America’s Summer Exodus: Thousands Flee The Cities Every Day Because They Don’t Feel Safe

In modern American history, we have never seen such a sudden mass exodus away from our major cities.  Overall, the U.S. economy is a complete and total disaster in 2020, but moving companies and real estate agents that work in desirable rural and suburban areas are absolutely thriving right now.  Each weekend we are seeing long lines at U-Haul rental facilities, moving companies can’t handle all of the requests that they are getting, and property values are shifting at a pace that is difficult to believe.  Homes in our core urban areas are losing value very rapidly, and at the same time we are seeing bidding wars for some rural and suburban properties that are absolutely insane.

I certainly can’t blame anyone that wants to escape the violence.  If I was living in a major city that was being torn apart by violence, I would want to move too.

At one time we had some of the most beautiful cities in the entire world, but now the word “apocalyptic” is being used to describe them.  The following comes from an article by Victor Davis Hanson

Nine months ago, New York was a thriving, though poorly governed, metropolis. It was coasting on the more or less good governance of its prior two mayors and on its ancestral role as the global nexus of finance and capital.

The city is now something out of a postmodern apocalyptic movie, reeling from the effects of a neutron bomb. Ditto in varying degrees Minneapolis, Portland, Seattle, and San Francisco — the anti-broken-windows metropolises of America. Walking in San Francisco today reminds me of visiting Old Cairo in 1973, although the latter lacked the needles and feces of the former.

Chicago is one of the cities that has been the most affected by the violence, and the Chicago Tribune recently posted an article about the mass exodus that the city is now experiencing…

Incidents of widespread looting and soaring homicide figures in Chicago have made national news during an already tumultuous year. As a result, some say residents in affluent neighborhoods downtown, and on the North Side, no longer feel safe in the city’s epicenter and are looking to move away. Aldermen say they see their constituents leaving the city, and it’s a concern echoed by some real estate agents and the head of a sizable property management firm.

Following the horrific looting in Chicago a couple weeks ago, a Tribune reporter visited some of the wealthier parts of the city, and that reporter encountered residents that indicated that they would be leaving “as soon as we can get out”

The day after looting broke out two weeks ago, a Tribune columnist strolled through Gold Coast and Streeterville. Residents of the swanky Near North Side told him they’d be moving “as soon as we can get out.” Others expressed fear of returning downtown in the future.

Of course Chicago is far from alone.  In a previous article, I discussed the fact that the New York Times has reported that hundreds of thousands of people have already left New York City.  After losing so many residents, you would think that the mass exodus would be slowing down, but that does not appear to be happening.  In fact, we are being told that “moving trucks were out in force” on the Upper West Side on Saturday…

Moving trucks were out in force on Manhattan’s Upper West Side on Saturday — leaving Guardian Angels founder Curtis Sliwa practically tripping over them.

“The mass evacuation of Upper West Siders from NYC is in full effect,” Sliwa, who lives on W. 87th Street, lamented, blaming the city’s decision this summer to house hundreds of emotionally disturbed homeless and recovering addicts in neighborhood hotels.

And someone filmed a stunningly long line at a U-Haul rental location in New York on Saturday.  In all my years, I don’t think that I have ever seen anything like that at a U-Haul facility.

Of course all of those people need to have somewhere to go, and this is creating massive bidding wars for properties in the suburbs…

Over three days in late July, a three-bedroom house in East Orange, N.J., was listed for sale for $285,000, had 97 showings, received 24 offers and went under contract for 21 percent over that price.

On Long Island, six people made offers on a $499,000 house in Valley Stream without seeing it in person after it was shown on a Facebook Live video. In the Hudson Valley, a nearly three-acre property with a pool listed for $985,000 received four all-cash bids within a day of having 14 showings.

Isn’t that crazy?

But this is what happens when vast hordes of wealthy people are trying to relocate all at once.

On the west coast we are seeing similar things happen.  Property values in rural and suburban communities are being driven up, and meanwhile prices in core urban areas are falling very quickly.  For example, just check out what is taking place in San Francisco

San Francisco has seen a greater increase in price drops than any other U.S. metro, with the share of sellers slashing prices more than doubling from a year ago as the COVID-19 related panic drives homebuyers out of the Bay Area, reports Redfin.

A quarter (24.5%) of San Francisco-area home sellers cut their list prices during the four weeks ending Aug. 16, the highest share since at least 2015, when Redfin began recording this data. That’s more than double the rate from a year earlier, marking the largest annual increase in the share of active listings with price drops among the 50 most populous U.S. metro areas.

Some Californians are choosing to relocate within the state, but of course many others are fleeing the state entirely.

One of the places many of them are heading to is Arizona, and one recent Yahoo News article commented on the “surge in California license plates” in the state…

Driving across Arizona, it’s hard not to notice a surge in California license plates. The reason for this is becoming more apparent every day. California is a failed state.

If you currently live in an urban area and you are still thinking about relocating, I would make a decision rapidly.  Summer is almost over, economic conditions are going to continue to deteriorate, and much more civil unrest is coming.

In an interview that I just did with Greg Hunter, I explained why I am so concerned about the times that we are moving into.

And countless other Americans also seem to be deeply alarmed about the near future, because we have never seen a mass exodus of this magnitude in modern American history.

The times, they are a-changin’, and life in our country will never be quite the same again.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.com.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  By purchasing the book you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

As U.S. Cities Crumble, Demand For Rural And Suburban Properties Is Soaring

Have the events of 2020 caused you to consider moving somewhere else?  If so, you are definitely not alone.  The COVID-19 pandemic, a historic economic downturn and extremely violent riots in major cities all across America are fueling a sudden surge in interest in rural and suburban properties.  This represents a major shift, because prior to 2020 we had seen a tremendous boom in real estate prices in large cities such as New York, San Francisco and Seattle.  Now a lot of those buyers have become very motivated sellers, but there just isn’t a lot of demand for tremendously overpriced homes in core urban areas that are currently being torn to pieces by rioters.

Meanwhile, prices for rural and suburban homes are being pushed up as an increasing number of Americans seek to get away from the major cities.

At first, it was the coronavirus pandemic that was the primary reason why so many people wanted to move.  According to Redfin, page views for homes in rural communities and small towns were way, way up in March as the virus began to spread aggressively in the United States…

A report from Redfin (NASDAQ: RDFN) highlights this trend, showing that by late March, the seven-day average change in page views of homes in rural and small towns was up 115% and 88%, respectively.

Of course now the worst civil unrest in decades has been added to the equation, and this has caused even more city dwellers to consider a change in residence.  In fact, one poll found that approximately 40 percent of all city dwellers “are considering leaving”…

A recent Harris Poll found that more than 3 in 10 people in America say the pandemic makes them want to live in a rural area. And, 1 in 4 now want to live in a suburb exterior to a major city. In a separate Harris Poll, it was found that nearly 40% of city dwellers are considering leaving the city due to the pandemic.

Unfortunately, not everyone will be able to move.  In an economic environment where more than 42 million Americans have already lost their jobs, many people will be doing all that they can to cling to the jobs that they still have.

But for those with the liberty to live wherever they want, this is an opportunity to make a dramatic change.

At this point, even urban real estate markets that were once red hot like San Francisco appear to be cooling off in a major way

Amid the depths of a global pandemic and financial downturn, the demand for real estate is unexpectedly rocketing in wealthy regions outside San Francisco, reports Bloomberg. Agents say that demand is soaring in affluent areas around the Bay Area such as Napa, Marin and further afield in Carmel, as people who have the means look to get away from the city. Meanwhile, the market in San Francisco and Alameda County is still well below where it was last year.

Elsewhere, Lake Tahoe has also seen a surge in real estate interest. The prospect of living out of the city on an alpine lake while maintaining a career is appealing for a new generation of young buyers, as many tech companies have signaled that remote work may be the new norm for a long time.

During the good times, our big cities had a lot to offer.

But now, many city dwellers have become completely convinced that their communities are simply no longer safe places to live.

Just look at what is happening in Chicago.  The last day in May was “the deadliest day” that the city had seen “since at least 1961″…

The city of Chicago notched a grim milestone last weekend, as 18 people were murdered on Sunday, May 31 alone, marking the deadliest day in the city since at least 1961.

The University of Chicago Crime Lab’s numbers do not go back further than 1961, so it’s impossible to say how long it’s been — if ever — since so many people were murdered in the city one 24-hour stretch.

We have come to expect a very high level of violence in Chicago, but one local expert says that the number of murders on that particular Sunday was “beyond anything that we’ve ever seen before”

“We’ve never seen anything like it, at all,” the crime lab’s senior research director, Max Kapustin, told the newspaper. “I don’t even know how to put it into context. It’s beyond anything that we’ve ever seen before.”

Chicago’s next most violent day was Aug. 4, 1991, when 13 murders were recorded.

At one time, America’s beautiful shining cities were the envy of the entire planet.

But now thousands of retail outlets have been boarded up, homelessness is absolutely exploding, and it looks like there will be much more rioting, looting and violence in the months ahead.

I have been writing about the plight of our major cities for many years, and even though I have been relentlessly warning that this was coming, it doesn’t make it any less sad.

I have really been feeling so sad lately.  Things didn’t have to turn out this way for America, but our choices have consequences, and we have been making really bad choices for decades.

Ultimately, I am quite glad that I was able to get away from the big cities when I did, and countless other Americans have made the exact same choice.

Now we are potentially facing a mass exodus from the major cities in the months ahead, and that will likely drive real estate prices in the most desirable small towns and rural communities through the roof.

Those that are wealthy will be able to afford such prices, but many others may find themselves completely priced out of the market and unable to relocate.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

Here Is Why The U.S. Economy Would Continue To Crash Even If All The Lockdowns Were Lifted Immediately…

COVID-19 has created an enormous amount of fear, and that fear is doing far more damage to the economy than the actual virus is.  In an environment of fear, financial institutions become a lot tighter with their money, and that inevitably causes economic activity to slow down.  For example, just consider what happened in 2008.  Mortgage lending standards suddenly became much more strict, and that greatly contributed to the horrific housing price crash which left millions upon millions of Americans underwater on their mortgages.  Unfortunately, this coronavirus pandemic has created a wave of fear that is far greater than what we experienced during the last recession, and that has enormous implications for the months ahead.

Extremely loose lending standards helped create debt-fueled “booms” throughout our economy in recent years, but now lending standards are going in the complete opposite direction very rapidly.

For instance, Chase is now requiring a credit score of at least 700 for all new home loans, and they are one of the financial institutions that is now requiring a down payment of at least 20 percent

A Chase spokesperson confirmed that starting April 14, new mortgage applicants will need a minimum credit score of 700 and a down payment of 20%. Refinancing applications for non-Chase mortgages will also need the same score. Chase didn’t disclose its previous lending standards but the average downpayment for first-time home buyers is around 6%, according to a 2018 survey from the National Association of Realtors.

If you own your home, would you have been approved for a mortgage under the new Chase standards?

And Chase is far from alone.  In fact, most major mortgage lenders have now tightened up, and Redfin is estimating that about a quarter of all home buyers last year would not have qualified under the new standards.

