Yes, this is not a bad thing - prices going back to pre-overvalued days where they should be. Jacking up the prices with the onset of low interest rates was a big no-no.

I agree, but there certainly are some deals too good to pass up at this time, so if it is the right house, pull the trigger. I'm excited about this news cause it makes me want to purchase another house in a year or so. I'd love to have a second home, and prices falling makes that more and more possible. At least where I live, you can buy a house and pay less in mortgage than you could if you rented. Mortgages are about 1/3rd rent right now. Time to buy buy buy in my book.

Add a couple more years to the beginning of a recovery.

Who cares what the house value is right now if you are looking to create a home for your family?

Buy what you can afford now, live within your means and upgrade later. Your kids will thank you for it in the long run.

Japan real estate price have gone down for the last 20 years and the US will have the same experience. As long as banks and the Fed. are artificially holding prices higher, this will drag on for much longer(years). Those of us who are looking for fast price adjustments will NOT see it and must wait.

It has been one continious downward trend since the dems took over in 2007.( for everything )I would wait another year or just before the election for the upward movement,when the White House is got some real change.

First we need jobs and that wont happen with this idiot in the House.

Melting,

Thanks to failed Obamanomics and a President with no economic brains at all.

You reference a president with no economic brain, but how could Bush know anything about Obamanomics, he was still a state senator when Bush began to wreck our economy?

Nice try at blaming the little guy though, instead of the banks. Those poor banks are the victim to you...true Reaganomics lemming.

Dave,

Jobs? Yeah I suppose it's the governments job to create jobs, what are you a socialist? That idiot extended tax cuts and that were supposed to create jobs, so you would now agree that tax cuts don't create jobs? Why aren't you blaming corporations for purposefully driving down the cost of labor before they create any jobs?

How many trillon in stimulous money and there are less jobs now then before,its not the governments job to destroy jobs but they did. and by the way it was clinton and frank NOT Bush that made the banks give away free loans which destroyed our economy. Check your fact first before posting. Nice Try !!

And lay off the cough syrup before breakfast

No trillions in stimulus money. Next question?

The banks never gave away free loans. They started running out of loans to parcel and sell to their investors, and so they decided they needed government cover; they went all weepy-weepy and concerned about the poor folk to Congress to get Fannie and Freddie to loosen requirement for guarantees so that they could continue packaging and making huge bucks packaging trash.

Nice try - why not blame Carter?

Listen to the greedy bastards they are here in strength, the same greedy bastards that got us here. While your holding on to your money for the purchase an investment home, the economy continues to spiral down, you want to be the last person in the US with equity in his home? Some folks out there are losing "legitimate pre-boom old fashioned meant to help them retire one day natural equity in their primary residents" wow what good deal for you greedy bastard, keep it up greedy bastards.

That's whats wrong with this country and we are not going to fix that with a new president or new congress. The only thing that can fix this humanity, is a conscience, a will to believe in and love humanity rather than money.

ImMelting, pre 80's you say? LOL I have news for all of you, a house is just a collection of commodities, nothing more. It is copper, steel, wood, concrete, glass, sheathing, wiring, cabinets, piping, fixtures, bricks etc, etc.......................

Those "commodities" cost MONEY. You can not buy those commodities any cheaper than right now, they will NEVER be lower than they are today, because INFLATION is coming, just a matter of when.

So those who value homes based on something other than "true cost" are delusional. In my neighborhood prices are RISING, not getting lower. You can not judge where I live on BS #'s from Tampa or Vegas or Tucson. It has ZERO bearing on my market because this area is out of the recession, those areas are still in one.

Want to put the "blame" somewhere, look to Barney Frank + Chris Dodd, money for nothing houses for free.

Can't sell my house since Government Social engineering backfired and effed up everything. Or did it backfire? Can't afford gas since the government won't allow anybody to drill anywhere. Sorry, won't allow Americans to drill on American soil or in American waters. Will support and fund foreign governments to drill though.

I specifically blame President Obama for doing absolutely nothing about the current cost of energy. The last thing I want to hear is the malarkey about even if he opened up drilling the price wouldn't be reflected for at least 5 years. Guess what? They said that 5, 10, 15 years ago and look where we are?

What you are seeing in housing is going to be becoming more apparent in the whole economy over the next few months as the short-term "stimulus" bump continues to give way to reality. Housing prices will fall much more.

Goldman downgrades U.S. growth again

"economists at Goldman Sachs last week cut their economic growth forecast for the second time in a month, only to warn a few days later that "we already see downside risk to that estimate."

http://finance.fortune.cnn.com/2011/05/31/goldman-downgrades-u-s-growth-again/?hpt=T2

To all you geniuses in the housing market you priced houses out of sight and caught alot of us off guard.we the home buyer learn fast,you will not get us again.We'll start buying when the prices are where they should be not where you want them to be.Back in 2004-2005 the prices were realistic,we can wait and tell your bank buddies to speed up the process and cut loose of the money we bailed your asses out with.otherwise I know a couple of good landscapers that can keep the grass mowed on your empty homes. Signed; John Q. Public

Can't Do It, keep your moral posturing to yourself. Your broke so it's someone elses' fault eh? Nobody owes you a damn thing in this world. Don't like it?, tough. You sound like a communist to me.

I don't know where you live, nor do I care. But where I live nobody is jumping out of windows screaming the sky is falling. Life, is not guaranteed dude, it's not my job to have a "conscience" concerning my families future well being, it is my job to maximize my nest egg, not wait for "government" to take care of me. Your desires end, where my wallet begins. Sell your pity party somewhere else.

Houses are still way above norm...look at the graph.

http://www.ritholtz.com/blog/wp-content/uploads/2009/06/case-shiller-updated.png

We created easy lending, easy money and it created false demand. But yet people are like 'HOUSING IS SUCH A BARGAIN NOW'...

NO IT'S NOT.

If it went up 200-300% during the boom and only came down some, that isn't a bargain. It needs to come back down that 200%-300% because that increase was NOT REAL. It was generated by FAKE demand. And YET we have people thinking it's a great time to buy when nothing has changed. And the government is keeping houses off the market that need to be foreclosed on.

Until we get back to 20% down (which will bring prices down to affordable levels since the down payment has to be somewhat affordable...20% on stuff now would take 10+ years to save), things wont change.

And we need to require people to stay in homes that are no more then 35% of their take home income. People are in homes that are well above anything they should have been allowed to buy.

The BANKS and realtors want people to be stuck in homes that take them 30+ years to pay off..its another form of indentured slavery.

There is no way Im spending my hard earned money on a home just to be stuck in a payment and be stressed about if I can afford it down the road.

Houses need to come down and the government needs to GTFO out of the housing market and stop screwing with it and let it adjust down. Dissolve FM and FM.

I was in the Washington Post in 2006 calling the housing collapse and got so much hate mail. People are just clueless on being sheep and being lured into something that they can't think through.

Home ownership needs to come down and needs to be only for those that are responsible.

Everything was fake..and until the fake appreciation is gone, no one with any common sense with hard earns savings is going to buy and over-priced asset.

