Robert Shiller of the famed Case-Shiller Index came out only a few days ago stating that housing may not recover for over a decade. As dire as this may sound, we have a similar example to look at in Japan. It wasn’t like he stated this just to cause a stir but talked about compressed household wages, record low mortgage rates, and a large pipeline of distressed inventory. Even though real estate values are now down 35 percent from their peak taking values back to 2002 (a lost decade) we would need to increase housing values nationwide by 50+ percent to get back to the peak. This is what he was discussing about home values not recovering to that price point. Japan has had well over two decades of a depressed real estate market and values today still do not approach the peak values reached in the early 1990s in spite of their central bank pushing rates even lower than theFederal Reserve. In fact, prices are holding closer to the trough. Examining the data we already find ourselves into one lost decade. Is another possible?Read the rest at Dr. Housing Bubble
What if housing doesn’t recover for another decade? When the young cannot afford to buy a home from their parents. The reemerging trend between the US and Japan housing bubbles.
by Dr. Housing Bubble
Something to consider before we start to celebrate the housing bottom being in (if indeed it is).
This is a symptom indicating we are in a depression instead of a normal kind of recession. The cause? Too much private debt, and the deleveraging process takes a long time to work out.
Unfortunately, the US is not making much of a dent in it where it counts, young people who usually start families and buy houses. They are expanding student debt instead.