So if you remove about a quarter of all buyers from the marketplace moving forward, what happens to the housing market?

Yes, there will be an implosion, and it will happen no matter whether coronavirus lockdowns are in effect or not.

And home equity loans are going to be hit even harder.  As I discussed last week, Wells Fargo is no longer taking HELOC applications at all.

So now matter how good your credit is, you simply cannot get a home equity line of credit from Wells Fargo at this point.

This is what fear does.

We see similar things happening in the credit card industry.  Standards have been greatly tightened for new customers, and in some instances existing customers are having their limits slashed or their cards suddenly canceled.  The following comes from Newsweek

Analysts warn that credit card companies are lowering credit limits and canceling cards—often without warning—amid the pandemic-induced economic crisis, just as they did during the Great Recession.

If you think that this won’t have a dramatic impact on the U.S. economy, then you probably haven’t been paying attention.

Our economy is a consumer driven economy, and if consumers don’t have access to easy credit there is no way in the world that economic activity will return to previous levels.

Of course even if they did have access to easy credit, many Americans are so afraid of this virus that they have no intention of resuming normal economic patterns any time soon

Here’s hoping you enjoyed the last movie or concert you attended, because if the results of a new survey are accurate, it may be a long, long time before such events are ever popular again. According to the research, 40% of Americans plan to avoid public spaces unless “absolutely necessary” long after the coronavirus pandemic has subsided.

The survey, commissioned by Vital Vio, asked 1,000 U.S. adults about how they envision every day life in the wake of the coronavirus. All in all, it looks like there are suddenly a whole lot more germaphobes in the land of the free. Over four in five (82%) said they are now more aware of, and concerned about, cleaning protocols in public areas. Additionally, 58% are more suspicious about their friends’ and family’s hygiene habits.

And a lot of companies are also going to be extremely hesitant to “return to normal” because of the threat of lawsuits.

Earlier today, I was stunned to learn that 771 coronavirus-related lawsuits have already been filed…

Hundreds of lawsuits stemming from the coronavirus pandemic are rapidly amassing in state and federal courts, the first wave of litigation challenging decisions made early during the crisis by corporations, insurance companies and governments.

Claims have been filed against hospitals and senior-living facilities, airlines and cruise lines, fitness chains and the entertainment industry – 771 as of Friday, according to a database compiled by Hunton Andrews Kurth, an international law firm tracking cases that emerge from the pandemic.

Isn’t that insane?

I have repeatedly warned my readers that it will be exceedingly difficult to “return to normal” in our overly litigious society, but even I didn’t expect so many lawsuits so soon.

And this is just the beginning.  Eventually there will be thousands upon thousands of coronavirus lawsuits, and they will tie up our courts for the foreseeable future.

This pandemic just seems to be magnifying everything that is wrong with our society, and at this point the future looks so bleak that even perpetually optimistic Warren Buffett is throwing in the cards

A 95% plunge in passengers. Billions in losses. A rush for new debt. A recovery that executives expect to take years. Coronavirus is roiling the airline industry and the Oracle of Omaha has seen enough.

Warren Buffett told investors Saturday that Berkshire Hathaway has sold its entire stakes in the four largest U.S. airlines — AmericanDeltaSouthwestUnited — as the pandemic upends another bet on the sector that the famed investor had shunned for years before a surprise return in 2016.

Buffett understands that fear of this virus is going to paralyze air travel for a very long time to come, and he is getting out while he still can.

But if our society cannot even handle COVID-19, what will things look like once much worse things start happening?

It has been sobering to watch how rapidly our “snowflake society” has melted during this pandemic.

Now virtually the entire nation is paralyzed by fear, and the once great U.S. economy is crashing all around us.

And the really bad news is that this is just the beginning…

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

Demand For “Prepper Properties” Is Soaring As More People Seek Refuge From The Nightmare That Is Coming To America

In 2017 and 2018, most Americans were generally feeling pretty good about the future, and interest in “prepping” plummeted nationwide. But now things have changed. All of a sudden, demand for “prepper properties” is absolutely soaring, and this is driving up the prices of rural homes all over the nation. In fact, in some of the hottest areas working class families have already been completely priced out of the market. Meanwhile, luxury home prices in the heart of New York City have fallen to the lowest level in six years. Many are deeply concerned about the upcoming election, and many others are alarmed by all the other crazy stuff happening all over the world, but whatever the motivation it is undeniable that an increasing number of Americans are seeking to flee the major cities right now. There seems to be a growing consensus that our society is rapidly steamrolling toward a nightmare, and a lot of people are purchasing “prepper properties” while they still can.

I knew that conditions were shifting, but I was stunned when I saw that even Realtor.com had posted an article about this growing trend…

But today, Americans en masse are again preparing for the worst—and Communists are just about the only thing not on their list. What is? Terrorist attacks, a total economic collapse, perhaps even zombie invasions. Or maybe just a complete societal breakdown after this November’s scorched-Earth presidential election.

And Reuters just posted an article in which they discussed the fact that preppers have “boosted rural land values” in property markets all across the nation…

Whichever camp, realtors say the new dropouts are not “crackpots” and often include affluent professionals whose run for the hills has boosted rural land values and started to change their property market.

“I’ve had hedge-fund managers and billionaires that have made purchases, and they all have concerns about the direction of the economy and social stability,” said John E. Haynes, president of Retreat Realty in North Carolina.

That same Reuters article identified “Idaho, Montana and Wyoming” as three of the states with the hottest property markets. It has gotten to the point where even some of the biggest celebrities in the country are very eager to grab a slice of rural life. For example, Kanye West and Kim Kardashian just purchased a second extremely large ranch in Wyoming.

But mostly this trend is being driven by preppers, survivalists and those that want to own an “off-grid property”. The following comes from a recent NPR article

Welcome to the world of sustainable, survivalist real estate. There’s a growing market for this kind of off-grid property. Mondale figures over the past six to eight years, sales of these survivalist properties have risen by 50 percent.

“It seems like over the past few years, there’s just this need, I don’t want to say panic or frantic, but people feeling the need to be able to have someplace to go,” Mondale says.

Real estate agent Theresa Mondale has been in this game for a very long time, and she has never seen the market as hot as it is right now.

In fact, some of the prepper properties that she has listed sell for more than a million dollars

Despite the remoteness of these homes, they’re not backwoods shacks with sagging metal roofs. Some of her listings sell for more than $1 million if there’s a lot of land and if water rights are included. The one with the helicopter pad is a spiffy, two-story log home with a wraparound porch. It has solar panels and inside, a backup generator, luxury bathrooms and a kitchen with granite countertops and stainless steel appliances.

Over in Idaho, real estate agent Todd Savage has also noticed a huge surge in interest in prepper properties. He told Realtor.com that his sales are up 50 percent compared to a year ago…

For example, sales at American Redoubt Realty, a real estate firm nestled in the heart of prepper country in northern Idaho, are up 50% over the same time last year, says real estate agent Todd Savage, who specializes in such transactions. His clients typically hail from Texas and California.

As we approach the 2020 election, demand is going to continue to surge, and prices are only going to go higher.

And if great chaos breaks out during the aftermath of the election, that will drive prices into the stratosphere.

We live at a time when our nation is very deeply divided, but at the same time people from all walks of life are extremely concerned about where our society is heading.

In the event that things really start to fall apart, people want their families to be safe, and safety is not going to be found in the major cities.

Of course some developers are taking things to the extreme. For example, one developer has actually transformed a former nuclear missile silo in Kansas into what he is calling “survival condos”

Larry Hall is the brainchild behind such luxury developments which he refers to as ‘Survival Condos’. The project is a luxury complex housed 15 stories below ground in a former missile silo near Concordia, Kansas.

The missile silos were originally built by the US Army Corps of Engineers in the 1960s during the Cold War for the Atlas F missile, and there were 72 of them around the country.

Being stuck in a highly publicized hole in the ground when society starts to collapse may not be the best tactical situation, but apparently there is a lot of demand for these condos.

In fact, the price for a penthouse unit is a cool 4.5 million dollars

A full-floor apartment, spanning 1,800 square feet, will cost buyers $3million, while a 900-square-foot, half-floor unit is $1.5million. The ultra-wealthy can also make a penthouse selection starting at $4.5million.

Needless to say, only the ultra-wealthy can afford such extravagant accommodations.

But everyone should be preparing in their own way.

The relative stability that we had been enjoying has now given way to a time of great uncertainty. Economic conditions are deteriorating, global weather patterns are going completely nuts, war could break out in the Middle East at any time, civil unrest is on the rise all over the globe, a mysterious coronavirus is spreading very rapidly in Asia, our planet is becoming increasingly unstable, and the 2020 election looks like it could be a flashpoint for all the anger that has been boiling just under the surface in our nation for many years.

If you want to grab a prepper property, now is the time to do so, because time is running out and things are about to start getting really crazy out there.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

35 Reasons Why You Should Move Away From California

Wouldn’t it be wonderful if there was a “reboot” button for an entire state? Because the truth is that if an entire state ever needed to completely start over it is the state of California. At this point it has become the epicenter for just about everything that is wrong with America, and each year it just keeps coming up with new ways to become an even worse cesspool of social decay and depravity. Millions of people have already left the state, and millions more are thinking of leaving. One recent survey found that 47 percent of all Californians are thinking about moving out of the state in the next five years, and a different survey discovered that 53 percent of those currently living in the state would like to leave. If about half the people in your state are seriously considering leaving, it is safe to say that things have gone horribly wrong. But instead of changing course, those running California continue taking the state down a very self-destructive path.

It is such a shame, because California should be one of the greatest places in the world to live. The weather is wonderful most of the year, the state still possesses extraordinary natural beauty, and the tech industry provides plenty of high paying jobs.

When I was growing up, millions of young Americans dreamed of moving there and living “the California dream”, and when I was a young man I seriously explored the possibility of moving there myself.

And the truth is that a lot of great things have come out of the state. The following comes from a recent article by Ann Coulter

In the last century, every great thing started in California: surfing, jeans, Disneyland, tax revolts, McDonald’s, movies, car culture, the Grateful Dead, right on red turns, Merle Haggard, skateboarding, Apple computer, and the last two elected Republican presidents not named “Bush.”

But now I don’t know why anyone would want to live there.

If you currently live in California, I am about to tell you a whole bunch of reasons why you should leave. In fact, if I could get everybody to leave the state, I would.

However, if you feel specifically called to stay, then that is what you should do. Without a doubt, light is needed the most where things are the darkest, and California needs as much light as it can get right now.

Unfortunately, I believe that it is too late for the state as a whole. It is headed for a date with destiny, and most of the nearly 40 million people that live there have absolutely no idea what is coming.

If you live in the state and you do not know what you should do, I would get out while you still can. The following are 35 reasons why you should move away from California…

1. Incredibly high taxes. At this point, California has the highest marginal tax rate in the entire country.

2. Absurd housing costs.

3. The median home value in the state is now more than half a million dollars, and that is about twice as high as the national average.

