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27 Amazing Statistics About The Real Estate Crash That Never Seems To End: More Foreclosures, More Underwater Mortgages And More Home Price Declines

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The real estate crash that never seems to end appears to be getting even worse.  Home prices continue to go down, the number of underwater mortgages is soaring and the number of foreclosures set an all-time record in 2010.  The peak of the housing market was in 2005 and the subprime mortgage crisis erupted in 2008.  Shouldn’t things be getting better by now?  How many years is this real estate crash going to go on for?  Home builders and those that work in the construction industry are deeply suffering because new home sales continue to hover around record lows.  Mortgage professionals are having a really hard time because very few people are seeking home loans and many of those that are seeking loans cannot get approved.  Real estate agents all over the country are pulling their hair out in frustration and large numbers of them have left the industry completely.  The United States has never had such a prolonged real estate slump in the post-World War 2 era.  Unfortunately, there are a whole lot of indications that the real estate crash is going to get even worse.

The rapidly rising price of oil, the horrific crisis in Japan and instability in the Middle East all threaten to plunge the world into another major economic downturn.  That is really bad news for the real estate industry.  Already there are not nearly enough jobs for everyone in the United States and without good jobs American workers simply cannot buy homes.

In addition, many of those that would like to buy homes are finding that they cannot get approved for home loans.  Before the real estate crash, lending standards were incredibly loose, but now the pendulum has swung very far in the other direction.

Applying for a home loan today is roughly the financial equivalent of a proctology exam.  Once upon a time banks and financial institutions were handing out mortgages to anyone who could sign their name on a piece of paper, but now mortgage lenders are being extremely, extremely tight with their money.  This is making it very hard for the U.S. real estate market to recover.

In many ways, the U.S. real estate industry is starting to somewhat resemble a movie that Bill Murray once did entitled “Groundhog Day”.  In that movie the character that Bill Murray played had to live the same day over and over.

Well, for the U.S. real estate industry every single month is a complete and total nightmare.  But instead of being exactly like the previous month, each new month seems to bring news that is just a little bit worse than the month before.

Will this nightmare ever stop?

The following are 27 amazing statistics about the real estate crash that never seems to end….

#1 In February, U.S. housing starts experienced their largest decline in 27 years.

#2 The number of new building permits fell to a new all-time record low in February.  In fact, new building permits were 20 percent lower during February 2011 than they were in February 2010.

#3 As of the end of 2010, 23.1 percent of all U.S. homeowners with a mortgage owed more on their homes than their homes were worth.

#4 According to the Mortgage Bankers Association, at least 8 million Americans are at least one month behind on their mortgage payments.

#5 It is estimated that there are about 5 million homeowners in the United States that are at least two months behind on their mortgages.

#6 According to the U.S. Census Bureau, 18 percent of all the homes in the state of Florida are sitting vacant.  That number is 63 percent larger than it was just ten years ago.

#7 Celia Chen of Moody’s Analytics is projecting that home prices in Florida are going to fall another 11 percent.

#8 In the state of Arizona, approximately 16 percent of all homes are now sitting vacant.

#9 In total, approximately 11 percent of all homes in the United States are currently standing empty.

#10 In Dayton, Ohio today 18.9 percent of all homes are now standing empty.  21.5 percent of all homes in New Orleans, Louisiana are currently standing vacant.

#11 According to CoreLogic, home prices in the United States declined by 5.7 percent between January 2010 and January 2011.

#12 New home sales in the United States in January were a shocking 11.2% lower than they were in December.  The new home sales number for January 2011 was 18.6% lower than the number for January 2010.

#13 Now home sales in the United States are now down 80% from the peak in July 2005.

#14 An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010.

#15 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#16 72 percent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009.

#17 In 1996, 89 percent of Americans believed that it was better to own a home than to rent one.  Today that number has fallen to 63 percent.

#18 In 2010 sales of previously existing homes in the United States were at their lowest level in 13 years.

#19 26 percent of all the homes sold in the United States last year were foreclosures or short sales.

