The Coming U.S. Real Estate Crash
By Michael Snyder
This week headlines across the United States screamed that new home sales in the U.S. had declined to the lowest level since the U.S. government began keeping track in 1963. But in the news stories covering this data in the mainstream media, they were always very careful to give their readers lots of reasons why things are going to “get back to normal” very soon. But the truth is that is simply not going to happen. Right now the United States is heading for another real estate crash. The only thing that has been holding it back was the huge bribe (called a tax credit) that the U.S. government was giving people to buy houses. Now that the tax credit has expired, there is no artificial incentive to buy homes and the real estate market has fallen through the floor. Unfortunately, there is every indication that things are going to get even worse. Read on to find out why….
The following are 7 reasons why the U.S. real estate market is already a total nightmare….
#1) In May, sales of new homes in the United States dropped to the lowest level ever recorded. To be more precise, new home sales dropped 32.7 percent to a seasonally adjusted annual rate of 300,000. A “normal” level is about 800,000 a month. New homes have never sold this slowly ever since the U.S. Commerce Department began tracking this data back in 1963.
#2) The median price of all new U.S. homes sold in May was $200,900, which represented a 9.6% drop from May 2009. If prices are still falling on new homes that means that the real estate nightmare is not over.
#3) New home sale figures for the previous two months were also revised down sharply by the government. Apparently their previous estimates were far too optimistic. But those were supposed to be really good months for home sales with so many Americans taking advantage of the tax credit right before the deadline. So the fact that the data for the previous two months had to be revised downward so severely is a very bad sign.