Wednesday, January 12, 2011

CNBC Cheerfully Announces Housing Depression

Permanently bullish (probably by decree from the higher up) CNBC reports that home values have declined 26 percent since the housing market top in June 2006.

Since the decline is more than 25.9% decline during the Great Depression, by golly the housing market is solidly in depression! And it's the 53rd consecutive months (as of November) that home values have fallen!

But if you listen to the timbre of the article, you may conclude it's a jolly good fun thing, just like the comedy "Home Alone"...

From CNBC:

As the economy revs back to life, with signs of hiring on the horizon, the housing market is being left behind like Macaulay Culkin in “Home Alone.”

In the past few years, we’ve all been careful to choose our words carefully, not calling it a recession until it fit the technical definition and avoiding any inappropriate use of the “D” word — Depression.

Things were bad but the broader economy never reached Depression territory. The housing market, on the other hand, just crossed that threshold.

Home values have fallen 26 percent since their peak in June 2006, worse than the 25.9-percent decline seen during the Depression years between 1928 and 1933, Zillow reported.

November marked the 53rd consecutive month (4 ½ years) that home values have fallen.

What’s worse, it’s not over yet: Home values are expected to continue to slide as inventories pile up, and likely won't recover until the job market improves.

And while the president is physically protected in an emergency, whisked to a bunker at an undisclosed location, the actual White House is not: The value of 1600 Pennsylvania Avenue has dropped by $80 million, or nearly 25 percent since the peak of the housing boom. It’s current value is $251.6 million, according to Zillow, down from $331.5 million.

At the end, the writer (Cindy Perman) even starts to sing the National Anthem. I just couldn't reproduce that singing above, as I felt so put off by her mindless dribble.

In many parts of the country, homeowners would be lucky if the decline is only 25%. After the real estate bubble burst, home values in Tokyo declined more than 90% from the peak, while commercial properties in central Tokyo saw the value dropped to less than 1% of the peak. Some parts of California so far have seen 75% decline since the top.

You would hope that is the bottom...


Post a Comment