The never-dying subject of housing is hard to miss, and everyone wishes upon a turnaround because a home represents the major asset for the majority of Americans. But if we look back to the 1990s, we had a lost decade in housing prices. Going forward, we’ll lose two decades — best case scenario. The reasons are plenty, and have been well documented, but the debate will go on while reality will take small bites out of people’s patience. And I have a last tidbit on this subject. According to Reuters on December 29, 2010,
The regulators said one reason for the increase in foreclosures is that banks have "exhausted" options for keeping many delinquent borrowers in their homes through programs such as loan modifications. Newly-initiated foreclosures increased to 382,000 in the third quarter, a 31.2 percent jump over the previous quarter and a 3.7 percent rise from the same quarter a year ago, the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) said in a quarterly mortgage report. The number of foreclosures in process increased to 1.2 million, a 4.5 percent increase from the second quarter and a 10.1 percent increase from a year ago, according to the regulators. They said during a briefing that the numbers could send "mixed signals" about the health of the U.S. housing market.
Mixed signals? That is a nice way of putting it. Forecasts of a housing recovery are greatly exaggerated, just like I remember “experts” claiming on TV that sub-prime was not a problem and was being blown out of proportion. The positive forecasts are either derived from wishful thinking or a complete lack of understanding of what is truly going on. The magnitude of the damage incurred still escapes many, and Schiller’s House Price Index is a perfect picture of a dead-cat
