From Bloomberg:
Foreclosures May Hit 1.5 Million as U.S. Housing Bust Deepens
Hold on to your assets. The deepest housing decline in 16 years is about to get worse.
As many as 1.5 million more Americans may lose their homes, another 100,000 people in housing-related industries could be fired, and an estimated 100 additional subprime mortgage companies that lend money to people with bad or limited credit may go under, according to realtors, economists, analysts and a Federal Reserve governor. Financial stocks also could extend their declines over mortgage default worries.
The spring buying season, when more than half of all U.S. home sales are made, has been so disappointing that the National Association of Home Builders in Washington now expects purchases to fall for the sixth consecutive quarter after it predicted a gain just last month.
“The correction will last another year,” said Mark Zandi, chief economist for Moody’s Economy.com in West Chester, Pennsylvania.
A five-year housing boom that ended in 2006 expanded home- ownership to a record number of U.S. households. Now it has given way to mounting defaults, failing subprime mortgage companies and an increasing number of unsold homes.
…
If this slump follows the same pattern as the last one, in 1991, it will persist for at least another year and may fuel a recession. New-home sales declined 45 percent from July 1989 to January 1991 and about 1 percent of all U.S. jobs, or 1.1 million, were lost in that recession, said Robert Kleinhenz, deputy chief economist of the California Association of Realtors.
…
“The fallout in the early 1990s was much worse than what we’ve seen so far, but this downturn is not over,” Puryear said. “The full impact hasn’t hit yet.”
Will somebody tell all those buyers on the sidelines that the Super Bowl was played almost 1-1/2 months ago.
BC and JB (I’m not sure how many others will see this thread)
I don’t know about you guys, but there is not a lot for me to say anymore. I did my best to warn friends and family about this and early on was derided a bit for it, of course. I’m not smug enough to say I told you so, I’m just trying to help those who got into trouble work out of it.
That’s the question that real people need an answer to now, how do you mitigate the damage if you screwed up? or how long do I need to wait now to keep from screwing up?
Do either of you have a call on the second part, because I’m very much lost in the fog.
There’s still so much uncertainty outside of RE (the swinging axe of the currency carry trade, the potential for a real disaster in the finance markets, unprecedented collapses of hedge funds, it goes on and on, and somewhere in there is the disastrous conduct of federal affairs, but it gets to be more than I can fathom.) that I think I’m going into meditation mode for awhile.
My commenting is likely to decline, but I will definitely be reading to see what you are thinking, and you can expect questions.
“How long do I need to wait now to keep from screwing up?”
I’ve asked myself the same question. I don’t know how long it will be before it’s “safe to go back into the water”. I do know this: it won’t be this year, and maybe not next year either.
That’s the question that real people need an answer to now, how do you mitigate the damage if you screwed up? or how long do I need to wait now to keep from screwing up?
Lindsey,
How long to wait? I don’t think anyone can give you an answer. If someone tried to tell me, I don’t think I’d bother to paying much attention. It’s about weighing the risks and making the most informed decision you can. The only think you can be certain of is that you’ve done your own due diligence.
Do either of you have a call on the second part, because I’m very much lost in the fog.
I’d love to know whose crystal ball isn’t foggy.
jb