"Life, is not guaranteed" ...hmm, very true. Great pep talk. It fits all of us... Our collective future: Reflect on two numbers for a moment. The amount of the average middle-class mortgage payment and the number of years most middle-class are locked into that mortgage. Now, reflect on the global economy for a moment, and how that mortgage will play into it over time. Consider what the primary issues might be -- The issue at hand can be represented by $167 ...the difference between two small numbers, $245.50 verses $412.50. What is the $167? The monthly manufacturing wage difference between Thailand & China, which is causing some corporations to complain that China's average monthly salary ($412.50) is 'too high' and look to places like Thailand...

siamenglish.com/2010/09/14/monthly-wages-for-manufacturing-workers-in-thailand-now-lower-than-in-china

Work the numbers folks. The $245.50 Thai wages will undercut western wages every time, period. All these numbers are in US Dollars. At no time since the days of the Eisenhower Administration, have American wages averaged that low. And don’t make the mistake of thinking that the $245.50 compares to the Eisenhower era buying power (10x). Make no mistake, if we were to drop to the Thai level, that amount would effectively be $25.00 dollars in the 1950’s. The same is true of white-collar wages in India…

agriyatech.com/imgae/img_27.gif

For the last 6+ years, the company I work for has hired hundreds per year in these third-world countries, while at the same time virtually none in western countries.

thehackettgroup.com/about/alerts/alerts_2010/alert_12022010.jsp

labor.ny.gov/stats/PDFs/Offshore_Outsourcing_ITJobs_NYS.pdf

For decades this nation has systematically torn down the ‘levees’ which protected Americans from the flood of third-world wages. The 21st Century global economy (Information Technology and Manufacturing Supply Chain Management) makes the loss of those ‘levees’ critically fatal for our economy (and for Europe also). Today in Information Technology it is as easy to WebEx to the desk of an individual on some other continent as it is to the cube next to you. Today with state of the art Supply Chain Management, a corporation can produce, ship, go through Customs, and deliver by rail… as predictably as if the factory were across town. The trucks you see on the road carry 20 ton sealed containers packed by third-world laborers. Customs? In many cases that step is done in the originating port (like Shanghai). The ultimate efficiency and has changed every aspect of western economies. The point is, picture what the landscape of western countries will look like as mortgage holders complete their dive into the global economy. Picture what small business competing with multinational corporations will look like. Picture what discretionary income the small businesses customers will have. Until the broken ‘levees’ are addressed, we will continue to lose our economy and our federal & state tax base. Without that tax base, where are our federal & state debt payments? We are all in this together.

JCB, The Almighty, The Father, can hear what is being said behind closed doors. That is not his will.

( Daniel 4: 35,37 ) compare with ( Matthew 24: 36-39 )

' Thy will be done, on earth as it in heaven "

'...Come now, let us reason together...' Isaiah 1

JBC stated:

"Can't Do It, keep your moral posturing to yourself. Your broke so it's someone elses' fault eh? Nobody owes you a damn thing in this world. Don't like it?, tough. You sound like a communist to me."

If one were to post what you are, they would be banned for life from here.

"I don't know where you live, nor do I care. But where I live nobody is jumping out of windows screaming the sky is falling. Life, is not guaranteed dude, "it's not my job to have a "conscience" concerning my families future well being", it is my job to maximize my nest egg, not wait for "government" to take care of me. Your desires end, where my wallet begins. Sell your pity party somewhere else."

And we all wonder why things are the way they are today. I hope someone out here has pity on your family, you sure don't. Your thoughts should be about your family, not yourself. Being self centered and self righteous gets you nowhere in life, only ignored.

info, ( Revelation 16: 1- 12,12) ( Rev.6:16,17) War is bloodshed

Gee and of this Hope and Change is giving me a gut ache.

The Clinton administration started this with mandating banks give home loans to unqualified buyers forcing the run up in home sales. I think Obama sued Citibank over "discrimination" of unqualified buyers and that's what got the whole thing rolling many years ago.

what cracks me up is how they keep trying to reinforce the idea that the economy is recovering. sorry just because the stock market is artificially inflated and speculators are driving up commodities again does not mean the economy is recovering. anyone remember the 1930's? the stock market crashed, then leveled out for a little bit, speculators tried to get rich off the market again, and it crashed again, all the way to the bottom. we're right on the edge of the second crash, which will be much worse.

home values have been way over inflated since about 1990. probably even earlier if you look hard enough. we're due for a second market correction and this one will last over a decade no matter how much money the government prints. i for one am glad i never got caught up in the home buying scam like a lot of my freinds did. almost 2/3's of em have lost thier homes and are back living with thier parents. i used to feel like a loser because i didnt own my own home, but now i feel pretty danm good about myself these days.

hell im not even going to buy a house, i'll just purchase land with cash and build it myself, no mortgage. thats what they used to do back around 1900 or so, people didnt get loans to build thier house, they did it themselves. its the only way you can own your own home and not get completely screwed. yeah its hard work, but then nothing worth doing is easy. like signing a piece of paper and someone hands you keys to your house that you're enslaved to pay off for the next 30 years- definately NOT worth it. especially when you end up paying 300% more than the home cost in interest. how many loans would banks be able to make if they were forced to advertise the true interest rate. " hurry while rates are low, with 10% down you can get an introductory rate of 325%" yeah if people knew the truth about how much they were paying nobody would want to own a home in this country or anywhere else for that matter.

Gabriel, please note the speaker & context of my quote

Rampant developing on "open space".

Suburban plat "Mansions" with huge lawns and complicated sprinkler systems.

Large garages with gas guzzling SUV's that have TV's and ice makers.

Full outdoor patio kitchens.

Air Conditioned Excercise rooms.

Closets bigger than the old one car garages.

Bathrooms with surround sound stereo systems in the rain forest showers.

Encouragement and assurance from bankers and mortgage holders.

Conspicuous consumption without any thought to solar, energy efficiency, sustainable, renewable, ecologically sound housing.

Even if YOU didn't indulge in the Living the dream mindset..... YOU are paying the price.

A lesson that will once again be forgotten as history often repeats itself.

Yet....developers and bankers won't take "responsibility"....and some just like to blame the President.

My brother had a adjustable rate mortgage. His payments tripled and the bank refused to work with him for over a year. The only time they would work with him was when they wanted him to fill out some paperwork so they could get money from the government.

The value of his house dropped 60% and the majority of houses on his street foreclosed. He fought eviction while saving his money and then paid cash for a house down the street that looked exactly like his for a fraction of the cost.

Corporations and the rich walk away all the time. Why shouldn't the rest of us? Why is ok for them to but when ordinary Americans do they are called thieves and losers.

I prefer renting but there is no way in hell I would continue to pay on a house that Is now worth 40k and I owe 125k on.

Home prices have are headed nowhere but down. With the number of foreclosures looming in the next 3-5 years, there is no other direction for prices to go. Distressed homes sell for 40% less money than non-distressed homes. That means that these distressed homes will continue to drive down the housing values until all distressed homes have been worked through the market. These are the facts pure and simple.

Strategic Default, Short Sale or Bankruptcy – when performed correctly can truly assist American’s in rebuilding a financial future. Problem is that most Americans are complacent to wait it out. During this time, their window to select these options is quickly closing, specifically with the expiration of the Mortgage Debt Relief Act 1/1/2013 when the Federal Government will start taxing homeowners who go through a foreclosure. Homeowners will be required to include the difference between the loan amount and the final sales price as income in their tax return. If your $200,000 home sells for $100,000, you will have $100,000 of taxable income and be required to pay Federal and most likely State income taxes on this income otherwise known as debt forgiveness. Act now while you still have options, remember the last one left gets stuck holding the proverbial bag.

I have read evryone of these in this line and I see one theme in common, the blame game. I myself at some point like to play the blame game but am getting very tired of it. At this point I dont care who caused it and what was or is being done to try and fix it, we need concrete information on the plan and why it will work.

For me I see it working only one way and that way is bad, but it needs to be done. The governemnt needs to back away let the housing market collapse all the way and not prop it up with wooden support beams. When a house is old a decrepid no matter how much work you put into it eventually its going to fall and need to be rebuilt, and all we are doing is delaying the inevitable. If the markets were to be allowed to bottom out the true re-building proccess could begin.

