Tweet
Robert Shiller (He’s a Yale economist, he knows more than you do…) already famous for the Case-Shiller housing cost index and for the prescient book “Irrational Exuberance”, has a message for the masters of the universe, (and the remaining non-masters who are hoping to get out of their unfortunate real estate positions…)
Dropping a bombshell that has to date attracted less attention than I would have expected, he forecasts more pain for real estate: “a further decline in property values of 10 percent to 25 percent in the next five years ‘wouldn’t surprise me at all.’ ”
Unsurprisingly, he believes that this catastrophic coda to an already worse than 1930′s level contraction will be accompanied by generalized havoc in the overall economy mimicing the lost decade(s) that have brought the Japanese economy to its present pitiful shadow of an earlier age.
This is probably good news for the world, because the sooner the American Empire collapses the better, except that empires in the throes of dissolution are apt to flail about in dangerous fashion.
In any case, pass the popcorn
Class war, y’all
xposted@dag
19 Comments
Yup, read that one this mornin’, also saw a poll that said that over half of those polled fully expected a full blown depression shortly. Gonna get real hard for the PTB and their media whores to continue finding a positive way to spin this parade of stupid. Like they say, falling isn’t all that bad, however, that sudden stop when you hit………
There’s some phrase in French, with (I think) syndicalist roots, that translates roughly, “succeeding through things getting worse”–I guess it’s like hitting bottom for a drunk, or something.,
Anyway, it always looked to me like a dangerous “strategy”. I forget if Lenin espoused it or despised it, but from here it looks like the future is bringin’ it on, so maybe we are obliged to embrace the chaos as a prelude to the eruption of class consciousness in the American people (ed comment: yeah, right…as if…)
Our next-door neighbors left their home one step ahead of the sheriff, literally (we saw a copy of the court’s eviction order taped to their front door). A Realtor has listed the home for less than 50 percent of the average selling price of homes in this neighborhood just a few years ago. This is happening in a neighborhood that has below-average unemployment and prides itself on subdivision esprit d’corps.
It is positively dizzying.
Looking at further erosion from here, to the extent Shiller references (and I do believe he knows more than I do) is mind-boggleing and reasonable simultaneously.
Dekalb County Georgia just slashed tax-assessed values for homes in at-risk neighborhoods (i.e., high rate of foreclosures). At the same time, however, they raised the millage rate 4 points. In what I consider a rational moment, the revenue-strapped county managed to raise taxes on upper-income neighborhoods (by not lowering the value of their homes and subjecting them to the millage rate increase) while not raising taxes for homeowners who were likely to be at-risk (by devaluing their homes to the point that even with the millage rate increase, their property taxes remain the same or decrease). The county gets much needed funds, and people struggling to stay in their homes don’t see their taxes go up, which would probably force them out more quickly.
Is dekalb synonymous with Atlanta?
Yep. Metro Atlanta comprises 5 counties, Dekalb being one of them and probably the most diverse in every sense of the word.
We are seeing odd little islands of sanity pop up-eg connecicut (maybe to balance Cali which has stalled and is crashing)
Here in CFL (Central Florida) housing prices have not dropped all that much. The house are just rental units now. Even two complexes that were supposed to be town houses for sale and now town houses for rent.
That’s certainly the logical way to extract whatever value one can from the empty housing stock–it doesn’t seem to extend universally to single family houses, let alone anything like Dean Baker’s right to rent in lieu of foreclosure plan.
Nope…it just gets the mortgage payed is all.
That’s value…An empty house just burns up tax delinquency money
What I mean is that but for the internal incentive maldistributions (as between investors and mortgage servicers) the actiual investors and the borrowers could be made more closely whole if the government mandated a right to rent which would trump the foreclosure process, save mammoth legal and frivolous servicer fees, and keep people in their homes. its passivity here is criminal
Rex; a video mental health break; knowing how you love this stuff. ;o)
http://www.youtube.com/watch?v=KewfYKJy8YU
night,
stardust
I believe I’m feeling better already..
In the small town in New Mexico in which I live and own my house the prices have increased in the last year. A few years A go houses comparable to mine were selling for 50k Now its jumped up to 80k. But we are really off the beaten track in respect to the mainstream housing market.
My brother is looking to buy property or a house in Oregon, so I have been searching online for him. The prices are just screwy. Houses next door to each other looking identical can be tens of thousands different in asking prices.
What ever happened to “Location, location, location?”
I wonder if there may have been aggressive exiting foreclosed owner value maximization in some of the houses.(Take the copper, leave the cannoli….)
Maybe folks can turn their homes into charter schools, as education is the next big bubble?
Free markets, choices, choices!! Ain’t it grand?
An excellent plan–I understand that laid off public school teachers are plentiful and cheap. (And they have been so chastened that you can anticipate widespread servile attitudes.)