4. It has been estimated that it now takes approximately $350,000 a year to live a middle class lifestyle in the city of San Francisco.

5. Endless wildfires.

6. Epic mudslides.

7. Horrific traffic jams.

8. Los Angeles has the worst traffic congestion in the entire world.

9. The education system is awful.

10. Medical tyranny.

11. One of the highest poverty levels in the United States.

12. Thousands of drug addicts are literally pooping in the streets.

13. Almost half of all the homeless people in the entire nation live in California.

14. The state is literally being overrun by millions of rats.

15. Los Angeles has been ranked as the second most rat-infested city in the country.

16. At this point things are so bad that even Los Angeles City Hall is being overrun by rats.

17. Illegal immigration is out of control, and the sanctuary cities in California are making things even worse.

18. Rising gang activity.

19. High crime rates.

20. There is now a law in California that protects shoplifters. So for those that enjoy shoplifting, this might actually be a reason to move into the state.

21. The drug war that has been raging in Mexico is increasingly spilling across the border.

22. California has been ranked as the worst state in the nation to do business year after year.

23. California is also one of the most litigious states in the entire country.

24. The once pristine beaches in the state are now being “completely overrun with fecal bacteria”.

25. Nancy Pelosi.

26. Kamala Harris.

27. Governor Gavin Newsom.

28. The lieutenant governor, the attorney general, the secretary of state and the state treasurer are all Democrats.

29. Democrats make up nearly two-thirds of the California State Senate.

30. Democrats make up more than two-thirds of the California State Assembly.

31. Both of the U.S. senators and 46 out of the 53 members of the House of Representatives that California sends to Washington are Democrats.

32. Much of the population is openly hostile to those that identify as conservatives.

33. California has been on the cutting edge of America’s moral decay for decades.

34. There have been more than 100,000 earthquakes in the state so far this year.

35. One day the “Big One” will hit California, and the geography of the state will be dramatically altered. The devastation will be unlike anything we have ever witnessed, and the death toll will be unimaginable.

If Donald Trump wins the next presidential election, there is a group of activists in California that plan to get a “Calexit” referendum on the ballot for the following election.

Those activists don’t want to be part of a country that would elect Trump two times, because they consider their values to be completely and utterly incompatible with Trump’s values.

But what is happening in this nation is far bigger than just Trump.

To me, it would be wonderful if the rest of the nation decided that their values were completely and utterly incompatible with California’s values. We desperately need to turn America around, and the way to do that is to head in a completely opposite direction from the way that California is going.

Sadly, it does not appear that is going to happen. California may be racing ahead of most of the rest of the country, but our final destination will be the same.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

It Is Time To Go: Over Half Of All California Voters “Have Considered Leaving The State”

Why in the world does anyone still want to live in California? Great weather and good paying jobs are the two biggest positives that residents often point out, but the high cost of living and the absolutely ridiculous housing prices often eat up all of the extra money that Californians think that they are making. In fact, it was recently reported that it now takes approximately $350,000 a year to live a middle class lifestyle in the city of San Francisco. If you have a ton of money, it can partially insulate you from the problems that are increasingly ravaging the state, but unless you never go out in public nothing is going to insulate you completely. Cities all over the state are degenerating into drug-infested, crime-ridden hellholes that are literally being overrun by millions of rats. California has some of the worst traffic in the entire world, unchecked illegal immigration is causing a whole host of social problems, and gang activity has become a massive problem. On top of everything else, California is being constantly hit by wildfires, mudslides, earthquakes and other natural disasters. In fact, scientists tell us that it is just a matter of time before “the Big One” hits, and that is probably one of the best reasons to leave California while you still can and never look back.

Yes, there are some California residents that continue to insist that it is a great place to live.

But if California is so wonderful, why have more than half of all California voters “considered leaving the state”? The following comes from the Los Angeles Times

Just over half of California’s registered voters have considered leaving the state, with soaring housing costs cited as the most common reason for wanting to move, according to a new poll.

Young voters were especially likely to cite unaffordable housing as a reason for leaving, according to the latest latest UC Berkeley Institute of Governmental Studies poll conducted for the Los Angeles Times. But a different group, conservatives, also frequently suggested they wanted to leave — and for a very different reason: They feel alienated from the state’s political culture.

With the way the state is being run, conservatives have been moving out of California in large numbers for years. In fact, I have a number of really good friends that left the state for political reasons and will never return.

On the other hand, California’s reputation for handing out free goodies has been a magnet for another class of people. Today, almost half of all homeless people in the entire nation live in the state of California, and this has become such a huge crisis that it literally makes headlines all over the globe.

For example, the following comes from an article in a British news source

Cali Carlisle admits she is a heroin addict — ‘but in a healthy way,’ she insists, even if the visual evidence belies that claim.

Her nose is the brightest shade of red imaginable. She constantly picks at scabs all over her body. Her home is a makeshift bed beneath Interstate 80 in Sacramento.

And Monday was her 26th birthday. Not that you would ever guess. Anyone looking at her would think she is at least 15 years older.

This is the cold, hard reality of the glorious drug lifestyle that so many go to California to experience.

Every year, thousands upon thousands of young people that once had bright futures ahead of them end up on the streets, in prison or dead due to this raging epidemic.

And one of the places where it is the worst is in the capital of the state itself. Not too long ago, a salon owner in Sacramento made headlines all over the nation when her rant about homelessness on social media went viral

“I just want to tell you what happens when I get to work,” stated Liz Novak, a local salon owner, to the media about what she’s had to deal with trying to conduct business in Sacramento.

“I have to clean up the poop and the pee off of my doorstep. I have to clean-up the syringes. I have to politely ask the people who I care for – I care for these people that are homeless – to move their tents out of the way of the door to my business.”

She ultimately had to move her salon completely because it became clear that things were not going to get better any time soon.

In the state of California today, virtually everything has been defiled.

At one time, California was teeming with natural beauty. But today the entire state has become a trash dumpster, and that includes California’s once pristine beaches. Just check out what Dr. Drew Pinsky recently told Laura Ingraham

“There is an organization out here called Heal the Bay which keeps tabs on safety of our beaches in Southern California, from Orange County to Ventura. Since the rains last Winter, [Heal the Bay] has been giving our beaches C’s to F’s, and F means completely overrun with fecal bacteria. What comes with that are other things like syringes, Hepatitis A and other infectious diseases.”

On top of everything else, seismic activity is a constant threat.

There have been more than 1,500 earthquakes in California and Nevada over the past 7 days, and these days that is considered to be a slow week.

Of course most of the earthquakes are very small, but scientists assure us that one of these days “the Big One” will hit the state. When that day arrives, the geography of the state will be radically changed, and the death and destruction will be off the charts.

We live at a time when our planet is being greatly shaken, and many believe that what we have seen so far is just the beginning.

The coastline of the state of California lies directly along the infamous “Ring of Fire”, and scientists have been persistently warning us that the San Andreas fault is “locked and loaded” and could possibly “unzip all at once”.

It is such a shame what has happened to the state. California should be one of the most beautiful, prosperous and enjoyable places to live in the entire world. Unfortunately, Californians have been making exceedingly poor choices for decades, and the consequences of those decisions will be extremely bitter indeed.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time. Of course the most important thing that we can share with people is the gospel of Jesus Christ, and if you would like to learn more about how you can become a Christian I would encourage you to read this article.

California Nightmare: Over Half Of The People Living In The State Wish They Could Leave

This just shows what can happen when you let crazy people run a state for several decades. In the 1960s and 1970s, the possibility of moving to the west coast was “the California dream” for millions of young Americans, but now “the California dream” has turned into “the California nightmare”. According to a brand new survey, 53 percent of those living in California are considering leaving the state, and there are certainly lots of reasons to hit the road and never look back. The cities are massively overcrowded, California has the worst traffic in the western world, drug use and illegal immigration both fuel an astounding amount of crime, tax rates are horrendous and many of the state politicians appear to literally be insane. And on top of all that, let us not forget the earthquakes, wildfires and landslides that are constantly making headlines all over the world. Last year was the worst year for wildfires in California history, and these days it seems like the state is hit by some new crisis every few weeks.

But none of those factors are the primary reason why so many people are eager to leave.

According to a brand new survey by Edelman Intelligence, the main reason why so many are considering leaving the state is the high cost of living

A growing number of Californians are contemplating moving from the state — and not due to wildfires or earthquakes but the sky-high cost of living, according to a survey released Wednesday.

The online survey, conducted last month by Edelman Intelligence, found that 53 percent of Californians surveyed are considering fleeing, representing a jump over the 49 percent polled a year ago. The desire to exit the nation’s most populous state was highest among millennials, the survey noted.

Thanks to absolutely ridiculous construction restrictions, it has become increasingly difficult to build new housing units in the state. But meanwhile, people from all over the world continue to move there because they are attracted by what they see on television.

As a result, the supply of housing has not kept up with demand, and prices have shot through the roof in recent years. The following numbers come from CNBC

Statewide, the median home value in California was $547,400 at the end of 2018, while the U.S. median home value was $223,900. By comparison, the median home value in New York state stood at $289,000 and $681,500 in New York City; New Jersey was $324,700.

Yes, there are a lot of good paying jobs in California, but you better have a really, really good job to be able to afford mortgage payments on a home worth half a million dollars.

Of course many Californians find themselves greatly stretched financially by out of control housing costs, and so more of them than ever are moving in with roommates. In fact, one recent report found that the number of married couples in the U.S. that are living with roommates “has doubled since 1995”

The number of married couples living with roommates has doubled since 1995, according to a recent report from real estate site Trulia. About 280,000 married people now live with a roommate — and that’s particularly true in pricey cities like those on the West Coast.

The reason: Housing costs a ton. In Honolulu and Orange Country, Calif., the share of married couples with roommates is between four and five times the national rate. San Francisco, Los Angeles, San Diego and Seattle also have sky high rates of married couples with roomies. Those same cities all have well above average rental and housing costs (Trulia notes that housing costs in all these markets have risen more than 30% since 2009), with residents of uber-pricey San Francisco requiring more than $123,000 in income to live comfortably, one study showed.

In addition to housing costs, many Californians are greatly frustrated by the oppressive levels of taxation in the state.

At this point, the state has the highest marginal tax rate in the entire country

At 12.3 percent, California led the 50 states in 2018 with the highest top marginal tax rate, according to the Federation of Tax Administrators. And that doesn’t include an additional 1-percent surcharge for those Californians with incomes of $1 million or more.

Ouch.

But at least the weather is nice.

Yesterday, I wrote an article entitled “Rats, Public Defecation And Open Drug Use: Our Major Western Cities Are Becoming Uninhabitable Hellholes”, and it sparked something of a firestorm. More than 1000 comments have already been posted on that article, and a few hearty individuals actually tried to convince the rest of us that life on the west coast is not actually all that bad.

I’m sorry, but if your city has far more intravenous drug users than it does high school students, that is not somewhere that I would want to raise a family

According to a report from the Chronicle, San Francisco now has more intravenous drug users than high school students. San Francisco, which operates 15 high schools, currently has 16,000 students enrolled grades nine through twelve.