Forclose on exisiting homeowners who can not pay, re-sell or rent the house at fair market value (assuming we let evrything bottom out). People with jobs will buy if they know for sure evrything has bottomed out, but since we are trying to prop up a decrepid buidling and evryone with money knows it, they are holding on to it. The people who are complaining so much are the people who put themselves in a bad situation, wether the governemnt allowed it to happen matters not, because ultimately it is not the govt's job to protect you from yourself, it is your responsibility.

One last thing, I am tired of all of this recession talk, we are not in a recession we are on the verge of a depression, a great depression, a worldwide depression, something that is going to forever change this country and the world and you can bank on it. Unless we do something to change it, our lives and our childrens lives will be forever altered.

Well, people "worldwide" pray for a heart of flesh. The Almighty willing, I will be back in a few months.

It might be a good thing for the buyer - but it is a very bad thing for business. Real estate dropping means banks are still not gaining on asset value - but rather dropping. Less asset value means less money they can lend to businesses, so they are going to continue to be stingy on making business loans.

Business already is losing out to the Federal borrowing needs because of the deficits and federal loans are guaranteed instead of the higher risk business loans. Adding to that the less availability of bank loans because of decreasing asset value spells a slower or even a further drop in our economy.

Banks win by losing; this is thanks completely due to our Representatives that legislate, to the behest of the Fed Reserve and it's international banking cult.

Think about this, too; before the crash of the economy, people had jobs. As more and more were sold overseas, the slow train wreck was becoming apparent. It was easy to report on ARM's, sub-primes, etc... when the reality was, the average guy with a modest payment was losing his job, and falling behind on what could easily be afforded. Typical blame hype, though.... find a scapegoat and ride it.

Jobs are sold out to 3rd world wages. Congress allows this. It's profitable for American companies, corporations to do so, Congress allows this. Congress allowed NAFTA. Congress allowed CAFTA and it's ilk. Congress allowed GLB vs. retention of Glass-Steagall. Congress allowed and continues to (insert any other abomination against the American People here.....).

I've lived at my residence for over 15 years, fixed mortgage rate, and for the last 2 years have been fighting to save it, but no more..... I didn't abuse shyt, I'm a skilled CNC machinist and certified polysomnographer. Machining's coming back, but not due to Our Clowngress, but because 3rd world wage earners couldn't cut the muster. Any in medicine has been sold out to 3rd world wage earners that are welcomed here with open arms, and any in the field will tell you 'good luck finding full time work'.

So, what they and the Fed Reserve, UN, WTO couldn't export overseas....? They simply brought overseas here.

I'm thrilled home prices are falling like turds from the sky; I don't need an investment, I have a scant few months to find someplace to LIVE. Period.

Peacefull or otherwise, there will be a revolution in America sometime soon; it simply can't continue as it has for over 50 years now......

hell im not even going to buy a house, i'll just purchase land with cash and build it myself, no mortgage.

Going to do the same thing somewhere cheap after a few more years of savings. Going to take a ton of classes on the main things (brick, wood, etc) in building a home, but let the harder things like plumbing, electrical and concrete to the pros.

Plan to rent a small warehouse and just construct the pieces there and then truck to the site and build.

Most waste is on the site anyway...build where the lumber is made/sold and then truck your completed parts to the lot and finish it up.

One last thing, I am tired of all of this recession talk, we are not in a recession we are on the verge of a depression, a great depression, a worldwide depression, something that is going to forever change this country and the world and you can bank on it. Unless we do something to change it, our lives and our childrens lives will be forever altered.

You mean our lives will go back to the 'norm' before the late 90's when everyone thought they were really valuable and going to succeed in life and make loads of money and outshine their parents.

This is just the new 'norm' that many teens and 20 year olds have no clue about. Ask those who grew up/born in the 60s/70s and they will tell you that they never were 'entitled' to anything and expected to work hard for what they earned.

We have a generation of kids and people who think they 'deserve' better but shouldn't have to work for it.

I wouldn't buy that 'banks are losing' crap either... it's a shell game. Thanks to fractional reserve, the only real money put on the line was 10% of whatever the homeowner bought the residence for. The rest was and is funny money, and since our Reps listened to the Fed and the international bankers, allowing and advertising this, they deserve what they get.

Will it come back to us, will we ultimately (and currently are) pay for this? Certainly, because it all rolls down hill, and we're NOT TBTF. Well over a year on health care, zero time on fractional reserve banking, Glass-Steagall, legislating towards jobs remaining in and coming home to America for Americans. Red or Blue, Corporo-government wins and grows..... but the time has come.

lol Only in America, only in America can a non-college graduate like me start 3 small businesses that produced 280+ high paying jobs, that included health insurance, which I later would sell and retire at age 48, 7 years ago. I "did", while you wine and complain. I also never had a 30 year mortgage, unlike many of my peers, I lived "within my means", not McMansioning, but living within my means, paying off my first three homes, clipping coupons and driving used cars. Now I live in a large home I paid cash for.

I don't like pity party's OIA, and I'm sick of people who feel entitled to someone else's money. I live in a can do world, life's a banquet and most people are starving. Most people are overweight and lazy too. I don't buy any of this "oh things are bad", this is EXACTLY the time dreams are made, money is made and people reach for the stars. You see things as they are, I see things the way they could be. You sir are "can't", and can't never did nothing.

Cubsfan,

Right on! It is not the government's job to protect me from me - that is my job and if I fail, I can only blame myself, learn my lesson and move on.

Sometimes the right thing to do is the hardest thing of all but tough decisions need to be made.

The only blame I have is that I wasn't aware that they had lessened the underwriting criteria for qualifying for a loan. The government and media didn't report this as a possible disaster. The alarm was raised but with the media in the pockets of those trying to social engineer everyone into a house, regardless of whether or not they could pay for it, they kept their collective mouths shut. I played by the rules and got screwed anyway. So eff the media and the horse they rode in on.

The housing market like all others are subject to supply and demand. Right now we are seeing a huge supply and relatively no demand. Granted people want a place to live and people need a place to live they just cant afford a place to live. Thus a huge supply and no demand. Until the cost issue is addressed I expect the housing market to remain in the gutter. 5-7 years is optimistic I think more like 10-15 years.

The reason I say 10-15 years is because of the numbers. First off you have to understand that there are about 120 million families in the U.S. We also know that there are about 30 million apartment units in the U.S. And right now there are about 140 million Single family houses in the us. Which leaves us with an excess of about 50 million housing units in the US. About 5-10 million of these are second homes but even so that is still 40-45 million homes with no families to live in them.

Your not going to fill that many empty units in 5-7 years that would require between 5 to 9 million homes being filled every year which is impossible because we only add something like 500,000 families in the US each year.

There is one thing you can infer from this and that is most likely house prices will continue to fall for the foreseeable future. Eventually prices will reach equilibrium and my guess is that equilibrium is at least 8 years away. Good for future generations of Americans terrible for the current one.

For those of you looking for somebody to blame you can thank Mr. Milton Friedman (R.I.P.) for our deregulated markets and trickle down economics which lead to the greatest housing bubble of all time. Now where did all that increased wealth that Mr. Friedman spoke of go to I wonder? Sure as hell isn't in my wallet.

As for fixing the problem best case scenario we increase immigration rates to create more families to suck up the extra houses but given how the Republican party is very anti immigrant don't count on it. The only other alternative is to destroy the excess housing and this would be totally counter productive and immoral. So like I said more likely 10-15 years possibly as long as 20 years for the housing market to go back to levels we saw in the early and mid 2000's.

