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Should You Buy A Home In 2011? Check Out These 29 Absolutely Crazy Statistics About The Housing Crisis

Has the U.S. housing market reached a “bottom” yet?  Are home prices going to start recovering?  Is the housing crisis going to end at some point?  Today there are millions of American families that would like to buy homes but they are not sure what to do.  After all, nobody wants to end up like all the suckers that bought at the top of the market and now owe far more on their mortgages than their homes are worth.  A lot of people are really afraid to take out home loans right now.  So should you buy a home in 2011?  That is a very good question.  The reality is that there are a lot of reasons why home prices could continue to fall.  Unemployment is still rampant, and American families simply cannot afford to buy homes without good jobs.  Also, lending institutions have really, really tightened lending standards.  That is really restricting the number of buyers in the marketplace.  The number of foreclosures set another record high last year so there are a ton of homes that need to be sold and not a lot of demand for them.  So with all of these factors working against the real estate market, are there any reasons why anyone would actually want to buy a home in 2011?

Well, yes there are.  The truth is that all of the reckless money printing that the Federal Reserve has been doing and all of the insane borrowing that the U.S. government has been doing have flooded our financial system with new dollars.  At some point all of these new dollars are going to cause a tremendous amount of inflation.

Right now we are seeing the price of gas go up and the price of food go up, but eventually the price of everything (including housing) will go up.

When the U.S. economy totally collapses, you are going to want to have your housing expenses locked in.  In a highly inflationary environment you may find that your wages do not keep up with inflation and at some point you may be unable to afford to buy any kind of a decent house at all.  If you are renting, you may have to deal with rent increase after rent increase.

The best way to avoid housing inflation when it comes will be to own your own home and have a mortgage with a fixed interest rate.  But the timing is key.  You don’t want to buy that home too early and you don’t want to buy that home too late.

So when will the exact “right” time be?

That is very hard to say.

However, to give us all some numbers to think about, the following are 29 absolutely crazy statistics about the housing crisis that show just how nightmarish the U.S. housing market is right now….

#1 During the first three months of this year, less new homes were sold in the U.S. than in any three month period ever recorded.

#2 Home prices just keep falling month after month.  The Standard & Poor’s/Case-Shiller 20-city index has fallen for seven months in a row.

#3 U.S. home prices have now declined 32% from the peak of the housing bubble.

#4 In Phoenix, Arizona home prices are now down 56% from the peak of the housing bubble.

#5 Home prices in Las Vegas, Nevada are now down 58% from the peak of the housing bubble.

#6 Nearly 70 percent of all Las Vegas mortgages are now underwater.

#7 Due to the housing crisis, there are now more than 167,000 vacant homes in the state of Nevada.

#8 It is estimated that 25% of all mortgages in Miami-Dade County are “in serious distress and headed for either foreclosure or short sale“.

#9 According to a recent census report, 13% of all homes in the United States are sitting empty.

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

#11 In the city of Detroit alone, there are more than 33,000 abandoned homes.

#12 The average home in the city of Merced, California has declined in value by 63 percent over the past four years.

#13 U.S. home values have fallen an astounding 6.3 trillion dollars since the housing crisis first began.

#14 California had more foreclosure filings that any other U.S. state during 2010.  The 546,669 total foreclosure filings during the year means that over 4 percent of all the housing units in the state of California received a foreclosure filing at some point during 2010.

#15 Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.

#16 Approximately 26 percent of all renters in the United States spend more than half their pre-tax income on rent.

#17 It is estimated that 49 percent of all American renters are paying out more in rent than they can afford.

#18 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.

#19 72 percent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009.

#20 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.

#21 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.

#22 During the month of January, it was estimated that there were 1.8 million distressed homes in the United States that had yet to be listed for sale.  Many analysts believe that this “shadow inventory” will extend the housing crisis for several more years.

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

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

#25 Bank repossessions and short sales now make up approximately 30 percent of all home sales in the United States.

#26 As of the end of 2010, new home sales in the United States had declined for five straight years, and they are expected to be lower once again in 2011.

#27 31 percent of the homeowners that responded to a recent Rasmussen Reports survey indicated that they are “underwater” on their mortgages.

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

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

  • Tatiana Covington

    Oh, the hell with ownership, just rent. Cheaper, quicker, easier, simpler just to pay rent monthly, and immunize oneself against depreciation, mortgages, property taxes, homeowner’s comprehensive insurance, and eminent domain.