By comparison, the northern California city currently has 24,500 “injection drug users.” That is approximately 8,500 more drug users than high school students.

As I mentioned yesterday, the city of San Francisco gave out 5.8 million free syringes to drug users last year.

When you have such widespread drug use, people are going to commit a lot of crime and they are going to do some really weird things. Just consider the following example

Authorities are searching for a man seen on security footage licking the doorbell of a California home and relieving himself in the family’s yard.

Police have identified the man as Roberto Arroyo, 33, and say that he spent three hours around the Salinas home of Sylvia and Dave Dungan.

The couple had been out of town, during the strange incident, but their children were sleep inside the family’s home. They noticed something amiss when they woke up to multiple alerts from their surveillance system, which notifies the homeowners whenever there is movement near the front door.

A lot of really good people used to live in California, but they left because of stupid stuff like this.

In fact, quite a few of my best friends are people that have moved out of the state within the last 10 years.

Over the past decade we have seen a mass exodus out of California. And according to Kristin Tate, the author of a new book entitled “How Do I Tax Thee?: A Field Guide to the Great American Rip-Off“, the “upper-middle class” has been moving out of the state faster than anyone else…

The largest socioeconomic segment moving from California is the upper-middle class. The state is home to some of the most burdensome taxes and regulations in the nation. Meanwhile, its social engineering — from green energy to wealth redistribution — have made many working families poorer. As California begins its long decline, the influx outward is picking up in earnest.

Overall, approximately 5 million people have packed up and permanently moved out of California within the last 10 years.

Unfortunately, the entire nation is slowly becoming just like California, and if we don’t turn things around eventually there will be no place left to go.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Stocks Plunge, Consumer Pessimism Grows And U.S. Home Sales Just Hit Their Lowest Level In 3 Years

It appears to be more likely than ever that the U.S. economy is heading for a recession. On Tuesday, the Dow Jones Industrial Average was down 301 points as investors were rattled by several very important pieces of news. Back in 2008, home sales began to fall precipitously just prior to the financial crisis in the second half of that year, and now it is happening again. Of course home sales are always going up and down, but the numbers that we are seeing now are definitely very unusual. According to the National Association of Realtors, existing home sales just hit their lowest level in 3 years

U.S. home sales tumbled to their lowest level in three years last month and house price increases slowed sharply, suggesting a further loss of momentum in the housing market.

The National Association of Realtors said on Tuesday existing home sales declined 6.4 percent to a seasonally adjusted annual rate of 4.99 million units last month — the lowest level since November 2015.

And when you compare December 2018 to December 2017, the numbers look even worse. According to Wolf Richter, last month existing home sales were down 10.3 percent on a year over year basis…

Sales of “existing homes” — including single-family houses, townhouses, condos, and co-ops — in December, plunged 10.3% from a year earlier, to a seasonally adjusted annual rate (SAAR) of 4.99 million homes, according to the National Association of Realtors this morning. This was the biggest year-over-year drop since May 2011, during the throes of Housing Bust 1

Those are absolutely horrible numbers, but thanks to high interest rates they aren’t going to get much better any time soon. Just like a decade ago, this is going to be a very tough time to be in the real estate industry.

During the “boom years”, the west was the hottest region for real estate in the entire nation, but now it is leading the way down. And last month was just abysmal, with sales falling 15 percent in that portion of the country…

  • Northeast: -6.8%, to an annual rate of 690,000.
  • Midwest: -10.5%, to an annual rate of 1.19 million.
  • South: -5.4%, to an annual rate of 2.09 million.
  • West: -15.0%, to an annual rate of 1.02 million.

Unfortunately, these are exactly the kinds of numbers that we would expect to see if the U.S. economy was heading into a recession.

Investors were also rattled on Tuesday by news that trade talks between the U.S. and China seem to be breaking down

Stocks fell to their lows of the day after the Financial Times reported the U.S. canceled a trade meeting with Chinese officials. CNBC later confirmed the report through a source. White House economic advisor Larry Kudlow denied the reports, saying the meetings are not canceled, giving stocks a boost into the close. China and the U.S. are trying to strike a permanent trade deal with the U.S. Both countries have been in a trade war since last year, slapping tariffs on billions of dollars worth of their goods.

We’ll see what happens, but the Chinese appear to be dragging their feet, and it does not look like there will be a major trade agreement between the two sides any time soon.

And when you throw in the fact that we are in the midst of the longest government shutdown in all of U.S. history, it becomes exceedingly clear that the elements for a “perfect storm” are definitely coming together.

In fact, Peter Schiff is entirely convinced that the coming recession is already “a done deal”…

“And they think simply because the Federal Reserve is no longer hiking rates that they no longer have to worry about the Fed pushing the economy into a recession. Well, it’s too late for that. The rate hikes of the past have already guaranteed that the economy is headed for recession. It doesn’t matter whether they continue to raise rates in the future. The recession is a done deal. It’s just now you have that calm between the storm while investors are still clueless and haven’t yet connected those, what should be, very obvious dots.

When the next recession comes, you will know who to blame. Every time the Federal Reserve has engaged in a rate hiking program since World War II, it has always ended in either a recession or a stock market crash. The Fed is the reason why the U.S. economy has been on a roller coaster ride for decades, and now we are steamrolling directly toward the “bust” portion of this cycle. If we ever want to end this madness, we need to abolish the Fed, and that means that we need to send people to Congress that are willing to take action on these things.

Sadly, it is probably going to take a major collapse before abolishing the Fed becomes a big political issue again. Economic issues have been on the back burner for a while, but that may be about to change, because pessimism about the economy is growing. According to Gallup, the percentage of Americans that believe economic conditions are worsening has risen by 12 points over the past two months…

Americans are not feeling very confident about the economy these days.

Almost half (48%) of Americans say economic conditions are worsening, up from 45% in December and 36% in November, according to a recent poll by Gallup, a Washington, D.C.-based research and consulting firm.

This is more evidence of the national psychological shift that I have been talking about. People are starting to realize what is happening, and they are becoming deeply concerned about what the future holds.

Well, the truth is that things are going to get a lot tougher. But instead of getting down in the dumps about it, we need to prepare for what is ahead, and we need to be ready to implement some positive solutions in the aftermath of the coming crisis.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites all over the nation. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

 

3 Things That Happened Just Before The Crisis Of 2008 That Are Happening Again Right Now

Real estate, oil and the employment numbers are all telling us the same thing, and that is really bad news for the U.S. economy. It really does appear that economic activity is starting to slow down significantly, but just like in 2008 those that are running things don’t want to admit the reality of what we are facing. Back then, Fed Chair Ben Bernanke insisted that the U.S. economy was not heading into a recession, and we later learned that a recession had already begun when he made that statement. And as you will see at the end of this article, current Fed Chair Jerome Powell says that he is “very happy” with how the U.S. economy is performing, but he shouldn’t be so thrilled. Signs of trouble are everywhere, and we just got several more pieces of troubling news.

Thanks to aggressive rate hikes by the Federal Reserve, the average rate on a 30 year mortgage is now up to about 4.8 percent. Just like in 2008, that is killing the housing market and it has us on the precipice of another real estate meltdown.

And some of the markets that were once the hottest in the entire country are leading the way down. For example, just check out what is happening in Manhattan

In the third quarter, the median price for a one-bedroom Manhattan home was $815,000, down 4% from the same period in 2017. The volume of sales fell 12.7%.

Of course things are even worse at the high end of the market. Some Manhattan townhouses are selling for millions of dollars less than what they were originally listed for.

Sadly, Manhattan is far from alone. Pending home sales are down all over the nation. In October, U.S. pending home sales were down 4.6 percent on a year over year basis, and that was the tenth month in a row that we have seen a decline…

Hope was high for a rebound (after new-home-sales slumped), but that was dashed as pending home sales plunged 2.6% MoM in October (well below the expected 0.5% MoM bounce).

Additionally, Pending Home Sales fell 4.6% YoY – the 10th consecutive month of annual declines…

When something happens for 10 months in a row, I think that you can safely say that a trend has started.

Sales of new homes continue to plummet as well. In fact, we just witnessed a 12 percent year over year decline for sales of new single family houses last month

Sales of new single-family houses plunged 12% in October, compared to a year ago, to a seasonally adjusted annual rate of 544,000 houses, according to estimates by the Census Bureau and the Department of Housing and Urban Development.

With an inventory of new houses for sale at 336,000 (seasonally adjusted), the supply at the current rate of sales spiked to 7.4 months, from 6.5 months’ supply in September, and from 5.6 months’ supply a year ago.

If all of this sounds eerily similar to 2008, that is because it is eerily similar to what happened just before and during the last financial crisis.

Up until now, at least the economic optimists could point to the employment numbers as a reason for hope, but not anymore.

In fact, initial claims for unemployment benefits have now risen for three weeks in a row

The number of Americans filing applications for jobless benefits increased to a six-month high last week, which could raise concerns that the labor market could be slowing.

Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 234,000 for the week ended Nov. 24, the highest level since the mid-May, the Labor Department said on Thursday. Claims have now risen for three straight weeks.

This is also similar to what we witnessed back in 2008. Jobless claims started to creep up, and then when the crisis fully erupted there was an avalanche of job losses.

And just like 10 years ago, we are starting to see a lot of big corporations start to announce major layoffs.

General Motors greatly upset President Trump when they announced that they were cutting 14,000 jobs just before the holidays, but GM is far from alone. For a list of some of the large firms that have just announced layoffs, please see my previous article entitled “U.S. Job Losses Accelerate: Here Are 10 Big Companies That Are Cutting Jobs Or Laying Off Workers”.

A third parallel to 2008 is what is happening to the price of oil.

In 2008, the price of oil shot up to a record high before falling precipitously.

Well, now a similar thing has happened. Earlier this year the price of oil shot up to $76 a barrel, but this week it slid beneath the all-important $50 barrier

Oil’s recent slide has shaved more than a third off its price. Crude fell more than 1% Thursday to as low as $49.41 a barrel. The last time oil closed below $50 was in October 4, 2017. By mid morning the price had climbed back to above $51.

Concerns about oversupply have sent oil prices into a virtual freefall: Crude hit a four-year high above $76 a barrel less than two months ago.

When economists are asked why the price of oil is falling, the primary answer they give is because global economic activity is softening.

And that is definitely the case. In fact, we just learned that economic confidence in the eurozone has declined for the 11th month in a row

Euro-area economic confidence slipped for an 11th straight month, further damping expectations that the currency bloc will rebound from a sharp growth slowdown and complicating the European Central Bank’s plans to pare back stimulus.

In addition, we just got news that the Swiss and Swedish economies had negative growth in the third quarter.

The economic news is bad across the board, and it appears to be undeniable that a global economic downturn has begun.

But current Fed Chair Jerome Powell insists that he is “very happy about the state of the economy”

Jerome H. Powell, the Federal Reserve’s chairman, has also taken an optimistic line, declaring in Texas recently that he was “very happy about the state of the economy.”