Greg: Your increase immigration to help buy houses idea reminds me of the farmer bringing in alligators to control the nutria in his stock pond. There are poor job prospects for the people here and you suggest bringing in more applicants for a dwindling supply?

Reading some of these posts, All I can say, some of you are complete idiots!

Home prices are still over price? Are you kidding me, you can buy a home cheaper than you can build one, so what price do you want the housing market to crash too 40 year lows? Housing prices are down to 20 year lows, do you know what that means? middle class, who played by the rules, bought there home way before the ridicules house boom Lost all there equity and all the money they paid in 20 years, and now they are underwater, all the money they paid is gone, Big part of our economy depends on the housing markets, the middle class who start small family business, can no longer pull there money out of there homes, to finance there dreams!

Some of you still haven't learned jack. "buy now", "wait till later".

When will Americans get the point that you can't "time" this stuff. Homes are for living in...not a part of the stock market. There is the "market" where you park your extra money if you want to "save for retirement" or "make a profit". You buy a home when you need to live in it...make sure you can afford it for 30 years...and LIVE in it. If fortune strikes, then maybe you can upgrade or if you need to MOVE. That's what a home is!

If you continually want to time the real-estate market to make the "best virtual profit" from your "home investment", be prepared to loose your shirt (or home). Just like those ppl who lose their Lehman Brother's stock...so shall you lose your home and go into the street!

I hope it continues to drop. Folks have forgotten that a house is YOUR home and not a piggy bank.

I'll be buying a home as soon as I can afford to do so - hopefully by this time next year.

I pay $900 in rent, I can afford paying $1500 - $1800 mortgage, so why not? Maybe prices will stay low or even go lower in the next 2 - 3 years, but if you look in the long run - in 10 years prices would have sure gone up.

Not to mention that real estate is great protection against inflation.

mygirl1

No offense meant but you do not seem to understand immigration very well. For instance did you know that an immigrant is between 2-6 times more likely to start their own business? Or did you know that for each immigrant that we take in 2-4 new jobs are created? Or did you know if we increase the number of immigrants that we allow into this country you would drastically decrease the number of illegals entering the US? Furthermore we are going to need every worker we can get just to pay down the debt that the federal government is racking up.

Not every immigrant is like those illegals that you see broadcast on television. Most are hard working tax paying Americans who came here looking for opportunity to succeed.

If we are going to get out of this mess we are going to need to grow ourselves out. The only way we can effectively do that is to increase the population. This can only be done one of two ways we can either increase the birth rate or increase the immigration rate. You willing to pop out ten children over the next decade? If not I would highly suggest you get on the pro immigration bandwagon.

rasmasyean

I wasn't trying to argue the sociological issues behind the housing market merely pointing out the economic issues. Yes I couldn't agree more that a home is where you raise your family. And yes in an ideal world this would be how every one approached the issue.

Unfortunately over the past 15-20 years or so many people treated there home like a personal piggy bank leaving them extremely exposed to debt. As a result many people are "stuck" in their homes. This predicament wouldn't be so bad during good economic times but during bad economic times it adds insult to injury.

How are they supposed to get a job if they are "stuck" in an area that simply doesn't have enough jobs to go around furthermore if they forfeit their homes their credit will be destroyed making it that much harder to get a job? This basic fact is sending shock waves through out our economy leading to a basic downward spiral on housing prices harming those that did or are doing the right thing right along with those that did not. Add to this the excess labor on the market and you get depressed labor cost making it that much more likely that if you are employed you could be terminated in favor of the lower cost worker.

ecib-1054871

Your idea of pulling equity from you home to start a small business is absolutly a bad idea to begin with. First off 9 out of 10 small business fail within their first year and of the 1 that suceeds past the first year 9 out of ten of them will fail with in five years. Taking on debt to start a business is in general a very bad idea given these basic statistics using your house to get a company going is absolute insanity.

If you need more that 2 or 3 thousand to get a company going i suggest you look for business partners that you can spread the risk of failure with. This will help you to avoid debt until you get your business established as well as preserve your own personal finances in case of business failure. You should really only be taking on business debt as a growth mechanism not as a start up mechanism.

DicKCranium, No matter how you slice it the blame falls squarely on the buyer. Maybe you are not like me, but I tend to research even the most smallest of purchases I make, so home buyers should have done the same, i mean we research buying TV's to see which one is the best and those for the most part cost less than a 1000 dollars so why not research when buying a home that costs hundreds of thousands of dollars. Also when purchasing a home shouldn't a little lite go off in peoples heads, my family makes 65k a year yet we qualify for a loan to purchase a 400k home, do the math, the numbers don't add up.

James, actually what I am talking about is going to a time where our children have little to no hope of having a better life than us, the sense of entitlement is not something I was en-stilled with nor am I en-stilling in my children, the only thing that I was en-stilled with was knowing that I have to work hard to get what I want, the same thing I am going to give to my children. What evryone else does, well I cant speak to that....

Greg -

I agree with you, this is a supply and demand problem.

Everyone loves to blame the government, or Obama, or Congress, blah blah blah. It is all about SUPPLY AND DEMAND.

Right now there is a surplus of supply, and very little demand. Now, the Republicans want to lay off hundreds of thousands of public workers, increasing unemployment and pulling demand even lower. When people do not have jobs, they can not afford a home. Thus, we get another housing supply bubble. Eventually, that bubble will burst again and housing prices will drop down to equilibrium.

You are correct, 8 - 10 years of housing declines until we reach the new norm.

The sad fact is that many people here fail to realize how supply and demand affects the housing AND job market. These are the same people blaming the government or the President when they are underwater, yet demand additional public lay offs.

It's not a supply vs demand problem..it's a cost problem.

No one who has worked hard for their money and savings is going to drop anything into an over-valued property just because they can afford it. They got there through fiscal restraint and responsibility.

Debt is never a good thing...not even a mortgage.

All my friends said I was stupid to not buy during the boom and I told them that everything in our area was extremely over-valued and they all laughed. Now most of them are underwater and in debt. And none of them were fiscal responsible people who saved...they just were people who had good paying jobs.

Like many say...most people who have money got there by being frugal.

James -

Yes, a cost problem which is a factor of supply and demand

No one who has worked hard for their money and savings is going to drop anything into an over-valued property just because they can afford it.

Agreed, this represents the demand side of the problem . . . or lack of demand. When people are not willing to invest in over-valued properties, this means there is a reduction in demand.

Foreclosures, and lay offs which force people into foreclosure, result in a surplus of supply . . . in addition to new homes being built. Thus, we have a supply bubble.

When demand is drastically less than supply, the price of said good must reduce to meet the demand. Meaning that prices must come down to meet the demand (or value) at which people are willing to purchase.

I did the same thing as you. In 2005 people were telling me that housing prices will constantly rise, I believed they were over-valued. So I did not buy. In addition, the housing market has historically moved in waves, and we were at the crest. Now they are dropping, and I am holding out for demand to pull the prices even lower.

Thoughts from Cali

It could be much worse then even my predictions though as many people have lost the desire to even own a home. You can toss the cost issue right out the window as there are many people especially among the younger Americans who are saying "screw owning a home I am a renter for life and i like the freedom of choice this gives me". If this is the new norm then housing prices may never recover.

Up side is that the rental markets are looking good I would highly recomend looking in to companies that own or build rental properties. Their stocks have been doing great lately and stand to do really good over the next 3-4 years. Definitely good time to diversify into them if you haven't already.

