Dr. Housing Bubble 07/10/08

[Crewleader]

California Housing: 1 out of every 192 Homes in Trouble. Top Ranking State in the United States.

The foreclosures numbers for the month of June did not give us any hint of a second half recovery. The lunacy of some of the politicians out there is simply baffling. Apparently the current recession is now all in our heads:

“(CNN) Obama was responding to comments from Phil Gramm, a former Texas senator and a co-chair of McCain’s presidential campaign who told the Washington Times that America has “become a nation of whiners” and the country is in the midst of a “mental recession.”

We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline,” he said. “You’ve heard of mental depression; this is a mental recession.”

http://www.doctorhousingbubble.com/california-housing-1-out-of-every-192-homes-in-trouble-top-ranking-state-in-the-united-states/

[SheilaT]

1. While I certainly agree that

we are NOT being a nation of whiners, that we really are in a recession, it would be easy to think that every fourth house must be in foreclosure, the way it's being reported. But even in the worst state, only 1 in 192, which is one half of one percent, is in trouble. Which does mean that the vast majority of homes are not in trouble, and are not in default, fortunately.

[spooky3]

2. if foreclosures were the only sign of economic trouble, I might completely agree with you.

I agree with your main point that the vast majority of homes are not in trouble and that some people may overestimate how many are in foreclosure. But there are many other indications of problems in the housing market; foreclosures are simply one extreme symptom.

And of course, there is evidence of serious problems manifested in lending institution instability, in the trade deficit, in the budget deficit, etc.

[Yavin4]

3. Foreclosure Is The FInal Stage

For every foreclosure, there's a larger number teetering on the brink. For every house teetering on the brink, there's an even larger number where valuations have fallen dramatically. Where valuations have fallen dramatically, no one can take out equity loans against their homes, which means less consumer spending. Which then means, less job creation.