That is just great. He can be as happy as he wants, and he can continue raising interest rates as he sticks his head in the sand, but nothing is going to change economic reality.

Every single Fed rate hiking cycle in history has ended in a market crash and/or a recession, and this time won’t be any different.

The Federal Reserve created the “boom” that we witnessed in recent years, but we must also hold them responsible for the “bust” that is about to happen.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Much Worse Than Expected: Experts Shocked As New Home Sales Plunge 8.9 Percent

The U.S. economy is definitely deviating from the script, and we just got more evidence that “Housing Bubble 2” is bursting. Experts were expecting that new home sales in the U.S. would rise in October, but instead they plunged 8.9 percent. That number is far worse than anyone was projecting, and many in the real estate industry are really starting to freak out. And to be honest, things look like they are going to get even worse in 2019. One survey found that the percentage of Americans that plan to buy a home over the next 12 months has fallen by about half during the past year. Mortgage rates have steadily risen as the Federal Reserve has been hiking interest rates, and at this point most average Americans have been completely priced out of the market. Home prices are going to have to come way down from where they are right now, and just as we witnessed in 2008, rapidly falling home prices can put an extraordinary amount of stress on the financial system.

It is hard for me to put into words just how bad this latest number is. Even though I write about our growing economic problems on a daily basis, even I didn’t expect to see a number anywhere near this bad. Sometimes a really bad number from one part of the U.S. can drag down the overall number, but that wasn’t the case this time. According to Reuters, there were “sharp declines in all four regions”…

Sales of new U.S. single-family homes tumbled to a more than 2-1/2-year low in October amid sharp declines in all four regions, further evidence that higher mortgage rates were hurting the housing market.

The Commerce Department said on Wednesday new home sales dropped 8.9 percent to a seasonally adjusted annual rate of 544,000 units last month. That was the lowest level since March 2016. The percent drop was the biggest since December 2017.

But of course it isn’t as if this latest report is coming out of nowhere. The truth is that new home sales have fallen in four of the last six months, and so a very clear trend is now developing.

Sadly, most mainstream economists still don’t seem to be understanding what is happening. According to Reuters, the consensus estimate was that we would see new home sales rise 3.7 percent in October, and so an 8.9 percent plunge came as a real shock.

New home sales have now missed expectations for seven months in a row, and the similarities to 2008 are starting to become undeniable.

Sales of previously owned homes have been falling as well. In fact, in October we witnessed the largest drop for previously owned home sales in four years

Sales of previously owned U.S. homes posted their largest annual decline since 2014 in October, as the housing market continues to sputter due to higher mortgage rates that are reducing home affordability.

If you want to blame someone for this mess, blame the Federal Reserve.

They created a “boom” in the housing market by pushing interest rates all the way to the floor during the Obama years, and now they are creating a “bust” by aggressively jacking up interest rates at a pace that our economy simply cannot handle.

If we had allowed the free market to be setting interest rates all this time, we would not be on such a roller coaster ride.

Just like during “Housing Bubble 1”, millions of Americans have been buying houses that they cannot afford, and that could mean another massive wave of mortgage defaults as this new economic downturn intensifies. At this point, the debt to income ratio for mortgages insured by the FHA is at an all-time record high

One worrying indicator: The average debt-to-income ratio for mortgages insured by the Federal Housing Administration, which makes up about 22% of the housing market, is now at its highest level ever.

This is yet another indication that we are even more vulnerable than we were just prior to the subprime mortgage meltdown during the last financial crisis.

Let me try to shed some light on what is coming next. Even if economic conditions remained stable, housing prices would need to start falling dramatically in order to attract buyers. In fact, we are already starting to see this happen in southern California and other markets that were once extremely “hot”. As housing prices fall, millions of Americans will suddenly find themselves “underwater” on their mortgages. In other words, they will owe more on their homes than their homes are worth. During the last recession, many “underwater” homeowners ultimately decided to walk away rather than continue to service ridiculously bloated mortgages.

But the truth is that economic conditions are not likely to remain stable. In fact, many are projecting that the approaching downturn will be even worse than 2008.

In such a scenario, millions of Americans will lose their jobs, and that means that millions of Americans will suddenly not be able to make their mortgage payments. As a result, mortgage defaults will skyrocket and home prices will drop like a rock. Just like last time around, there could be people that wake up one day and realize that they owe two or three times as much money on their mortgages as their homes are currently worth, and the stampede of people walking away from “underwater” mortgages could become an avalanche.

Needless to say, millions of mortgages suddenly going bad is a scenario that our financial system is not equipped to handle. What happened in 2008 was absolutely catastrophic for our large financial institutions, and what is coming is going to be even worse.

Of course the big financial institutions will want the federal government to bail them out, but there may not be much of an appetite for more corporate bailouts this time around.

And considering the fact that we are already 22 trillion dollars in debt, we can’t exactly afford to be throwing money around.

The Federal Reserve has set the stage for a giant mess, and it is going to shake the housing industry to the core.

We should have learned from the mistakes that we made in 2008, but we didn’t, and so now we are going to pay a very great price for our negligence.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Next U.S. Housing Crisis Has Arrived: Existing Home Sales Post Their Biggest Decline In 4 Years

Things just continue to get even worse for the U.S. housing industry. New homes sales have been absolutely plummeting, homebuilder stocks have lost over a third of their value, and existing home sales just posted their biggest decline since 2014. For years, we had been witnessing a real estate boom in the United States, but now that has officially ended. It is starting to feel like 2008 all over again, and many of those that work in the industry are really starting to freak out. The Federal Reserve has been aggressively raising interest rates, and it is having the exact same effect on the housing industry that it did just before the last recession.

It wasn’t supposed to be this way. A supposedly “booming” economy was supposed to lead to a surge in demand for housing, but instead sales of existing homes had an absolutely terrible month in October

Sales of previously owned U.S. homes posted their largest annual decline since 2014 in October, as the housing market continues to sputter due to higher mortgage rates that are reducing home affordability.

And this certainly was not an anomaly. Existing home sales have been down on a yearly basis for quite some time, and it doesn’t appear that things will turn around any time soon.

Just look at what is happening in California. Not too long ago prices were soaring, but now a luxury estate has just sold for more than 50 percent off.

That would have been unthinkable just a few months ago.

Meanwhile, sales of new homes have been depressingly low as well. As a result, homebuilders have been implementing extreme measures in order to get sales. The following comes from Bloomberg

Ram Konara, a real estate broker in suburban Dallas, is raking in freebies this year: trips to Lake Tahoe and Santa Barbara in California, Cabo San Lucas in Mexico, and a dude ranch in Wyoming. The homebuyers he represents are cashing in, too. They’re winning price cuts of more than $100,000, on top of free upgrades such as media rooms, cabinets, and blinds.

This generosity flows from increasingly desperate homebuilders. Hot markets are cooling fast as interest rates rise. In the great housing slowdown of 2018, shoppers are reclaiming the upper hand, after years of soaring prices that placed most inventory out of reach for many families. “Everybody is hungry for the buyers,” Konara says.

Unfortunately, buyers are rapidly disappearing from the landscape. One recent survey discovered that just 13 percent of all Americans plan to purchase a home during the next year. That number has declined for three consecutive quarters, and it has now fallen by nearly half over the past 12 months.

But of course Americans still need homes. That hasn’t changed at all. In fact, we have millions of young adults that should be buying their first homes right now, but instead record numbers of them are living with Mommy and Daddy.

If you can believe it, one new study just found that a third of all young adults in the United States live with their parents

More adult millennials are moving home to save money, and its making them more depressed, new research reveals.

And it’s making their parents pretty miserable too, according to other recent research.

A full third of young adults in the US live with their parents. In fact, millennial men and women are more likely to live with mom and dad than in any other living arrangement.

Thanks to a lack of good paying jobs, a lot of those young adults simply cannot afford to buy homes.

And as the middle class disintegrates, the number of Americans that are homeless just continues to rise. Just consider these numbers

In Seattle, the number of “unsheltered” homeless counted on a single night in January jumped 15 percent this year from 2017—a period when the value of Amazon.com Inc., one of the city’s dominant employers, rose 68 percent, to $675 billion. In California, home to Apple, Facebook, and Google, some 134,000 people were homeless during the annual census for the Department of Housing and Urban Development in January last year, a 14 percent jump from 2016. About two-thirds of them were unsheltered, the highest rate in the nation.

At least 10 cities on the West Coast have declared states of emergency in recent years. San Diego and Tacoma, Wash., recently responded by erecting tents fit for disaster relief areas to provide shelter for their homeless. Seattle and Sacramento may be next.

More than half a million Americans are homeless right now, and all of them could use homes.

So it isn’t as if we have too many homes in America. We have plenty of people that could fill all of the homes that already exist, but our broken system is not able to connect those people with homes.

In order to have a healthy housing industry, we need a thriving middle class, and right now the middle class is shrinking. Most American families are barely scraping by from month to month, and debt delinquencies are on the rise.

In fact, credit card debt delinquencies at small banks are now even higher than they were during the last recession

In the third quarter, the “delinquency rate” on credit-card loan balances at commercial banks other than the largest 100 banks – so the delinquency rate at the 4,705 smaller banks in the US – spiked to 6.2%. This exceeds the peak during the Financial Crisis for these banks (5.9%).

The credit-card “charge-off rate” at these banks, at 7.4% in the third quarter, has now been above 7% for five quarters in a row. During the peak of the Financial Crisis, the charge-off rate for these banks was above 7% four quarters, and not in a row, with a peak of 8.9%.

Most Americans seem to believe that the problems that caused the last crisis were fixed, but that never happened. They simply patched together the old system and inflated the bubbles bigger than ever before. As a result, we have a giant mess on our hands now.

In my most recent book, I set forth some solutions for fixing our fundamental economic and financial problems, and they are pretty radical.

But what we are doing now is simply not working, and as the U.S. economy continues to fall apart hopefully that will become increasingly apparent to everyone.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

In California, Home Sales Are Plunging Like It Is 2008 All Over Again

What goes up must eventually come down. For years, the California housing market was on the cutting edge of “Housing Bubble 2” as we witnessed home prices in the state soar to absolutely absurd levels. In fact, it got so bad that a burned down house in Silicon Valley sold for $900,000 earlier this year, and a condemned home in Fremont sold for $1.2 million. But now things have changed in a major way. The hottest real estate markets in the entire country led the way down during the collapse of “Housing Bubble 1”, and now it looks like the same thing is going to be true for the sequel.

According to CNBC, the number of new and existing homes sold in southern California was down 18 percent in September compared to a year ago…

The number of new and existing houses and condominiums sold during the month plummeted nearly 18 percent compared with September 2017, according to CoreLogic. That was the slowest September pace since 2007, when the national housing and mortgage crisis was hitting.

Sales have been falling on an annual basis for much of this year, but this was the biggest annual drop for any month in almost eight years. It was also more than twice the annual drop seen in August.

Those numbers are staggering.

