Forbes Views on the Housing Market
What are we going to call the “economic downturn that we’re in? Is it serious enough to be called a second “Great Depression”? Is it just a bump in the road that doesn’t need a name?
Comment below to give in your suggestion.
Some people are calling it the “Great Recession.” I guess that might be fitting since, at least in the housing market, the burst bubble is just too big to ignore.
Forbes.com just released some scary statistics about what’s happened to the housing market in the last few years. You’ve got to check it out just to see how serious things have been (and might still be!) Here’s a link to the original article: http://www.forbes.com/2010/04/20/housing-foreclosure-unemployment-opinions-columnists-thomas-cooley-peter-rupert.html
Forbes article basically scared off the optimists by saying there’s really no basis to say we’re out of the woods yet. That’s certainly right, and we’ve got to see the gains we’ve made in terms of the big picture.
The first figure they show is that this recession far outstrips previous ones in terms of the percentage increase in foreclosures. That means essentially that all bets are off as to when it’ll end.
Also the report points out that even states that didn’t have a great surge in prices also had a recession. The next figure shows that only in the most recent recession was the entire country affected. 
What do you think that means for our recovery? Comment below and let me know.
One of the key factors that makes this housing market downturn stick is that it is combined with high unemployment. The figure below shows that it’s only for this recession that housing prices took such a drop. The graph of unemployment shows an equally steep change.
So how far have we come in this recession? Well, you might think Forbes comes off a little political with their data. They claim that the homeowner assistance programs haven’t done anything to slow the rate of foreclosures.
What do you think? Leave a comment and weigh in on the subject.
2009 had 2.8 million foreclosures. 2010 is heading towards 3.7 million.
The problem, according to Forbes, is that the unemployment problem hasn’t been tackled. People can restructure their mortgages from here until next decade, but it won’t help a bit if they don’t get a job.
Basically, they conclude that the debate may rage long about the economic situation and how severe it is, the housing market definitely needs to be considered endangered.
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