Tucson – How The Housing Bubble Burst

3 Responses to Tucson – How The Housing Bubble Burst

1. iflyjetzzz says:

   July 7, 2011 at 10:11 pm

   Dave,
   I don’t know how the source document counted ‘foreclosures’ but those numbers are way off. 2010 was the highest number of foreclosures in history and they were just a tad north of 1 million foreclosures.
   Part of the problem lies in the fact that many sources play fast and loose with the definition of foreclosure. In many cases, a simple filing counts as a ‘foreclosure’. The problem with that metric is that there are usually multiple filings on the same property which is entering foreclosure.
   If we stick with the most narrow (and IMHO, correct) definition of foreclosure, the physical act of changing ownership of the house and evicting the previous homeowners, the numbers for 2009 were 918,000 foreclosures. Link: http://www.wsws.org/articles/2010/jan2010/home-j16.shtml
   For 2010, the number of foreclosures was a record at just a tad over 1 million homes. Link: http://www.fbmrealestate.com/foreclosure-expert/2010-foreclosures-reach-1-million-mark

   After looking through the graphic, I’m not sure what point it’s trying to make. Is it trying to indicate that the worst is over? I hate to break it to people, but I’m forecasting even higher annual foreclosure numbers for several more years. It is going to take most of the rest of this decade to work through the housing glut.
   And the housing glut is further complicated by several factors including demographics which will result in a decline in housing demand.

   The bottom line is that we are nowhere near the bottom on the housing market both nationally and in Tucson.
2. Alex C. says:

   July 9, 2011 at 2:00 pm

   Interesting. Not sure what direction Obama is leading us in now (sometimes it seems like somebody fell asleep at the wheel). And now states are enacting tougher foreclosure laws which may lessen the bleeding but it is not a permanent solution. I know here in Hawaii, a new law was passed, Act 48, which makes it more difficult/time-intensive to go through foreclosure proceedings. It may temporary relieve downward pressure from REO’s, but that doesn’t mean that foreclosures will go away (just take longer to get to market).
3. iflyjetzzz says:

   July 11, 2011 at 10:43 am

   Alex, I’m sure that my point of view will be unpopular but the best solution is to stop intervention in the free market system.
   Herber Hoover, in his biography, claimed that Andrew Mellon (sec of Treasury) gave him the following advice: “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”
   That’s exactly what’s needed. Sure, it’ll bring a great deal of short term pain. But what we’re doing now (Keynesianism) is resulting in dragging out recessions/depressions for a decade or more. The Great Depression could have ended in less than 5 years but for Keynesian stimulus. Look at Japan; three decades and counting of near continual recessions and depressions.
   Until we’re ready to take our pain here in the US, it’s unlikely that our economic malaise will end much before 2030.

   Do some research with respect to economic history. You won’t find multidecade recessions/depressions anywhere in the world prior to Keynesian theory.