Secular Trend in Real Estate Is Down

In my commentary QE1 and QE2 are not helping real estate I suggested that QE wasn't doing much to help real estate. The headline and commentary below continues to support this assertion.

• Access to credit (credit creation) has been contracting within residential and commercial real estate since the onset of the debt crisis (2009-2010).
• Constant currency real estate prices (real prices) have been declining sharply since 2005 within the secular down trend that begin in 2001.
• Inventory overhang, both recognized and unrecognized - shadow inventories owned by banks, will retard the housing market until the major cycle low in 2030's. (see chart below).

Months Supply of New One-Family Houses for Sale And Change YOY:


Headline: Nearly 20% of Florida homes are vacant

It's not always easy to feel sorry for sunny Florida. But they just got hit with another blow.

On Thursday, the Census Bureau revealed that 18% -- or 1.6 million -- of the Sunshine State's homes are sitting vacant. That's a rise of more than 63% over the past 10 years.

Having this amount of oversupply on the market will keep home prices depressed and slow any recovery.

During the housing boom, Florida was among the hottest real estate markets in the nation. Homes were snapped up by the state's growing population as well as hordes of investors confident that prices would continue to soar.

Source: htmoney.cnn.com

From Bob