Housing Market Can't Get Going

It's hard to understate just how much damage the Federal Government and its proxies have done to the U.S. real estate market. One of the reasons is that we still don't know how much worse it will be or for how long. Zillow has some new stats:

Home values fell three percent in the first quarter of this year, marking a pace of decline not seen since 2008 when the housing recession was at its worst. Home values fell one percent between February and March and 8.2 percent from March 2010. The cumulative decline in home values since the market peak is now 29.5 percent (see Figures 1 and 2).

Nearly three-quarters (74.5 percent) of homes in the United States lost value from Q1 2010 to Q1 2011. That’s up from Q4 2010, when 69.2 percent had lost value, but is down substantially from a peak of 85.5 percent in Q1 2009.

A record (37.7 percent) number of homes sold in March were sold for a loss. The rate of homes selling for a loss has steadily increased since June 2010.

Negative equity in the first quarter reached new high with 28.4 percent of all single-family homes with mortgages underwater, from 27 percent in Q4.

As your humble real estate expert, I can tell you with complete certainty that I don't have the foggiest idea when the market will begin to stabilize and anyone who tells you they do is full of it.

No one knows how long it will take for all the foreclosures to work their way through an already overwhelmed system. Nor is it clear how many non-performing loans are still on lenders books at full value that are being slowly liquidated lest they go belly up if these securities were liquidated and marked to market today. Those balance sheets are just smoke and mirrors and that's why the Fed is lending them money at 0% and selling them treasuries at 4%. You're paying the bill for this and all the government's other reckless spending through inflation from a debased dollar and debt as far as the eye can see.