Downturn in Housing—Nothing has Changed

Nothing has changed in the last two years. Bankers still get obscene bonuses, and the ordinary Joe is still being robbed by a system arranged to suit the rich. A report from the W P Carey School of Business at Arizona State University suggests a new downturn in the housing market.

Foreclosures had been held steady by foreclosure moratoria, but as these played out, it seems the rate of foreclosure is going up to where it would have been otherwise. In the last few months of 2010, foreclosures had fallen to 30 percent, but, in January and February 2011, it had risen again to 43 percent of recorded sales. Associate professor of Real Estate Jay Butler, who wrote the report, said:

January 2011 showed a re-emergence of troubled times, which continued through February.

Housing prices were also being influenced by foreclosure related activity. 40 percent of normal market sales were resales of previously foreclosed on houses. Adding these to the 43 percent of sold foreclosed houses means 66 percent of the market in January and February related to foreclosed buildings. That and the absence of a strong move up market, which is fundamental to a housing recovery, is restricting growth in home prices, leaving many home owners in negative equity.

The median price for the traditional market in February was $127,500, which is an improvement over the $125,000 in January, but down from $140,000 last year. The foreclosed properties in February had a median price of $141,385 in contrast to $143,580 for January and $153,695 for a year ago. Even expensive homes continued to be foreclosed, with 19 being over $1 million in February, so people who consider themselves middle class are being hit too.

The ones who are not being hit are the 0.1 percent of the population who rule the country, the mega rich, whose wealth equals that of the poorest half of Americans. Half of Americans is around 150 million! The mega rich, have as much money as 50 percent of all Americans and the proportion is rising each year. These people are never satisfied by however much they have.

The sad thing is that so many Americans are intoxicated by the American dream, that they can, somehow, be one of the mega rich. A dream is all it is for 99.9 percent of Americans.

Wise up, Yankees!