Greg -

Good point . . . with demand for rentals increasing, and driving up costs, there might be a great long-term opportunity. Thanks for the tip.

JCB stated:

"lol Only in America, only in America can a non-college graduate like me start 3 small businesses that produced 280+ high paying jobs, that included health insurance, which I later would sell and retire at age 48, 7 years ago."

Well, aren't you the man? Would you like a cookie, or a dollar? The man I worked for started his company in a garage in 1958 by himself, built it up over the years and now employs over 350 people. He is now 83 years old, still owns the place, comes into work everyday even if it's just to chat with the workers. He has been asked many times why he doesn't sell out and retire. He tells everyone the same thing, he loves the people that work for him, and that he would worry about them if he were to sell the business, because he knows how corporations work, it's about profits for them, even if it costs the employees. Even his son said that if anything happened to his dad, he would have to run the place as his dad did. Why? Because, his best employees would not tolerate being shafted by a corporation, and would leave. When you have good people working for you that work their butts off getting a product out the door everyday, you tend to try and take the best care of them that you can. He even set up a nice profit sharing program years ago that is still going strong even today. Can you say the same thing JCB? His whole family is just like him, they are everyday people, just like those that work in his factory.

"I "did", while you wine and complain."

Do I wine? I must say, I do like a nice glass of it every now and then. Complain? The only thing that bothers me, is the lack of humanity in some people. Do I think people should get something for nothing? Nope, and if you can show me where I give that impression, by all means do show me, if you can.

"I also never had a 30 year mortgage, unlike many of my peers, I lived "within my means", not McMansioning, but living within my means, paying off my first three homes, clipping coupons and driving used cars. Now I live in a large home I paid cash for."

The only difference I see between you and my old boss is, they still live in the small ranch style home they have had since the 50`s , nothing fancy.

"I don't like pity party's OIA, and I'm sick of people who feel entitled to someone else's money."

If the person is just giving a sob story to get a free buck, sure, I understand that right along with everyone else. But what about those who are really in need? Let them go hungry? Turn our backs on them? Are they entitled to someone else's money? No, but I would still help them as much as I could, because they are still human beings, not dirt under our feet.

'I live in a can do world, life's a banquet and most people are starving."

Life's a banquet? More like a lesson I would say. It's what we learn about ourselves inside that counts, not how many dollars we can make before we die.

'Most people are overweight and lazy too."

Being overweight is a crime now? Being lazy is another story, lazy gets you nowhere in life.

"I don't buy any of this "oh things are bad", this is EXACTLY the time dreams are made, money is made and people reach for the stars."

When money takes the place of humanity, or even spirituality in a persons life, in the end, you lose.

"You see things as they are, I see things the way they could be."

Yep, it's a me me me me world, like the one your promoting.

"You sir are "can't", and can't never did nothing."

And you sir, are an arrogant piece of work, and I'm trying to be being nice about it.

Thoughts from Cali

There are always opportunity out there you just need to look for them. I say do not chase what everybody else does because most of the time they miss the big opportunities. Like right now everybody is chasing commodities and thus driving up the prices creating another bubble. And just like the housing market these bubbles will ultimately burst leaving shattered dreams in the wake.

For instance everybody on the news is saying "Oh gee I think the housing market will recover in mid to late 2011 (this being back in 2009) and now they are saying well maybe 2012. These fools dont have a clue as to what is going to happen because they are still thinking pre 2008. They forget just how bad so many people were burned by the housing bubble and their risk aversion has increased so much that it could be a generation before we people see houses as anything other than debt.

Rather sad because risk is essential to growth but the greedy wall street bankers have managed to kill off millions of Americans idea of risk/reward. Fixing this is the heart of the problem but if people dont start seeing some reward for the housing investment that there family and peers are making they are unlikely to make there own investments into housing. Still the news on MSNBC is that people want to own a home but i wonder what people they are talking to because it sure as hell isn't this person.

Greg wrote "As for fixing the problem best case scenario we increase immigration rates to create more families to suck up the extra houses "

How will jobless immigrants pay for houses? But seriously, what is wrong with falling house prices? They are still above historical norms. Do you have a vested interest in rewarding past house buyers at the expense of all future buyers?

Greg wrote "It could be much worse then even my predictions though as many people have lost the desire to even own a home."

Price has everything to do with that. Should Americans have a desire to overpay for real estate?

RC has it here:

First time home buyers, hold on to your money

You can buy now - on one condition, and that condition has remained constant for decades.

Never spend more than twice household income on a house - ever. If you want to buy a $250,000 home, you had better be pulling $125k a year. This is a gift - it should be 1.5x. This is quite easy to do, as long as you're not in a boom.

3x household? Pathetic.

Nothing cripples your finances more than your biggest expense. Can't buy other business's products, they lose business.. they don't hire....

I do recall hearing in 2008 that it may take up to a decade for the housing market to recover.

The housing market will never "recover" to the level it was, and it shouldn't because it was WAY over-valued driven by lenders [forced to] making 0 down, 6% loans, and interest only loans to anyone with a pulse. I'll hold B. Frank and Clinton responsible for making this happen, and Bush responsible for not forcing congress to get the out-of-control risk liability under control.

... It's a lot like the "new economy". We have very recently lowered the bar to where any unemplyment below 9% will be heralded as a booming economy, and any wages held even for 2 years will be considered "acceptable and expected", and 5%-7% inflation is now within "normal" levels ... welcome to Obamaville.

We have avoided massive inflation so far, but it looks to be on the horizon. House prices may continue to drop, but I would bet once the buying begins, interest rates will skyrocket.

Blaming any president doesn't help anything right now. It is what it is and we need to focus on the future. Mistakes were made and Lord knows I've made my share, but who really cares who's fault it was more than why the decisions were made and what to learn from them.

SeveJ, I don't know about hyperinflation and skyrocketing interest rates. You just can't do that in a recession. You can, but I feel the results would be, for lack of a better word, catastrophic.

The real question now is what would you (all the posters here) do to fix the problem???????

Tiggle; see my post 1.33.

How about shutting fannie and freddie down? Dump ALL loans and shut them down.

The recession has ended. However, salaries for new hires are much lower and they must provide for their own benefits. That doesnt leave much cash for a mortgage. You add to that the now credit criteria. It's hard out there for a worker

The last I checked there are 536 members of congress the majority of which are Republicans who have had power since January and haven't done a damn thing to create jobs or improve the economy. Blaming Obama is rather ridiculous as he can only approve or deny what Congress decides to do and Congress I.E. the Republican Party has decided to do absolutely nothing over the last six months and now guess what we are in recession again. Your blame squarely lands on Republican shoulders and if you are to stupid to figure this one out you deserve every harm that comes your way I only hope there isn't to many innocent bystanders that get hurt by your ignorance.

Tiggle,

What you wind up with is Stagflation. The combination of a stagnant economy and high rates on inflation. The dollar is already weak and the fed has been adding to mo the monetary supply through deficit spending. Additionally, this extra cash is not being released by the banks through increased lending.

Stagflation is considered one of the ultimate economic contradictions. If you implement policies to combat hyperinflation, unemployment stays high. If you use traditional economic policies to fight unemployment in can drive inflation out of control, which also continues to devalue the currency.

In my opinion, the problem we face come from the economy becoming so globalized. America has lost its ability to compete on price. Additionally, our free market economic policies have allowed unfettered investment in US based markets, but the investment in developing markets like in China and India have been restricted somewhat. US corporations benefit because they can setup manufacturing and create growth in these countries. Places like China can heavily control their currency to a great degree.

