The housing market is about to explode into a full-blown disaster. Millions of tenants have been piling up their debt during the current recession and economists alert for a gigantic wave of evictions, foreclosures, and bankruptcies which could trigger a chain reaction leading the real state market to a crisis just as disastrous as the 2008 crash. Nobel Prize Winner Robert Shiller affirms that the housing price bubble largely exceeds the stock market bubble, and things are about to get unsustainable pretty soon. In this video, we examine the chaotic situation of the housing market according to experts' perspectives and expose the many determinants that have been inflating this massive bubble. As soon as the year turns, several cities will face a storm of evictions, foreclosures, and bankruptcies as the housing bubble that has been massively inflating throughout the year will explode into a full-blown disaster.
With tens of millions of Americans out of their jobs and unable to pay rent for the past several months, leaving building owners struggling to meet their mortgages payments, a new study by the nonprofit CSS alerted that this situation will probably set off a chain reaction that could ultimately lead to a housing crisis comparable in scale to the 2008 crash. CSS President David Jones explain that although the economic downturn has been the trigger for this current situation, the bubble has been in the making for over a decade. They have been pleading to political leaders to address the approaching crisis without delay, stressing that it's urgent to take immediate measures to "stop the bleeding". Some cities, such as New York, are now in a critical position since a staggering rate of rental delinquency was registered and landlords have been eagerly waiting for the end of the forbearance period to solicit the issuance of eviction orders. Since rental payments cannot be nullified, all the unpaid rent has continued to be accumulated throughout the crisis, generating an enormous economic burden that will wreck many households when the bill comes due.
On many occasions, real estate firms entered 2020 leveraged to the maximum, demanding for ever-higher rents and then borrowing against the value of those income streams. “As real estate markets soared in several cities across the state, landlords raised rents, re-sold their buildings at higher prices, and used their properties’ rising values to take out ever-larger mortgages,” the report describes. If this description sounds like something you've heard before, it's because you did. The report also recalls that from the mid-1990s up to the 2008 mortgage crisis, real estate firms started an irrational rush of buying and selling buildings and consistently raising rental prices.
Considering rental properties are usually structured as limited liability corporations, the bankruptcy of one building alone doesn't pose a harsh impact on the finances of the real estate parent company. In short, for the firms involved the market boom and bust can be like a game of Monopoly, but for renters, it can be the difference between having a safe home and being homeless. For the past decade such firms have been repeating the same misconduct, all of this could happen again next year. That doesn't mean that capitalizing in the real state market is a despicable investor attitude, but allowing the formation of a colossal wave of foreclosures at the expense of entire cities' economies just to ensure predatory investments could come at a high cost to the whole nation, warns CSS President David Jones.
Additionally, for homeowners, the outlook doesn't look any rosier. Today, there are fewer homes for sale in the U.S. than ever documented in roughly 40 years, when data started to be recorded. For this reason, it's understandable why home prices are going up much faster than incomes, making homeownership less affordable for more and more Americans. "We are simply facing a housing shortage, a major housing shortage," expressed Lawrence Yun, the chief economist at the National Association of Realtors which tracks home sales. "We need to build more homes. Supply is critical in the current environment."
On a similar note, in a recent article, investment advisor for SitkaPacific Capital Management, Mike "Mish" Shedlock illustrated how home prices are in a bubble that is even bigger than the stock market bubble. On the basis of Yale University professor and Nobel Laureate Robert Shiller's evaluation, Mish explains why although stocks are overvalued considering historical measures, "it’s nothing compared to skyrocketing home values." "Robert Shiller calls it a bubble, and so do I," Mish concludes.
Basically, everywhere one can look inside the housing markets ravaging signs indicate the coming of a catastrophic burst. It's literally just a matter of time.
It's Friday after Election Day... and we STILL do not know who is President Elect!!!
I'm wondering if SCOTUS will end up deciding this election like they did with Bush v. Gore?
7.0 magnitude earthquake in the Aegean Sea causes tsunami on Greek island of Samos. October 30th 2020By admin
A powerful earthquake has struck off Turkey's Aegean coast, north of the Greek island of Samos, officials said. The tremor of up to 7.0 magnitude struck off the coast of Turkey's Izmir province, the US Geological Survey (USGS) said, and was felt as far away as Athens and Istanbul.
In Samos, the island closer to the epicentre of the earthquake, a church and some buildings have collapsed, the sea has risen and the roads are flooded
Sea pulled back, that's a sign before tsunami/flooding
Building collapse 10 minutes after the eq
Samos cathedral partially collapsed
ANCHORAGE, Alaska -- A powerful earthquake off Alaska’s southern coast shook sparsely populated coastal communities late Tuesday and prompted some residents to briefly flee to higher ground because of tsunami fears.
There were no immediate reports of damage in the Alaska Peninsula and the tsunami warning was canceled after the magnitude 7.8 quake offshore created a wave of a less than a foot (30 centimeters).
The earthquake struck Tuesday at 10:12 p.m. local time and was centered in waters 65 miles (105 kilometers) south-southeast of the tiny community of Perryville, at a depth of 17 miles (28 km), according to the U.S. Geological Survey.
At least two people have died after a powerful earthquake shook central and southern Mexico, swaying buildings and sending thousands of people into the streets on Tuesday.
The 7.4 magnitude earthquake struck at 10:29 a.m. local time (5:29 pm CEST) on Tuesday, according to the US Geological Survey (USGS).
The USGS estimated that two million people felt strong or moderate shaking and another 49 million felt weak or light shaking.
Seismic alarms sounded in the morning, giving enough warning for residents to exit buildings.
Read more: https://www.euronews.com/2020/06/23/powerful-7-4-magnitude-earthquake-hits-mexico