American house prices are at the lowest they have been for six years.
That’s where the recovery which started in June of last year has raised them to. Having trouble with that logic? Don’t worry, just remember down is the new up, and Unemployed is an incentivized opportunity for a whole new you! So don’t be glum chum, be patriotic and smile.
Lowest prices in six years and that is BEFORE the arrival on the market of a tidal wave of 7 million houses that are already foreclosed, in the process of foreclosure, owned by the banks awaiting re-sale, or is some stage of arrears which statistically speaking we can be 95% sure WILL end in foreclosure or go to market as a distressed short sale. The charts and raw figures make this frighteningly clear.
Either way combine this with the ridiculous news of a few days ago of an increase in house building (which I have to say I did not and do not believe) and you have the irrefutable evidence that US house prices have nowhere to go but down. The absolute best they could do is bump along where they are now – at a six year, negative equity low.
That is domestic ho9use prices. What about commercial property. Well the situation there is not looking good either. Commercial property prices according to Moody’s index has dropped a breath-taking 35.9% in the last two years. In the quarter that ended in July prices plummeted 10.9%! The rate of decline is increasing.
A huge amount of American commercial property loans are held by the regional banks. So another measure of the state of losses on commercial property is how many of those banks have gone bankrupt. And the answer is 124 so far this year. Which is DOUBLE the rate of bank closures in ’09. Another solid data point supporting the claim that everything is fine, we are in recovery.
So will the Fed feel it necessary to ‘support the recovery’ with some money printing and tax-payer funded buying up of yet more bank ‘assets’ and debt?
Best to leave it to the experts who have done such a sterling job so far and who, we all know, have nothing but the best interests of the ordinary citizen held close to their stoney at hearts.