And it is interesting to note that sales of new homes are being hit even harder than sales of existing homes…

Sales of newly built homes are suffering more than sales of existing homes, likely because fewer are being built compared with historical production levels. Newly built homes also come at a price premium. Sales of newly built homes were 47 percent below the September average dating back to 1988, while sales of existing homes were 22 percent below their long-term average.

At one time, San Diego County was a blazing hot real estate market, but now the market has turned completely around.

In fact, the county just registered the fewest number of home sales in a month since the last financial crisis

A combination of rapid mortgage rate increases and decreased affordability, San Diego County home sales collapsed 17.5% to the lowest level in 11 years last month, in the first meaningful sign that one of the country’s hottest real estate markets could be at a turning point, real estate tracker CoreLogic reported Tuesday.

In September, 2,942 homes were sold in the county, down from 3,568 sales last year. This was the lowest number of sales for the month since the start of the financial crisis when 2,152 sold in September 2007.

And it can be argued that things are plunging even more rapidly in northern California.

In the San Francisco Bay area, sales of new and existing homes were down 19 percent in September on a year over year basis…

Home sales in the San Francisco Bay area have been falling for months, but in September buyers pulled back in an even bigger way.

Sales of both new and existing homes plunged nearly 19 percent compared with September 2017, according to CoreLogic. It marked the slowest September sales pace since 2007 and twice the annual drop seen in August.

If a new real estate crisis is really happening, these are precisely the kinds of numbers that we would expect to see. If you still need some more convincing, here are even more distressing numbers from the California real estate market that Mish Shedlock recently shared

  • The California housing market posted its largest year-over-year sales decline since March 2014 and remained below the 400,000-level sales benchmark for the second consecutive month in September, indicating that the market is slowing as many potential buyers put their homeownership plans on hold.
  • Existing, single-family home sales totaled 382,550 in September on a seasonally adjusted annualized rate, down 4.3 percent from August and down 12.4 percent from September 2017.
  • September’s statewide median home price was $578,850, down 2.9 percent from August but up 4.2 percent from September 2017.
  • Statewide active listings rose for the sixth consecutive month, increasing 20.4 percent from the previous year.
  • Inventory reached the highest level in 31 months, with the Unsold Inventory Index reaching 4.2 months in September.
  • September year-to-date sales were down 3.3 percent.

Of course a similar thing is happening on the east coast as well. At this point, things have cooled off so much in New York City that it is being called “a buyer’s market”

New York City’s pricey real estate has become a “buyers market,” new data suggests, characterized by lowball offers and a rise in the number of properties staying on the market for longer.

The latest figures from Warburg Realty show that among higher-priced homes, New York City is in the throes of a “major shift” that reflects a cooling market, the likes of which hasn’t been seen in almost a decade.

“Offers 20 percent and 25 percent below asking prices began to flow in, a phenomenon last seen in 2009,” wrote Warburg Realty founder and CEO Frederick W. Peters in the report, which surveys real estate conditions around the city.

In the final analysis, it is no mystery how we got to this point.

During the Obama era, the Federal Reserve pushed interest rates all the way to the floor for years, and this caused “Housing Bubble 2” to become even larger than the original housing bubble.

Now the Federal Reserve has been aggressively raising interest rates, and this is now busting the bubble that they created in the first place.

So if you want to blame someone for this mess, blame the Federal Reserve. The Federal Reserve has created huge “booms” and “busts” ever since it was created in 1913, and hopefully the American people will be outraged enough following this next “bust” to start calling for real change.

I have been calling for the abolition of the Federal Reserve for years, and there are many others out there that also want to return to a free market financial system.

History has shown that free markets work exceedingly well once you take the shackles off, and as a nation we desperately need to return to the values and principles that this nation was founded upon.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Last Days Warrior Summit is the premier online event of 2018 for Christians, Conservatives and Patriots. It is a premium members-only international event that will empower and equip you with the knowledge and tools that you need as global events begin to escalate dramatically. The speaker list includes Michael Snyder, Mike Adams, Dave Daubenmire, Ray Gano, Dr. Daniel Daves, Gary Kah, Justus Knight, Doug Krieger, Lyn Leahz, Laura Maxwell and many more. Full summit access will begin on October 25th, and if you would like to register for this unprecedented event you can do so right here.

Middle Class Erosion: 33 Million Americans Will Not Travel During The Holidays Because They Can’t Afford To Do So

We have repeatedly been told that the U.S. economy is “booming”, but meanwhile the middle class in the United States continues to be hollowed out. The financial bubbles that the Federal Reserve has created have been a great blessing for those at the very top of the economic pyramid, but most of the country is still deeply struggling. According to one survey, 78 percent of all full-time workers in the U.S. live paycheck to paycheck, and that doesn’t even include part-time workers or those that are unemployed. We have also been told that unemployment is “low”, but the real numbers tell us that there are more working age Americans without a job in 2018 than there was at any point during the last recession. Most of the people that my wife and I know are struggling, and I continually get emails from readers all over the country that are struggling. The sad truth is that the middle class is slowly but surely dying, and more people are falling into poverty with each passing day.

And we got more evidence of this fact on Tuesday. According to one new survey, 33 million Americans will not travel during the holiday season because they simply cannot afford to do so…

Wallet Hub’s Winter Travel Survey has revealed a disturbing trend: 33 million Americans won’t travel this winter because they can’t afford it.

I have been warning about the effect that rising interest rates would have on the economy, and rising rates are being blamed for this travel slowdown. The following comes from MSN

However, Americans are still feeling the pinch of the pocketbook—part of that has to do with rising interest rates.

“U.S. consumers will be shelling out billions of dollars in extra charges they otherwise could be spending on other things such as travel,” said Mark A. Bonn, director of the resort and vacation rental management program at Florida State University. “This makes it difficult to travel now, let alone after the holiday spending has ended.”

But of course the truth is that most Americans were deeply struggling long before interest rates started to rise.

Those of us in our prime working years can try to work even harder to make ends meet, but when you are elderly and on a fixed income, there is little that can be done.

According to the Sacramento Bee, 9 million elderly Americans across the country “can’t afford to eat”, and in one of their recent articles they featured the plight of 71-year-old Floridian Janet Burke…

Burke is one of the nearly 9 million elderly people at risk of hunger in the United States. In Florida, with the highest percentage of people 60 and older, more than 750,000 elderly need food assistance, according to experts.

The problems confronting the elderly have become one of the hot topics for candidates this election year. Candidates in South Florida have pointed to the needs of the elderly as one of the key concerns voiced by voters.

More than 100 million Americans receive assistance from the government each month, but many citizens do not believe in receiving any help and so they just quietly suffer as they search for a way to make things better.

Today, I would like to share with you a testimony from someone that has been there. My good friend Daisy Luther knows what it is like to barely survive from month to month, and the way that she described those struggles in one of her most recent articles was extremely poignant

Let’s talk about poverty.

I don’t mean the kind you’re talking about when your friends invite you to go shopping or for a night out and you say, “No, I can’t. I’m poor right now.”

I don’t mean the situation when you’d like to get a nicer car but decide you should just stick to the one you have because you don’t have a few thousand for a down payment.

I don’t mean the scene at the grocery store when you decide to get ground beef instead of steak.

I’m talking about when you have already done the weird mismatched meals from your pantry that are made up of cooked rice, stale crackers, and a can of peaches, and you’ve moved on to wondering what on earth you’re going to feed your kids.

Or when you get an eviction notice for non-payment of rent, a shut-off notice for your utilities, and a repo notice for your car and there’s absolutely nothing you can do about any of those notices because there IS NO MONEY.

If you’ve never been this level of broke, I’m very glad.

I have been this broke. I know that it is soul-destroying when no matter how hard you work, how many part-time jobs you squeeze in, and how much you cut, you simply don’t make enough money to survive in the world today.

If the U.S. economy really is “booming”, then why are millions upon millions of American families struggling like this?

Sadly, it is because the truth is that the U.S. economy is not “booming”, and we continue to get more indications that another major economic downturn is imminent.

It doesn’t have to be this way. Blueprints have been proposed that would mean much better days ahead for America, but most Americans seem quite content with the status quo.

Most Americans seem to want corrupt politicians in Washington, a Federal Reserve system that is bankrupting future generations, an exploding national debt, a deeply oppressive system of taxation and a bloated national government that is becoming more monstrous with each passing day.

In this day and age, “liberty” and “freedom” are seen as antiquated concepts that are standing in the way of “progress”, and more government always seems to be the “solution” that is proposed whenever any crisis arises.

If we truly want to turn America around, we need to return to the values and the principles that once made this nation so great, and right now that simply is not happening…

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Last Days Warrior Summit is the premier online event of 2018 for Christians, Conservatives and Patriots. It is a premium-members only international event that will empower and equip you with the knowledge and tools that you need as global events begin to escalate dramatically. The speaker list includes Michael Snyder, Mike Adams, Dave Daubenmire, Ray Gano, Dr. Daniel Daves, Gary Kah, Justus Knight, Doug Krieger, Lyn Leahz, Laura Maxwell and many more. Full summit access will begin on October 25th, and if you would like to register for this unprecedented event you can do so right here.

Evidence The Housing Bubble Is Bursting?: “Home Sellers Are Slashing Prices At The Highest Rate In At Least Eight Years”

The housing market indicated that a crisis was coming in 2008. Is the same thing happening once again in 2018? For several years, the housing market has been one of the bright spots for the U.S. economy. Home prices, especially in the hottest markets on the east and west coasts, had been soaring. But now that has completely changed, and home sellers are cutting prices at a pace that we have not seen since the last recession. In case you are wondering, this is definitely a major red flag for the economy. According to CNBC, home sellers are “slashing prices at the highest rate in at least eight years”…

After three years of soaring home prices, the heat is coming off the U.S. housing market. Home sellers are slashing prices at the highest rate in at least eight years, especially in the West, where the price gains were hottest.

It is quite interesting that prices are being cut fastest in the markets that were once the hottest, because that is exactly what happened during the subprime mortgage meltdown in 2008 too.

In a previous article, I documented the fact that experts were warning that “the U.S. housing market looks headed for its worst slowdown in years”, but even I was stunned by how bad these new numbers are.

According to Redfin, more than one out of every four homes for sale in America had a price drop within the most recent four week period…

In the four weeks ended Sept. 16, more than one-quarter of the homes listed for sale had a price drop, according to Redfin, a real estate brokerage. That is the highest level since the company began tracking the metric in 2010. Redfin defines a price drop as a reduction in the list price of more than 1 percent and less than 50 percent.

That is absolutely crazy.

I have never even heard of a number anywhere close to that in a 30 day period.

Of course the reason why prices are being dropped is because homes are not selling. The supply of homes available for sale is shooting up, and that is good news for buyers but really bad news for sellers.

It could be argued that home prices needed to come down because they had gotten ridiculously high in recent months, and I don’t think that there are too many people that would argue with that.

But is this just an “adjustment”, or is this the beginning of another crisis for the housing market?

Just like a decade ago, millions of American families have really stretched themselves financially to get into homes that they really can’t afford. If a new economic downturn results in large numbers of Americans losing their jobs, we are once again going to see mortgage defaults rise to stunning heights.