We had a competitive advantage in technology for a long time which helped to support the economy, but we are losing that fairly quickly. The only way to create growth is to develop an advantage in some area, otherwise jobs will not return until the cost of labor in other areas becomes comparable to the cost of labor here. We could also accomplish this by implementing high tariff's for imported goods, but that can have serious ramifications as well. I think we will continue to suffer in any case. The only other option is to accept a high level of government oversight and control in the US market.

Why should the President be in charge in housing prices?

Because Steve wants a socialist country that controls housing prices.

Yeah, the president didn't tell realtors and sellers to jack up the prices when the interest rates started going down. The lower the rates went the higher the prices went.

Absolutely right, Mark.

The same people who gripe because Obama isn't raising house prices, lowering the price of gas, creating private sector jobs, and regulating industries in general for what they want, then scream bloody murder when he does something to control healthcare costs (a national emergency), successfully bails out the auto industry and is paid back, and pushes financial regulations to prevent and control what got us in the trouble we're in now as socialism and how the Federal government needs to stay out of everything and leave it all up to the states.

The allowed exceptions to state rights, however, are in the cases of abortion, same-sex marriage, and other moral issues where hypocrisy rules and it's perfectly fine for the Feds to tell the states and individuals what then can do and do not want the states to have any say.

Yeah, the president didn't tell realtors and sellers to jack up the prices when the interest rates started going down.

He did however waste Billions of taxpayer dollars on a failed housing stimulus which caused a temporary uptick in housing prices last year. Without the artificial taxpayer giveaway this year house prices are again heading down to where they belong thus the double dip. Lenders foreclosures have slowed not due to lack of them but because of the robosigning scandal and government intervention. At the current processing rate it will take 4 years for lenders to process just those loans that are currently in default. Of course many more will default during that time period especially as values continue to fall and the owners jingle their keys. Now is a great time to wait, not to buy, while prices continue in their deflationary spiral.

immelting,

are you just gonna keep copy/pasting the same drival all day long?

Mostly it hasn't saved a penny because most of its provisions haven't gone into effect yet. So it's interesting how our seniors are getting screwed.

But Medicare is dead. Didn't you know that? Go talk to Paul Ryan.

It's always Bush's fault...but Obama doesn't have any control ? Which is it ? Come on ! You cannot have it both ways....They are ALL crooks,liars ,and thieves...and our children and grandchildren will pay and pay and pay and pay for what WE have done by "electing" these idiots...it WILL take a revolution to bring back what this country once had. Those who blindly follow and support the powers that be, I pray you one day will see

See my comments in past articles on ImMelting.

I agree to a point. People should start walking away from their mortgages. the banks are not willing to work with people to help them and the banks bottom line.

So lets pull the rug from under the whole system and start over. We bailed the banks out more than once in my 41 year lifetime. WE SHOULD STOP and let them fail if they mess up that bad.

The US should go back to the Gold Standard...dealing in debt is part of what got us where we are now.

2 years in office and he's responsible for the housing bubble that burst prior to his election,It's political party line nonsense like that ,that causes nothing to get solved.No president caused the housing crisis greedy bankers, realtors,and wall street caused this,blame the actual criminals not the other party bacause you have no solutions of your own.

What?-3106699

At least you got my point.

Gee could it be Congress considering the removal of the mortgage tax break to fund their continued drunken spending spree?

Steve

I wont forget that this was caused by you right winged, birther tea baggers. I wont forget that part of Ryans plan is to get rid of the tax deduction for mortgages. I wont forget to vote in 2012, kicking the elephant people out!

There is no decline in home values. Homes were overvalued through most of the past decade. Actually home values haven't been realistic since the 1980s. If you bought a house that is now worth less than you paid for it, I'm sorry, but did you seriously consider the value of the construction materials + the cost of the labor building the house + the value of the land? Because if you paid for more than that you were living in some fantasy world.

Great post Bertfw. As far as I am concerned they need to drop way more. The price of homes is extremely inflated as is the price of cars as well. Do we really need to pay $280 - 300K for a stucco home? $30k for a car? Cheap material, Cheap workmanship and the consumer got stuck with the overly price home. Prices need to come down and homes need to be built with better quality.

Do we really need to pay $280 - 300K for a stucco home? $30k for a car?

If you want made in America you'll pay through the nose. High material costs, high wages and in the case of American made cars, we have Union wages, healthcare plans and pensions to cover.

I bought a parcel of land close to the ocean in Georgia with a beat up trailer on it. Over the next four years until I retire, it will be cleaned up and a Katrina house built on it. Just enough room for me and a garden. All told less than 50K spent over five years.

Similar to this.

http://www.bing.com/images/search?q=katrina+house&view=detail&id=4858710DBB9CA57893EBCD2B496F6358398358ED&first=0&qpvt=katrina+house&FORM=IDFRIR

This is true redistribution of wealth. Unfortunately the middle class are the ones having their wealth redistributed. Too late for Obama to go back to the drawing board. But by God he'll turn America into a third world country if it's the last thing he does!

Can not have a double-dip recession, when officially the recession is over and recovery is in progress. However, many would dispute the fact that the great recession is officially over.

Declining housing prices will not "lead us into a double-dip" we are already going there because we never truly came out of the first dip, we simply had a massivly expensive short-term bump that masked(barely) the true state of our economy. Housing price declines are simply a leading indicator of what is in store for the overall economy.

Goldman downgrades U.S. growth again

"economists at Goldman Sachs last week cut their economic growth forecast for the second time in a month, only to warn a few days later that "we already see downside risk to that estimate."

http://finance.fortune.cnn.com/2011/05/31/goldman-downgrades-u-s-growth-again/?hpt=T2

This issue will be resolved right after the American people go back to work at a decent wage,I do remember someone promising jobs as a number one priority in 2010.If Americans are working we are spending,end of conversation.

@ Jim Hillard. you sound like CHICKEN LITTLE the sky is falling the sky is falling....grow up will ya? wasn't it the repuglicons who promised jobs? where are they? worried about a womans reproductive organs they say we are against abortion yet they hate welfare except for the rich. LOL people like you is what's wrong with this country everything is ME! ME! ME!

People won't buy homes if they have no jobs get it?

Why fordays, in case you hadn't noticed, the republicons have passed a budget bill that would have stimulated the entire economy by actually stifling irresponsible spending and out of control debt. But guess what happened, the damn-ocrats defeated it in the Senate. So, who's at fault here again?

spider Your statement is completely incorrect.

If I remove 10 billion from the US economy in government spending, there will be no new jobs, but a lost of government jobs, because the government is borrowing money from China.

The problem with every Republican on this board is they fail to understand economics. You can't have 80% of the US population have reduced wages, and expect Consumer Demand to pick up.

You won't have investor money flow into the US economy, if the Consumer Demand won't pick up.

You can't expect investor tax breaks to do s*** to this economy, if your not going to help the f****** worker/consumer make some money.

Free Trade Destroyed the US worker/consumer, by forcing workers to compete against each other for JOBS!

The Republican party and Republican voters destroyed this nation, and this nation will go down in flames, because the Republican voter hates the US worker.

Jim Hillard wrote " This decline in home values is accelerating and will lead our economy into a double-dip recession. "

I thought the problem was the increase in house values and the pressure to overpay for a basic necessity.

The first dip was in 2006. Since then prices have gone back up. Now they are back down to 2006 levels. WHAT EXACTLY DON'T YOU GET. 1 DIP 2 DIP, DOUBLE DIP!

You think artificially inflating prices in 2007-2008 with taxpayer subsidies actually qualifies as leaving the first dip instead of just masking it temporarily? If the market would have been allowed to correct itself housing would be a couple of years closer to finding it's true bottom. This is what you get from a government beholden to industry lobbyists and with it's eye on its tax revenue. Keeping housing artificially high during a recession was never going to benifit the consumer.

