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  • From: Clansgian AT wmconnect.com
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] I found a house
  • Date: Thu, 6 Mar 2008 21:17:32 EST



> >Do the housing bubbles run on 20 or 30 years cycles?

Lynda,

The scuttlebutt is this isn't just another cycle.

First there are the superlatives in the data. Todays stat was that equity in
homes is lower now than it has been since 1945. The country returning from
war and with GI bill money suddenly there were millions more in houses and as
you'd expect,. the bank had most of the equity. Now with the smarmy loans
that
enabled the bubble, 100% and more, equity is at historic lows. The stat
homeowners hold less than 50% equity in their houses on average for the first
time
ever.

That was 'ever'. It's one of those words that carries some headiness like
'never'. That's taking all homeowners including those of us who have 100%
equity and averaging them together and the average, for the first time, EVER
is
less than 50%.

Looking at the cold, hard stats one comes across 'ever' and 'never' many
times. Most and largest percentage of houses in foreclosure ever, greatest
and
fastest drop in home values ever, biggest number of houses and largest
percentage of houses with negative equity ever, largest number of unoccupied
houses,
largest number of abandoned houses ... ever ... list goes on and on.

Moreover, with transportation costs rising rapidly, heating costs rising
rapidly, and water in dubious supply, many see the end of suburbia upon us.

People like to point out that stocks can't be compared to real estate since
with real estate you have something, well, 'real' and with stocks they can
evaporate entirely. This of course, isn't true, many if not most comapnies
have
some real assets as real as house and property. That's why in bubble of tech
stocks, they lost more than half their value but did not got to zero. The
NASDAQ at it's highest was over 5000. People who saw their investments
evaporate
said, "It's always cycled, this is just another cycle." But here eight years
later, it's still less than half the value it was then. The loss was
permanent.

Because of the extent of the problem and the superlatives involved and the
world energy situation, many see the devaluation of real estate as being a
cycle
from which it will not recover in our lifetimes.

James </HTML>




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