The 13 Housing Markets That Will Never Recover

[banca rotta]

The people and politicians made their choice and decided that hyperinflation will occur. That is how they will get these home prices back to "normal".[/[/B]QUOTE]

But can the politicians manage to allow hyperinflation with out interest rates going up??

Of course! Thats what will cause hyperinflation. Interest rates are too low. Because of this no one will invest in the dollar or govt debt for the long run. It's too risky for such a small return.

The only tool the fed has to protect the integrity of the dollar is to raise interest rates so they make govt debt attractive to investors.

If they raise interest rates the economy and housing market will free fall and the govt couldn't afford the interest payments on the debt so the govt will default.

If they keep interest too low for too long no one will buy dollars or dollar denominated assets causing a currency crisis which will lead to hyperinflation.

There is no fixing this mess in anyway shape or form.

Right now there's a load of suckers dumping their euros to buy dollars, but that will change once they wake up to the reality that the dollar is no better.

[Chucksoutalu]

Yeah It Sux! Soooooooooooooo when the sky falls will all of us be ready to pick up the pieces and rebuild? The new Amreican Dream may turn out to be not owning a damned thing

[angles]

We will all go to zero at that point. But the government seems to pull something out just when you think it all will come crashing down.

[MarkM]

Unemployment at one point in time is not necessarily the best indicator whether or not a city and its real estate markets will ever recover. Long term, markets in Florida and Las Vegas will recover -- they have been through these booms and busts before. Vegas is very much a single industry economy (entertainment) which depends largely on discretionary dollars -- so, during recessions, Vegas takes a hit. Historically, though, Vegas comes back strong when the economy rebounds. Nevada also has certain advantages (like no income tax) and is business friendly -- far more so than neighboring California, so long term, I'm not worried about Vegas's economy. (I do worry about water long term in Vegas -- but I fully expect the current housing stock to be purchased and used long term once a solid recovery begins.)

Detroit and certain other cities (Gary, IN for example) feel like a war zone and have had long term high unemployment. Long term high unemployment + high crime rates seem to be a far more fatal combination. As a result, Detroit has been bleeding population for years with no real likelihood of recovery.