We live at a time when the middle class is shrinking and most families are barely making it from month to month. The cost of living is steadily rising, but paychecks are not, and that is resulting in a huge middle class squeeze. I really like how my good friend MN Gordon made this point in his most recent article

The general burden of the American worker is the daily task of squaring the difference between the booming economy reported by the government bureaus and the dreary economy reported in their biweekly paychecks. There is sound reason to believe that this task, this burden of the American worker, has been reduced to some sort of practical joke. An exhausting game of chase the wild goose.

How is it that the economy’s been growing for nearly a decade straight, but the average worker’s seen no meaningful increase in their income? Have workers really been sprinting in place this entire time? How did they end up in this ridiculous situation?

The fact is, for the American worker, America’s brand of a centrally planned economy doesn’t pay. The dual impediments of fake money and regulatory madness apply exactions which cannot be overcome. There are claims to the fruits of one’s labors long before they’ve been earned.

The economy, in other words, has been rigged. The value that workers produce flows to Washington and Wall Street, where it’s siphoned off and misallocated to the cadre of officials, cronies, and big bankers. What’s left is spent to merely keep the lights on, the car running, and food upon the table.

And unfortunately, things are likely to only go downhill from here.

The trade war is really starting to take a toll on the global economy, and it continues to escalate. Back during the Great Depression we faced a similar scenario, and we would be wise to learn from history. In a recent post, Robert Wenzel shared a quote from Dr. Benjamin M. Anderson that was pulled from his book entitled “Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946”

[T]here came another folly of government intervention in 1930 transcending all the rest in significance. In a world staggering under a load of international debt which could be carried only if countries under pressure could produce goods and export them to their creditors, we, the great creditor nation of the world, with tariffs already far too high, raised our tariffs again. The Hawley-Smoot Tariff Act of June 1930 was the crowning folly of the who period from 1920 to 1933….

Protectionism ran wild all over the world. Markets were cut off. Trade lines were narrowed. Unemployment in the export industries all over the world grew with great rapidity, and the prices of export commodities, notably farm commodities in the United States, dropped with ominous rapidity….

The dangers of this measure were so well understood in financial circles that, up to the very last, the New York financial district retained hope the President Hoover would veto the tariff bill. But late on Sunday, June 15, it was announced that he would sign the bill. This was headline news Monday morning. The stock market broke twelve points in the New York Time averages that day and the industrials broke nearly twenty points. The market, not the President, was right.

Even though the stock market has been booming, everything else appears to indicate that the U.S. economy is slowing down.

If home prices continue to fall precipitously, that is going to put even more pressure on the system, and it won’t be too long before we reach a breaking point.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The American Dream Is Getting Smaller, And The Reason Why Is Painfully Obvious…

Over the past decade, an unprecedented stock market boom has created thousands upon thousands of new millionaires, and yet the middle class in America has continued to shrink. How is that even possible? At one time the United States had the largest and most vibrant middle class in the history of the planet, but now the gap between the wealthy and the poor is the largest that it has been since the 1920s. Our economy has been creating lots of new millionaires, but at the exact same time we have seen homelessness spiral out of control in our major cities. Today, being part of the middle class is like playing a really bizarre game of musical chairs. Each month when the music stops playing, those of us still in the middle class desperately hope that we are not among the ones that slip out of the middle class and into poverty. Well over 100 million Americans receive money or benefits from the federal government each month, and that includes approximately 40 percent of all families with children. We are losing our ability to take care of ourselves, and that has frightening implications for the future of our society.

One of the primary reasons why our system doesn’t work for everyone is because virtually everything has been financialized. In other words, from the cradle to the grave the entire system has been designed to get you into debt so that the fruits of your labor can be funneled to the top of the pyramid and make somebody else wealthier. The following comes from an excellent Marketwatch article entitled “The American Dream is getting smaller”

More worrying, perhaps: 33% of those surveyed said they think that dream is disappearing. Why? They have too much debt. “Americans believe financial security is at the core of the American Dream, but it is alarming that so many think it is beyond their reach,” said Mike Fanning, head of MassMutual U.S.

Almost everyone that will read this article will have debt. In America today, we are trained to go into debt for just about everything.

If you want a college education, you go into debt.

If you want a vehicle, you go into debt.

If you want a home, you go into debt.

If you want that nice new pair of shoes, you don’t have to wait for it. Just go into more debt.

As a result, most Americans are currently up to their necks in red ink

Some 64% of those surveyed said they have a mortgage, 56% said they had credit-card debt and 26% said they have student-loan debt. Many surveyed said they don’t feel financially secure. More than a quarter said they wish they had better control of their finances.

You would have thought that we would have learned from the very hard lessons that the crisis of 2008 taught us.

But instead, we have been on the greatest debt binge in American history in recent years. Here is more from the Marketwatch article

It makes sense that debt is on Americans’ minds. Collectively, Americans have more than $1 trillion in credit-card debt, according to the Federal Reserve. They have another $1.5 trillion in student loans, up from $1.1 trillion in 2013. Motor vehicle loans are now topping $1.1 trillion, up from $878.5 billion in 2013. And they have another nearly $15 trillion in mortgage debt outstanding.

That is one huge pile of debt.

We criticize the federal government for running up 21 trillion dollars in debt, and rightly so, but American consumers have been almost as irresponsible on an individual basis.

As long as you are drowning in debt, you will never become wealthy. In order to build wealth, you have got to spend less than you earn, but most Americans never learn basic fundamentals such as this in our rapidly failing system of public education.

Many Americans long to become financially independent, but they don’t understand that our system is rigged against them. The entire game is all about keeping consumers on that debt wheel endlessly chasing that piece of proverbial cheese until it is too late.

Getting out of debt is one of the biggest steps that you can take to give yourself more freedom, and hopefully this article will inspire many to do just that.

To end this article today, I would like to share 14 facts about how the middle class in America is shrinking that I shared in a previous article

#1 78 million Americans are participating in the “gig economy” because full-time jobs just don’t pay enough to make ends meet these days.

#2 In 2011, the average home price was 3.56 times the average yearly salary in the United States. But by the time 2017 was finished, the average home price was 4.73 times the average yearly salary in the United States.

#3 In 1980, the average American worker’s debt was 1.96 times larger than his or her monthly salary. Today, that number has ballooned to 5.00.

#4 In the United States today, 66 percent of all jobs pay less than 20 dollars an hour.

#5 102 million working age Americans do not have a job right now. That number is higher than it was at any point during the last recession.

#6 Earnings for low-skill jobs have stayed very flat for the last 40 years.

#7 Americans have been spending more money than they make for 28 months in a row.

#8 In the United States today, the average young adult with student loan debt has a negative net worth.

#9 At this point, the average American household is nearly $140,000 in debt.

#10 Poverty rates in U.S. suburbs “have increased by 50 percent since 1990”.

#11 Almost 51 million U.S. households “can’t afford basics like rent and food”.

#12 The bottom 40 percent of all U.S. households bring home just 11.4 percent of all income.

#13 According to the Federal Reserve, 4 out of 10 Americans do not have enough money to cover an unexpected $400 expense without borrowing the money or selling something they own.

#14 22 percent of all Americans cannot pay all of their bills in a typical month.

This article originally appeared on The Economic Collapse Blog. About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

As The Wealthy Flock To The Major Cities On Both Coasts, Poverty And Suicide Soar In Rural Areas

America is increasingly becoming a divided nation. Those with money are flocking to the major cities on both coasts, while many of those that don’t are fleeing to rural areas. As a result, economic conditions can look vastly different depending on where you live. In large cities on the east and west coasts that have been heavily “gentrified”, it can seem like times have never been better. Alternatively, there are certain areas in rural America where it feels like we are in the midst of a horrifying economic depression that never seems to end. Some elitists derisively refer to the rural areas between the east and west coasts as “flyover country”, and they have little sympathy for the struggles of rural Americans. But those struggles are very real, and in this article you will see that poverty and suicide rates are soaring in non-urban parts of the country.

A new study that was just released contains some hard data about the “income sorting” that is going on nationwide. According to CBS News, the study found that those that are moving into expensive cities make much more money than those that are leaving, and conversely those that are moving into poorer cities make much less than those that are leaving for greener pastures…

America’s wealthy households are increasingly moving to coastal cities on both sides of the country, but those with more modest incomes are either relocating to or being pushed into the nation’s Rust Belt, according to a new study.

That’s creating “income sorting” across the country, with expensive cities like Los Angeles, New York and Seattle drawing wealthier residents. For instance, Americans who move to San Francisco earn nearly $13,000 more than those who move away, the study found. Conversely, those who are moving into less expensive inland cities such as Detroit or Pittsburgh earn up to $5,000 less than those who are leaving.

One of the consequences of this phenomenon is that real estate prices are wildly different depending on where you live. As wealthy people have steadily migrated into expensive cities such as New York and San Francisco, this has pushed housing prices into the stratosphere

The trend may not only hurt poorer residents who are forced out, but also the rich Americans who move to coastal cities. Well-off residents who move to already expensive cities like San Francisco are bidding up real estate prices until property becomes unaffordable for all but the very richest families. Many end up renting — until that, too, becomes unaffordable.

The California real estate bubble has reached dizzying heights in recent years. Earlier today, I came across an article about a rancher in Marin County that has reluctantly decided to sell his ranch, and he seemed quite sad about it.

So what made him decide to pull the trigger?

Well, the ranch that he once paid $40,000 for is now worth a cool 5 million dollars

Mark Pasternak is a Marin County-based rancher who produces specialty meat products for local shoppers and some of the toniest restaurants in the Bay Area. He bought his 75-acre Devil’s Gulch Ranch in western Marin County back in 1971 for $550 an acre and has been raising pigs, sheep, rabbits and poultry ever since. The farm is a fixture in the local community, so it shocked many when Pasternak announced the ranch is for sale.

He said he’s selling because of the jump in value. The land around his has already been snapped up by wealthy people for private ranches with large homes. The property Pasternak paid less than $40,000 for is now worth about $5 million.

Meanwhile, things continue to go from bad to worse in many rural parts of the country.

According to the U.S. Department of Agriculture, nearly one out of every four children in rural America is living in poverty

According to estimates by the U.S. Department of Agriculture, nearly a quarter of children growing up in rural America were poor in 2016, compared to slightly more than 20 percent in urban areas.

It was a southwestern state, Arizona, according to the report, that had the highest rural child rate of any state, with 36 percent.

Perhaps not surprisingly, the report found the highest concentrations of child poverty, overall, in the Mississippi Delta, Appalachia and on Native American reservations.

These days, most of the good jobs are concentrated in the major cities. Small businesses and family farms have traditionally been the lifeblood of rural communities, but our “modern economy” has not been kind to small businesses and family farms.

In rural America, times are tough, and that is one of the reasons why the suicide rate is much, much higher in rural areas than it is in the large cities. The following comes from CNN

The suicide rate in rural America is 45% greater than in large urban areas, according to a study released last fall by the US Centers for Disease Control and Prevention. A more recent CDC report said Montana’s suicide rate leads the nation, coming in at nearly twice the national average. A third long-touted CDC study, currently under review, listed farming in the occupational group, along with fishing and forestry, with the highest rate of suicide deaths.