I wasn't going into reasoning. Simply stating why the article is saying double dip. It is a term not a political rundown of why something happened. It is in fact a double dip....get over it.

It is in fact a double dip....get over it.

True however I was being of the mind that things have been and remain so economically perverse that coming up for air from the first dip was merely a blip in the big picture if at all.

ImMelting

Well you sure don't have that with Bama Brain.

Actually I am a fan of the Navy Midshipmen. Go Navy!

President BUSH

http://newsgroups.derkeiler.com/Archive/Rec/rec.bicycles.racing/2008-09/msg02668.html

ALAN GREENSPAN

http://www.skeptically.org/economics/id13.html

JOHN MCCAIN

http://mcauleysworld.wordpress.com/2008/09/20/john-mccain-2006-warning-on-current-housing-crisis/

And what did the dems have to say?

http://finance.yahoo.com/tech-ticker/article/285683/Barney-Frank-Don't-Blame-Me-for-the-Housing-Bubble?tickers=len,fnm,fre,kbh,tol,xhb,hd

Where were you those 8 years? Head up the azzez of MSNBC?

JCQ

And none of those rich people went to jail. Or paid taxes on their profits

Ms Linda Brown...

Not only is the depression not over, you haven't seen nothin' yet! The last chunk of change Corporate America can steal is through the food industry; a basic need. Food prices will become unaffordable to many...even now some barely survive.

We couldn't stop Globalization or Free Trade Agreements, and we won't be able to stop this Third Plague.

Linda: Nothing American to buy? No one in California is as isolated as that..the country is still the leading manufacturer in the world, and you can't find anything to support that creates American jobs? You're not looking hard enough.

ragtopz...

Do you expect people to believe you would pay more money for an experienced worker, when you can get the same job done by a minimum wage employee? Don't let your stockholders hear about this.

Nor should it be an ATM.

Just need to change the laws to prevent the walk away. You will note there is much less foreclosure in states where you can still be held liable for the loss on the house. People took much greater risk knowing that they could just walk away from their zero down adjustable rate mortgage.

This is what bankruptcy was designed for. If you fall on bad times you give up everything and start over. Now you have people who took out second loans to buy stuff, taking all the stuff over to a new rental home and laughing at the bank.

ImMelting, you need some comprehension skills here. The OP said that homes shouldn't be considered an investment as like where you buy it and then sell it later at a higher price. You then say you disagree and say it is an investment in your community. So does that mean you think that homes should be bought and then sold at a higher cost for a profit? Because that is what the "I disagree" means. And for people that didn't buy their house as an investment, why would they care that they become underwater. I actually hope that my house drops in value, that means lower replacement cost which means lower insurance rate and also lower property taxes. So again, anyone that bought their house as a home and not an investment is most likely loving this.

So again I ask, why would someone walk away from their house they bought to raise a family in if the value decreases?

ImMelting,

Agreed that a home should be treated as an investment in your community. Also agreed that it should be a place where you want to raise your kids. My wife and I sold our townhouse more than a year ago, and just found a home that met these requirements for us last week. It is where we want to raise our family and live in long after that for at least the duration of our mortgage, God willing. But to say that anyone who bought a home after 1995 will be under water is kind of silly. The townhouse I mentioned above, we bought it in 2004. Anyone who bought in 2004 should have known, even then, that they overpaid for their home and should have been trying to pay off as much as possible if they had any thoughts of not staying in it for a long time. We took a loss, but instead of buying cars we couldn't afford, or going on multiple vacations each year, it was our simple living and aggressive paying down of our mortgage that kept us above water.

With the exception of people who were given poor financial advise from predatory lenders (even then, the buyers should have known that they were buying more house than they could afford), if a person bought a home in 1995 or even in 2000 (11 years ago) and still owes more than what it's worth, then they have obviously used it as an ATM machine and not as you suggested, as housing prices are really only down to early-2004 levels, at least here in the northeast. For this, I have no sympathy. Let's also be honest about something else here - this unraveling started long before President Obama took office, or even before President Bush took office. Prior to 2007, home prices had been skyrocketing for more than 13 years, and if a person was using a house as an investment rather than as a home, then as any investment, they should have understood that investments go up and investments go down. You can't have the return on an investment escalating for so long without it going down at some point.

Unfortunately, from 1994-ish through 2006, everyone in this country was all about keeping up with the Joneses, nicknaming money as a frivolous toy (Benjamins?? Come on...), and maximizing the bling, thanks to our obsession with our country's elite minority and cultural celebrity "role models" with whom many felt they were entitled to have just as many possessions (McMansions - how much space does a family of 4 need?, monster SUV's, second homes, lavish vacations, boats, etc.) and the belief that their s**t doesn't stink. In the end, we are all the same - we croak. Our country's obsession with money and material possessions is what got us into this mess. I too blame Wall Street for all the bad speculating that occurred with derivatives leading to financial failure, and our elected officials for easing lending standards so that anyone could purchase a home. But, our population numbers over 300 million - can this honestly be blamed on just bankers and politicians? Yes, they are, with the exception of a few, all slimebags, but the US citizens have nobody to blame but themselves, if not for their greediness over the years, then for their ignorance in believing that "living the dream" is a permanent fixture and entitlement in their lives...

IF your dollar stops losing it's value, and you can afford utilities, insurance, and maintenance that rising by leaps and bounds.

Good luck to you and your family on your first home.

ImMelting, please stop your political drivel, you are making my shoes dirty. As the OP said, this time is perfect for first time home buyers. Many new houses out there with low payments. If your credit is even halfway decent and you have a steady job, you can easily get a loan. And if you buy a starter home right now, you won't have to worry about going underwater, the price you pay on a home is far lower than the value. The home I bought earlier this year is listed at 40% of the homes value. And we didn't have to do anything to it to make it livable. Even including utilites, insurance, and taxes, our mortgage payment is less than a two-bedroom apartment in the area. Maybe you should start blaming the people that just walk away from their house instead of the politicians. Many people can afford to make payments, they choose not to because their investment didn't pan out.

its funny how you people bit-ch either way.....immelting, if obama would have set up a commission to determine when a bank could modify a home loan you would be complaining about how much the government is intruding "smaller government"..... you make me laugh

ImMelting....What really sucks is that the banks insist that you are behind on your mortgage payment before they will even talk to you about doing any kind of loan modification, and then good luck with that. Go figure if it's by design or just incompetence, but they can't seem to ever get the paperwork together after they do speak to you, and you end up in foreclosure.

I'm glad that they are being sued for their fraudulent foreclosure practices, and are now going to have to pay out all those billions that they hoarded to satisfy claims against them. It's called Karma baby!

Fortunately my mortgages are all paid off and I don't ever intend to utilize those services again, but I would caution anyone entertaining getting a mortgage to review their paperwork carefully because the banks are just going to find another way to steal your money.

Amen. Personally tried 6times for a loan modification after my small business income dropped off because of all this. The bank can have it now. We WERE pioneers in a historic community trying to raise our family with the values that you commit to your community and your city to make it a better place. We have been let down be all of it, community, city and mostly the banks!

So..... republicans are the true socialists. Look at all the whiners on here wanting the government to geve them a "handout". Help me government help me! LOL

Sally....So you had no problem with the banks getting TRILLIONS of dollars in FREE money from the Fed window at ( 0% to 1/4%) interest rate? When Sarah or Michelle runs next year, make sure you vote for them because you sound like their kind of voter!

