Latest Housing News

Foreclosures were up 81% in 2008 compared to 2007. There were over 3 Million foreclosures filed and over 861,000 people actually lost their homes. This number probably would have topped 1 million were it not for various foreclosure moratoria passed by several states. All they do is prolong the agony for most. Although some experts are calling for a bottom in 2010, at about a 33% drop in housing prices, there is no rational reason to believe this estimate. I think they say that because 2010 is a year away and probably no one will remember they said that at that time. To the contrary, the only bright spot in real estate has been the low interest rates and that bright spot will be extinquished by the end of this year with the bursting of the Treasury Bond Bubble.

The drying up of funds for real estate lending combined with new lending regulations that eliminate half of the people who could borrow before, in addition to the layoffs and the growing number of people "sending the keys to the bank" because they are under water, will combine to drive housing prices lower than anyone dared project, I believe.

Thinking of buying real estate? Put the money you were planning to use for the purchase (30% down required!), into silver. The overall economy is in a deflation now, with the prices of everything going down, including gold and silver. However, when the economy turns, inflation will be back with a vengeance. This situation is analagous to 1971 when the average home sold for $20,000. Let's see what would happen if Mary bought a home for $20,000 and John put $20,000 in silver. The economy was bad for several years in the 70'S but when the economy turned, prices shot up. Mary's home jumped to $40,000 in 1980, but John's $20,000 investment in silver was worth over $770,000 in 1980!

The stage is set for a repeat performance. When the economy turns, real estate appreciation will be hampered by the huge inventory of unsold homes, restrictive lending standards that will eliminate half of the usual buyers, and sky high interest rates. Silver will have no such retardants holding it back. As it is, silver is more scarce now than in 1980, since 95% of all silver mined is consumed by industrial uses. Also, Warren Buffet has recently bought 20% of All the silver in the World! Think he knows something that we don't?