone. I promote precious metals. You should do your own due diligence when making investment decisions of any kind. You should consult your own financial advisers before making any investment decision. I make no guarantees that by following any advice or suggestion I might make that you will realize any return. Beware, all commodity markets and other markets carry risk of loss.



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