#20 According to DataQuick, distressed property sales accounted for nearly 60 percent of previously owned home sales in California last month.

#21 The median sale price of a home in California has declined on a year-over-year basis for five months in a row.

#22 Since the real estate peak, U.S. home values have fallen by a staggering 6.3 trillion dollars.

#23 Deutsche Bank is projecting that 48 percent of all U.S. mortgages could have negative equity by the end of 2011.

#24 Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months.  Today, the average U.S. homeowner that is being foreclosed upon has not made a mortgage payment in 17 months.

#25 Right now there are now approximately 15,000 vacant buildings in the city of Chicago.

#26 According to Zillow, U.S. home prices have already fallen further during this economic downturn (26 percent) than they did during the Great Depression (25.9 percent).

#27 In September 2008, 33 percent of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure.  Today that number has risen to 48 percent.

  • From Bryan Rich at Money and Markets:

    The most extensive study on historical debt crises suggests that the decade-long build-up in credit will take at least a similar amount of time to unwind.

    If December 2007 marked the beginning of the US recession, we’re just a third of the way through this deleveraging cycle!

    http://www.planorperish.com/?p=3972

  • Nexus

    This could go on for a decade and longer as it is hard to see where the US economy will create value – certainly not through the model of debt finance that has just collapsed.

  • pogue

    when I got my loan it was incredible how painful they made it. My foreign-born wife has no US credit history, so they scrutinized us closely. Even though we’re both well employed, they didn’t like our low savings. I had to write a 2 page letter explaining our unique situation of material success with her limited credit history and my low cash savings and collection of precious metals. I told them we were successful and stable, even though I avoid credit like the plague and she has never taken on any debt in the USA, creating the impression that I’m poor credit risk and she’s a woman without a past. It was insane. The really nasty part to me is that, even though I signed a contract with a bank, they could up and sell my contract to someone else, possibly in China, with no notice and no say on my part. What kind of contract is that?

    The interesting part about the housing crisis is how hit-or-miss it is. If you live in a military town or a center of government, you wouldn’t know there was a crisis. The DC area has seen no slowdown. Base towns, like Fort Bragg or Fort Hood, continue to develop and expand. If you buy a home in one of those places, the value will not drop because the USG is pouring money into those places constantly. They’ll be the last employer to pay a paycheck in this country.

  • A Dodgy Bloke

    I’ve been watching this closely here where I live you could see the housing implosion starting back in 2005. The problem is the banks gave a loan to anybody who could fog a mirror. You had people who had no business being homeowners or should have waited until they had the income. Then you had the flippers, the speculators, people who bought houses they knew they couldn’t afford long term but knew they could sell it at a large profit after ward. You had mortgage companies giving loans to anybody selling the loans to the big investment houses who bundled them in to MBS, Moodys S&P would slap a AAA rating on them and the investment houses sold them to the unsuspecting. There where no victim’s only volunteers somebody got a house, the banks made money, the rating agencies got contracts and some poor sap got a bag full of dog poop they thought where AAA rated securities. The sad thing is everybody thought it would go on forever.

    About the tightened leading standards anybody remember the times when you had to have a work history, a good paying job, and 20% down before you could even get in the door?

    I’m convinced entire subdivisions will have to be torn down demand will never be what it was.

  • Find out more about the end times @: http://www.raptureintheairnow.com/

  • shane

    Since the formation of HUD and government backing of the commercial home loan market, prices have soared to levels that are not commensurate with real world wages. The banks had no moral or financial hazard because they knew that they were covered by the US taxpayer.

    I think that linking the mortgages into other fiscal vehicles is what really compounded the problem, making the bailout an inevitable consequence to the obviously malevolent set of events.

  • All I can say is “wow.” Of course the government is going after their fees and fines, which is what they do best. Contracts and obligations are quickly becoming archaic in our brave new world. Wish I believed this was for the better future, but I don’t.