    Ownership of much of *anything* is a bad idea! Then there’s all that stuff on your head and your hands! Much easier just to let others take all the hassle of ownership, and just pay a fee: very much like my refusal to own a car. I just pay fares instead, and save 90% with 0% loss of mobility. I save so much, that travel is actually cheaper, because all that saved money earns enough interest to fund my travel, and more!

    • Roy Watts

      Tatiana, there are numerous benefits of owning a home and I believe it’s much cheaper to own than to rent because at least I can write off my expenses where with rent I can not write off a single thing.

      The same goes for leasing a vehicle – the ONLY time it makes sense to lease a vehicle is when you are incorporated and can write off that expense. Leasing is NEVER CHEAPER and if you believe that – you just don’t understand the economics of the situation.

    • Reba

      I agree. Pay my mortgage for me (I’m a landlord) and save nothing yourself! Great plan. @@

  • This spring would be a good time to buy a farm home with land and water rights.

  • VegasBob

    Actually, holding property during severe inflation is a mixed bag. The only ‘good’ point is that you have a fixed payment if you have a fixed rate mortgage.

    But local government will use inflation as an excuse to drastically raise your property taxes, and unless you are getting raises to pay the taxes, you will wind up getting screwed.

    Further, during high inflation, interest rates tend to rise dramatically, and that keeps a lid on house prices and also makes houses more difficult to sell.

    People ought to recognize that housing is not an ‘investment’ – it is just like a consumer durable, but with a much longer life. If you don’t pay for maintenance and repairs, the value of your house falls. And if you don’t pay the property taxes, the government takes your house away.

  • Terry

    when did a home become a “wealth building tool”? It is a place to sleep in relative safety and a place to come in out of the elements. My mortgage payment is less than what I would pay to rent in the same neighborhood, so I disagree with Tatiana (my wife is also a Tatiana).
    I agree that you never really own a home. Just stop paying property taxes and see. The county gets nasty real quick. Look at the increases in taxes, fees, and fines. Even at the local level the gubmint has the attitude that “we will take what we think is our share one way or the other”. Huge fines for minor infractions are known to encourage people to come to your area.
    Too bad we will not get the chance to vote on the bailouts like in Iceland. All the foriegners who deposited money in banks in Iceland were foolish enough to give their money to banks in a different country.

  • Foreclosure rates are soaring, and as those owners are kicked out of their homes for not paying, the structures are sitting empty, with no one waiting in line to buy at any price.

    Trillions spent, and trillions to be spent, and so trillions and trillions are to be repaid.
    Will the country’s debt become to it, what the toxic assets were to the banks? Are we jumping in a hole to save those who have fallen in the hole?

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  • Guido

    I can assure you, not all home prices are in the tank. If you live near DC or a military base town, your house is assured to remain valuable. DC housing is booming. Base towns where BRAC didn’t destroy the troop levels continue to have robust economies. I think the rest of the nation could collapse, but these economies are flush with federal money and won’t feel it.

    Renting is fine, but I was always told, “buy land, they’re not making it anymore!” Property is still a great thing to own, even if homes were massively overvalued. As I often say-it was government that was the problem. Their meddling screwed it all up.

  • Adverse Possession

  • A Dodgy Bloke

    Renting or owning is a mixed bag each has advantages and disadvantages. Renting in a high inflationary time will eventually kill you financially with sky rocketing rents. Owning during the same period you’ll face galloping property taxes, no matter where you are. Timing and being smart will save you find a screaming seal and homestead it, and stay away from HOA’s.

  • El Pollo de Oro

    I have a good friend who owns two small, modest rowhouses in a very blue-collar section of Queens; collectively, the two houses are worth over a million dollars. But on the other hand, I know folks out west who bought houses in Las Vegas, Phoenix and Tucson and have mortgages that are seriously underwater. Those people are screwed whatever they do—screwed if they go into foreclosure, screwed if they keep paying. So, some property owners are sitting pretty while many others are in very bad shape. And that is to be expected because The Banana Republic of America (formerly the USA) is now a Third World country. A minority of people in Third World banana republics do extremely well, but the majority struggle to survive. And the real estate market will reflect that.

  • This statistic is amazing: “#28 Deutsche Bank is projecting that 48 percent of all U.S. mortgages could have negative equity by the end of 2011.”