England tried a similar stimulus on us when we were colonies. Do we the people always have to take everything into our own hands to get a fair shake?

ImMelting: if you want the ccountry to collapse, you're in for a sorry surprise.

The auto industry is still alive, manufacturing is still strong, and the financial industry is hardly reading to cut and bail. Despite your sky is falling crowd, over 90% of us who want to work are working. if you want to sit and whine, do it. if you want to move forward, get some skills and stop waiting for everyone else to 'save' you.

I like how you add the part of people who want to work... most people on unemployment don't want to work. When the company I worked for closed almost a year ago, about 15% of the 100 or so people I knew that worked for it decided to go out and find a job, the other 85% decided unemployment was nice and would just be lazy for the next couple of months.

TheManGabriel, you can choose to believe in fantasy and that's exactly what all religions are, fantasy and fairy tales. I believe in the here and now.

Good for you, it's also good news for them.

No, you'll buy it at a less overinflated value. If you managed to buy it at it's actual worth you'd end up paying what you would expect to pay for decent luxury automobile today.

Sweet. Can't wait 'til the next bubble.

Ha! Good one.

I actually agree though. This whole mess probably will get worse.

ImMelting, a house isn't an investment... too bad people didn't figure this out until it was too late. And ruckus, good luck at buying a house if you are really serious. Will the oversaturation of the housing market with forclosed properties, you will have your pick so pick a good one. Some of the ones I found were being sold for land value only.

why would any sane person buy a house now? House values are still falling, if you buy now then in 2 years you`re going to be underwater.

Around 90% of houses are being sold for half of their current value, and as I said, you have your pick of plenty of houses so if you find a good one with little work involved, buy it. Let me ask you this NB, why does it matter if you are underwater unless you are going to sell the house?

Karl, Karl, Karl...Don't give up! This governments mockery of the original intent of the 'Republic of the United States of America' will meet its demise sooner or later. Hang in there Buddy!

exactly, and if the govenment steped in to regulate it....you'd be the first to complain about it immelting!

no matter what the economy is like Realtors always say that "now" is the best time to buy. lol

The he** would you want a McMansion in the first place? You want a McMansion for two people to live in a 5,6 or 7 bedroom, 3 or 4 bathroom, a massive yard and all the upkeep. McMansions are going in the tank and they will never recover. Scre* McMansions!!! I sure as he** don't want one of those gaudy ugly a** houses and the enormous upkeep plus McMansions are so lonely unless you have a huge family, or have to buy all this junk just to fill all your empty rooms. Plus you'll have all your money tied up into this enormous house that you and your husband wouldn't be able to do anything else, not take many vacations. All you and your husband would be doing is sweating to make your payments, keeping up on your yard work, trying to hire a landscaper and trying to live up to the Joneses!!

Why would you pursue a degree in a field where you would not make a wage that would allow you to pay your student loans and for your living expenses? Sounds to me like you an your fiancee didn't crunch the numbers on the ROI. I worked full-time and went to school full-time and graduated debt free making a comfortable living wage. I am tired of people complaining about the ridiculous school loans that they got themselves caught in. Just like the fools that spent too much on their homes you spent too much on your education. Until people open their eyes and take personal responsibilities for their crappy financial decisions our country will continue to drive itself further in debt.

My Sisters college loan was almost 18K. Over the years she's paid back more than 23K. She hasn't touched the principle, still owes more than originally borrowed, and the interest rate is getting ready to increase another 6%. She pays more per month for that loan, than her mortgage payment, insurance, and utilities combined. Ain't America great?

Maybe if you didn't expect everything the moment you step out of college with that degree, you'd be able to be a bit more realistic. No one guaranteed you a job with that diploma, and there are colleges out there that wouldn't saddle you with up to $60k in debt. Even at that, over your working lifetime, you'll be making more than you would without it. Quit your bellyaching and get a clue--in the REAL world, no one hands you anything just because you got your degree.

Domingo: yeah America's great. Your sister got an education even if she doesn't know how to put it to use or paid too much for it. You get to make those mistakes here.

@Domingo - What loan shark did your sister use to get her student loans?

@AngryAmerican - You are right. People should be more responsible for their own actions, BUT until the world doesn't necessitate you spending a ton of money on a piece of paper that says you read some books, this kind of overspending mentality towards school will always exist. And as long as there are superficial morons who always need to have an updated everything constantly being fed the bile spewed by countless home improvement magazines and channels, while they worship the worthless housewives of whatever city, people will still mindlessly go in debt to prove their crap is better than yours. Unfortunately it's easier to destroy common sense than to actually use it.

Again with comprehension ImMelting, he said "home buyers". Which means people buying homes. And it is a great time for buyers as long as they are looking for a home, not an investment.

Sounds like you're going to ask them to throw in some pot and pill or two.

When you say America will follow in housings wake, are you referring to the American people, or the Federal Government. Our government (it use to be ours) considers itself a separate entity above the American people and our Constitutional laws.

If and when the American people start to realize this... hello 1776!

Domingo: back to fifth grade with you. You get the government you vote for. Waiting for everyone else to do everything else for you and to you is no way for an adult to live.

Immelting: Get a clue. You just keep sitting there waiting for the Pres of the United States (whether its this guy or the last) to rescue you from the mortgage you shouldn't have taken, or the debt you rang up...then whine, whine, whine all day about the sky falling. Good luck with that. Those of us here in the real world have a life to live.

Really......Obamanomics? Should he force private companies to hire people? Should he force them to not move jobs outside the US to cheaper labor markets? Should he extended tax cuts for trickle down non-sense? (oh- yeah--he did that already) The real fact is that the government has very little impact on the economy.

As much as you right-wingers love it, there is one thing about the Free Market that you don't understand anymore. The "Invisible Hand" is not a US Citizen anymore......The Invisible Hand doesn't care about US Unemployment Rates or the US Housing Sector....It only cares about making money to satisfy its wealthy stock holders of corporations. If that means shipping US jobs to off-shore, cheaper labor markets, so be it. My current company is creating 100x more jobs on the other side of the world compared to here....Why? because they can and its saves them millions a year. Stockholders win....USA loses....

You can bet if the Republicans get in and continue there wont be any rich left. The middle will be gone and thats who spends the money.

Look at the South they took their middle and those people are eating dirt.And if you were to check the census most people who use public assistance are in the red states the mid west and south and white

your as stupid as your comment read the census

Skippy is right. And it is not about Obama or Bush. This problem was not created today. All governments we had had the same agenda. The government is there to blind you from the truth. It is there to plunder and pillage the wealth of the middle class and get the rich even richer. This has been the norm for decades. Does not matter republican or democrat. They reward the usurers. They go against Christian values. While average Joe looses home to foreclosure (and some of the borrowers are guaranteed to foreclose), banks are made whole at tax payer expense, an expense so big it will take generations to pay it off.

Our quality of life is on decline. An entire nation cannot borrow for decades and then hope that all will be fine when the pay back time arrives. Inflation or deflation, the outcome is going to be the deduction of the real value of debt from the money supply. What was borrowed will be paid back one way or another. If Bernanke prints too much, savers will pay alot. If Bernanke prints too little, borrowers will pay alot. But at the end, when the dust settles, it does not matter who pays in a global economy. Deflation is more likely than inflation in the near term. This is because if Bernanke does not print, then it is outright deflation as debt deflates. If Bernanke prints too much, then creditors will not lend at low rates, thus reduction in credit supply will be deflationary for credit dependent markets such as housing. In any case, deflation means pool is shrinking. Here is how the monetary system is prone to inflation and deflation:

www.kondratieffwavecycle.com/credit-inflation