Home Second Leg of the Housing Decline Set To Begin

Second Leg of the Housing Decline Set To Begin

user profile picture Chris Martenson Jun 28, 2010
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LinkSecond Leg of the Housing Decline Set To Begin

Executive Summary

  • Housing data is weak and just took a turn for the worse
  • Stimulus efforts were essential to keep housing propped up
  • The stimulus has ended
  • QE and stock market prices are correlated
  • What’s coming next
  • What you should do

We bought our house in November of 2009.  This will turn out to have been a very bad financial decision.  We’ll be underwater on that purchase for a very long time; maybe forever (or until Bernanke’s great experiment takes the final turn towards massive currency destruction and inflation; whichever comes first).   

Of course, we bought it knowing that.  Our decision to buy centered on our valuing time more than money.  What I mean by this is that all of the changes that we are now fully engaged in around our house, ranging from insulating to installing solar panels to putting in a fruit orchard, all take time.  Time became more important to us than money, and so we bought.

But for every nation dealing with the after-effects of a housing bubble, what matters is that house prices start to climb again.  Of course, the housing bubble was just a symptom of the larger and far more damaging credit bubble, but housing is a useful indicator for where we are in the larger credit-bubble story.

Because of its importance to both the bubble’s bursting and its eventual repair, I track housing for signs of true recovery.

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