    That’s a lot of potential for massive foreclosures. Even if they could find a buyer for their home, they would have to bring money to the table to sell it, which is not really likely.

    Free Food 2 Go

  • f. ziffell

    As a native Floridian, I can tell you that half the houses built during the boom were fueled by investors looking to flip them quickly. Consequently, these “investors” were some of the first to default on their loans-on purpose.

    The community I live in boomed in population in 9 years 52%. Yet, many life long residents fully aware of the growth, looked at each other and questioned where the hell were all the people that were going to live in these massive developments they were building. The building in progress flooded the market with more homes than home buyers. This is one reason Florida leads the nation (or nearly so) in foreclosures.

    As an example of the insane skyrocketing that took place at that time, in less than a year a new home we purchased in 2006 soared 66% in less than a year. 66%!!! Sure wish I would have sold it then…

  • I agree Guido. I have a friend who works for the EPA in Washington and he just emailed me to let me know that the housing situation in his region is relatively stable, but that he DID have to refinance (and jump through a bunch of hoops in the process).

    This is a clear example of the growth of government. In the future – as American sinks deeper and deeper into a state of neo-feudal socialism – the only ones who will really be financially secure are those who work for (or align themselves) with the (federal) government (aka : the 21st century “feudal lord”).

  • Victoria

    WHY would ANYONE want to buy the stick built houses that are out there? Get a few acres and build a REAL house. Slip-form stone or earthbag. Why support another person{the builder} and the bankers{mortgage} taking MORE of your money?

  • Beavis

    I’m right there with you Mr. Ziffell.

    Our house doubled in price right around 2006 and I was BEGGING my wife to sell. I wasn’t able to talk her into it. Now its worth a little less than we payed, but its nearly payed off, so we aren’t underwater.

    Missed opportunity. Sometimes I still wonder what it would be like to have that half mill sitting in the bank…

  • Gary

    Cram down for these loans. Screw the investors and the bank.

  • Dick Head

    Beavis- you would have a half mill in the bank that the Fed is eroding away every day, so cash isn’t safe either. Food, gold and silver!

  • Zombee K

    Housing collapse is just another disaster. Disasters happen all the time.

  • Those are interesting stats and not shocking in the least to anyone who has followed. There’s a lot of interesting housing market charts and analysis in this article from Minyanville:

  • Virginia

    Young people today should get out there and buy some land and build their own houses with no mortgage. Do it in stages and when it is done, it is yours free and clear and you have the experience of doing it and all the good (sometimes bad) memories. Nothing worthwile in life comes easy. You have to work for it.

  • Tobby

    There is another option. Do as the immigrants have done for decades. Have { 2 } or more families live under one roof, share the payment & expenses. we always have options, so dont get discouraged. Blessings.

  • Tobby

    Another point, a 5 bedroom, 3 full bath, 4000 square feet “new” home in Tulsa lists for around $350,000.00 split 3 ways = living in quality lifestyles. Need I say more?

  • With so many foreclosures and short sales as of late it’s easy to see how important it is to make an educated decision when it comes to buying a home. Sure there are several variables to consider, but ultimately only you can decide what the best move is. Just make sure that you’ve given all options a thorough examination otherwise you may find yourself in some financial trouble.

  • ZBK

    Arizonans are prepared for a second housing screw job. So bring it on!

  • carl

    I have to know,where is this photo?? Does anyone know? Pristine lake, and 4 falling down houses??

  • My opinion – This is the best time EVER to buy a home IF you are buying because you need a place to live, NOT because it’s a good investment. Buy something you can pay off within a few years before the total collapse comes. Then you will have at least one of the basic necessities covered – shelter. Food and water? Oh yeah, buy enough land with the home so that you can grow your own food and livestock. That way you won’t be at the mercy of the government.

  • Billy Dee

    Of course 48% of all homes will be in default any one terribley upside down will default. Most people I have talked to can afford their mortgage that they bought during the bubble. Most just ask why? If I short sell no obligation to repay s they walk away. As for renting vs buying you can buy a home for 30 years your payment will be half of the rent for the same house (including taxes and insurance). Just on a money saving princibal its a good idea. Not to mention 30 years from now and youre getting close to retirement age a smaller monthly nut would be a good idea. Stupid people want to rent, Rich people always buy.