    We help Americans find jobs and prosperity in Asia. For details, visit http://www.pathtoasia.com/jobs/

  • pogue

    You know, my wife brought up a similar point. She asked me if a college education would be so expensive if the government wasn’t pushing every mouthbreather in with a free loan. I figure she has a good point. If the cost of something is too high, and no one like Uncle Scram is giving it away on public funds, the cost must eventually go down or be so high no one partakes. Then again, I’m not too bright…

  • mrsbart

    Many articles on the “housing crisis” like this one still regard the stats of the boom years as the norm we should be aiming for, and against which to set our expectations of recovery. This is totally the wrong approach since “the bubble” was created and maintained by illegal and criminal lending practices that never should have been allowed in the first place had there been proper regulation and oversight (but there was not becuase too many powerful bankers were making huge sums of money). We all need to re-set our expectations of the housing market to something more realistic based on long-term data, then base our judgments of number of real estate agents, construction jobs, etc on that.

  • Jackgoldman

    Simple reality. Gasoline was three silver dimes for one gallon in 1963. Gasoline is now TWO gallons for three silver dimes in 2011. We don’t have a real estate problem. We have a money problem that leads to a massive misallocation of resources that continues as we speak. It’s a money bubble, not a real estate or stock bubble. Bankers and government benefit. The public loses.

    In real 1963 silver money the US stock market just dropped 80% in the last ten years. It’s not noticeable in fake bank debt notes from the secret private foreign owned US Federal Reserve. We have a money problem with symptoms showing up in real estate, stocks, jobs, education, and we need to solve the problem.

  • Richard Nixon

    Housing is like a game of musical chairs..but just the opposite. You don’t want to be hanging on to a box of cardboard if and when the music stops!

  • Housing is driven by demographics, and the demographics are lined up against a recovery. On the whole, the boomers have bought as much housing as they are ever going to buy, and the following generations are not big enough to match the housing demand of their parents/grandparents. Trying to make up the demand slack with immigration won’t work either… on average it takes a few generations for immigrant income to rise to the national average. Too little too late. Housing rose with the boomers and will decline with the boomers. Get used to it.

  • Virginia

    When jobs are scarcer than hen’s teeth, you cannot blame banks for taking a closer look at one’s ability to pay a mortgage. People do get hired here and there but the question most banks are asking is “for how long will that job last?” No doubt in years to come, the foreclosed homes will probably turn into homeless shelters for the masses. The will be purchased by housing authorities for next to nothing and turned into section 8 housing/homeless IMHO.

  • Sola

    The blame game & speculation of the parties roles in this crisis seem misguided to me. I knew a banker whom lost his job at the onset of this bubble. He felt guilty and his wife worked for Countrywide pushing loan apps she knew did not qualify. To me this seems simple… compare it to walking on a used car lot whoms responsabilty is it to be informed to guard against being scammed? The consumer! You can say the HUD backed loans started this market, the banks whom tailored loans to these GSE loans & then did what any corporate enitiy would do spread their risk & sold them. I do not think there was some vast conspiricy that knew these loans would collapse. They all thought the train would jist continue with a few hills here & there. The bankers that approved these loans are in their corner of the world and do what they need to do to compete. I am a strip dancer… no high school education & I knew instinctively that “no money down” and $500.00 moves you in was just stupid from a consumer standpoint. I could have qualified for these loans… I just knew naturally that they were too good to be true and that an artifical demand was being created and driving Real Estate values up superfically… common sense. At the end of the day I blame the Smiths reaching to keep up with the Jones. There is now collatoral damage to conventional mortgage holders values. No one ever promised when you were born that if you bought real estate it would appreciate… that is the gamble. To the conventional loan homeowners pay attention to whom you vote for locally and nationally. Be active in your community to promote values and morals that overt these emotionally driven socital upheavels. We reap what we sow. Move forward stop whinning.

  • Marc

    Wiil it ever end? Great question. In my opinion as long as there is government intevention, bailouts, QE, and political hands shking those of private corporations this will not end. It will be dragged out to the last dollar has been borrowed, printed and spent. As horrifying as it may seem we need the failure, but we need it before the next ten generations are sold to our governement and our freedoms are peeled away one by one. We have lost much more than houses and money in this crisis.