That occupational study was based on 2012 data, when farming was strong and approaching its peak in 2013, says Jennifer Fahy, communications director for the nonprofit Farm Aid. Farmers’ net income has fallen 50% since 2013 and is expected to drop to a 12-year low this year, the US Department of Agriculture reports.

If things are this bad now, what will it be like when economic conditions really begin to deteriorate?

We live at a time when the gap between the wealthy and the poor is exploding, and this is putting a tremendous amount of strain on our society. At one time the wealthy lived in the “good parts” of our major cities and the poor lived in the “bad parts”, but now the poor are being completely forced out of our expensive cities on a massive scale.

It is most definitely a tale of two Americas, and I don’t think that it is going to have a happy ending.

This article originally appeared on The Economic Collapse Blog. About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Housing Crash 2.0? Experts Warn That ‘The U.S. Housing Market Looks Headed For Its Worst Slowdown In Years’

Is the United States heading for another absolutely devastating housing crash? It has been 10 years since the last one, and so many of the exact same signs that immediately preceded the last one are starting to appear once again. Back in 2007, home prices were absolutely soaring and it seemed like the party would never end. But interest rates went up, home sales slowed down substantially, and eventually prices began to crash. Millions upon millions of Americans were suddenly “underwater” in their homes just as a crippling recession hit the economy, and we plunged into a foreclosure crisis unlike anything that we had ever seen before. Well, now the cycle is happening again. Home prices surged to unprecedented heights in 2017, and this was especially true in the hottest markets on the east and west coasts. But now interest rates are going up and home sales are starting to slow down substantially. We certainly aren’t too far away from the next crash and another horrible foreclosure crisis, and many experts are beginning to sound the alarm.

For example, the following very alarming numbers come from a recent Bloomberg article entitled “The U.S. Housing Market Looks Headed for Its Worst Slowdown in Years”

Existing-home sales dropped in June for a third straight month. Purchases of new homes are at their slowest pace in eight months. Inventory, which plunged for years, has begun to grow again as buyers move to the sidelines, sapping the fuel for surging home values. Prices for existing homes climbed 6.4 percent in May, the smallest year-over-year gain since early 2017, and have gained the least over three months since 2012, according to the Federal Housing Finance Agency.

Those are definitely troubling figures, but perhaps even more disturbing is the fact that mortgage applications are way down right now

Mortgage applications to purchase both new and existing homes have been falling steadily, and mortgage rates are rising again. Single-family home construction also fell and was lower than June 2017.

Of course economic numbers always go up and down, and just because we have had a few bad months does not necessarily mean that disaster is looming.

But when you step back and take a broader perspective on the housing market, it really does start to feel like early 2008 all over again.

In fact, Nobel Prize-winning author Robert Shiller says that this “could be the very beginning of a turning point”

“This could be the very beginning of a turning point,” said Robert Shiller, a Nobel Prize-winning economist who is famed for warning of the dot-com and housing bubbles, in an interview.

Just like last time, the slowdown is being felt the most in the markets that were once the hottest. In southern California, home sales just fell to the lowest level in four years

Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.

And as I explained in a previous article, much of this drop is being fueled by a record decline in foreigners buying U.S. homes.

Meanwhile, red flags are popping up on the east coast as well. New York foreclosure actions have skyrocketed to an 11 year high, and many analysts expect them to go much higher.

If you follow my economics website on a regular basis, then you already know that I have been warning about a downturn in the housing market for months. As the Federal Reserve has raised interest rates, it was only a matter of time before the housing market really cooled off. And if the Federal Reserve keeps raising rates, we are going to see home prices collapse, another massive foreclosure crisis, and enormous stress on our largest financial institutions.

This is one of the reasons why we must abolish the Federal Reserve. By allowing a panel of central planners to determine our interest rates, it is inevitable that artificial “booms” and “busts” are created.

Yes, there are always “booms” and “busts” in a free market economy as well, but they would not be as severe.

In recent months, central banks all over the world have been tightening, and other global real estate markets are really starting to feel the pain as well. For instance, home prices are really cooling off in Canada, and it appears that they are on the precipice of a full-blown market crash.

When a new recession didn’t hit in 2015 or 2016, a lot of Americans assumed that the threat had passed. But just because a threat is delayed does not mean that it has been diminished. In fact, the coming recession is probably going to be substantially worse than it would have been in 2015 or 2016 because of the central bank manipulation that delayed it until this time.

And the signs are all around us. An indicator that tracks the vehicle buying plans of Americans just plunged to the lowest level in five years, and even USA Today is running articles with titles such as “Are you ready for the next recession? How to prepare now for a potential downturn”.

Yes, we just got good GDP data for the second quarter, but virtually everyone agrees that the number for the third quarter will be significantly lower. And it would be foolish to ignore all of the harbingers that are emerging on an almost daily basis now. Just recently, I explained that the U.S. economy has fallen into recession every single time that the yield curve has inverted since World War II, and now it is about to happen again. We live at a time when there is great turmoil at home and abroad, and the elements for a “perfect storm” are definitely coming together.

It is only a matter of time before the next recession begins, and it looks like it could be a really, really bad one.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

A 900 Square Foot Cottage In Palo Alto, California Was Just Listed For 2.6 Million Dollars

The craziest prices come just before the crash.

Is this a sign that the California housing bubble is about to burst?

If you’re looking for homes in Palo Alto, Calif., our sympathies to your bank account. In the most recent example of home prices gone bonkers, a two-bedroom, one-bathroom cottage has been listed for $2.6 million.

At 900 square feet, that means you’d be paying more than $2,800 per square foot — an eye-popping number more typical of a luxury penthouse in Manhattan than a suburban neighborhood. The cottage has a detached garage, but only outside basement access for the laundry room. There have not been any offers yet, though realtor Laura McCarthy says she had a number of showings.

Could you imagine paying that much money for just 900 square feet of space?

Suddenly, Home Sale Agreements Are Falling Apart Across the U.S.

Home For Sale - Public Domain

Spending months to find the perfect home in your price range, only to have your mortgage application rejected, or a home inspection turn up expensive repairs, is a nightmare—one that is coming true with increasing frequency, according to a new report from real estate listings website Trulia.

A Trulia analysis of U.S. listings shows that 3.9 percent of homes that moved from for-sale to pending moved back to for-sale again, nearly double the rate in 2015. Such “failed sales” increased in 96 of the 100 biggest U.S. metros, with big swings in areas large and small, rich and poor. That includes Los Angeles and Charleston, S.C., as well as San Jose and Akron, Ohio.

(Read the rest of the story here…)

The Housing Recovery Remains Cancelled Due To 6 Months Of Downward Revisions

Housing Crash

Following last month’s surge to record high home prices [4], it is perhaps no surprise that for the 6th month in a row, home prices have been revised lower. New Home Sales printed 438k, down from prior revised lower 445k and missing expectations of a surge to 460k… missing for 8 of the last 10 months. However, the key focus should be on the epic revisions of the (by now useless) home sales. For the period May – November, the initial new home sales prints amount to 2.779MM houses. Post revision, the number plunges by 22% to 2.168K. There goes the housing pillar of recovery (let’s hope economists are wrong and rates don’t rise next year eh?)

Spot the recovery…

(Read the rest of the story here…)

Housing Bubble 2.0 Has Popped

Bubbles Imploding - Public Domain
Yes, we have been in a housing bubble, in case you missed it. It started with the non-recovery post housing-crash in 2007. As foreclosures got sold, many people who had to foreclose or short sell were left with bad credit, lousy or no jobs and could not buy something else again.

What happened was that investors were paying all cash and buying up properties to rent out.

But, as the Fed pumped more money into the economy, prices rose and Housing Bubble 2.0 was created. Then this year it started to fracture and now-


Home prices crash 10% in one month!

For months, there have been signs that it  was at a peak and falling. See what has happened….

Housing Bubble 2.0 Has Popped

housing bubble popped

During the early stages of the last housing bubble in 2004, the concept of “home” transitioned from a place where people lived and thrived to a highly leveraged asset for speculators inebriated with optimism, an asset to be flipped ad infinitum with endless amounts of cheaply borrowed money. 

And for some, that had become the next American dream.

Housing Bubble 2.0 came into full bloom, but now it too has popped.


According to Wolf Street, “The quintessential ingredient in the stew that makes up a thriving housing market has been evaporating in America. Since the Fed has done its handiwork, institutional investors have driven up home prices and pushed them out of reach for many first-time buyers, and these potential first-time buyers are now renting homes from investors instead.

Given the high home prices, in many cases it may be a better deal. And apartments are often centrally located, rather than in some distant suburb, cutting transportation time and expenses, and allowing people to live where the urban excitement is. Millennials have figured it out too, as America is gradually converting to a country of renters.”

So in its inexorable manner, homeownership has continued to slide. This is what that relentless slide looks like:

Homeownership Rates at 1995 Levels

Under Age 35 First Time Homebuyers Has Dropped 7%

young adults living home chart



“Homeownership since 2008 dropped across all age groups.

But the largest drops occurred in the youngest age groups. In the under-35 age group, where first-time buyers are typically concentrated, home ownership has plunged from 41.3% in 2008 to 36.0%.”

These young people are forced to live at home, often not being able to find jobs that will even afford them a rental apartment.


Only Homes Over $1 Million Have Appreciated in Price

home prices



Despite low and skidding homeownership rates, home prices have been skyrocketing in recent years, and new home prices have reached ever more unaffordable all-time highs. 

investors stop buying real estate chart

Investors, all cash buyers and corporations, that constituted about 1/2 of all housing purchases in many areas, has died.


In addition, the following negative data points to a crash in the housing market:

Housing Prices Have Crashed 10% in One Month

Article authored by Carol Serpa. You can find the original story right here.

‘Broad-Based Deceleration’ – Case-Shiller Home Prices Tumble Most Since Nov 2011, 3rd Drop In A Row

House For Sale - Public Domain

For the 3rd month in a row, S&P Case-Shiller home prices fell MoM with July’s 0.5% drop the biggest since November 2011. This dragged the YoY growth to 6.75% (missing expectations of 7.4%) and its slowest rate of increase since November 2012. Non-seasonally-adjusted the drop is even larger (-0.6% MoM). Perhaps most notably San Francisco was the biggest drag on the index.

4th miss in a row for YoY home price gains and weakest growth since Nov 2012…

(Read the rest of the story here…)

Is Another Housing Crash Imminent?

Housing Crash

Real estate prices are predicted to fall between 15%-40% or more in the next 1 to 3 years

Mortgage applications have been falling steadily for over a year

pool-home-waterfallTypical Pool with Hot Tub in Florida Home During Housing Peak

Homebuilders may be optimistic on the housing front, but the rest of us shouldn’t be. It seems they always get ahead of themselves with optimism, and then end up holding the bag, like when the last crash happened.

In the few years leading up to 2007, I remember the plethora of new developments going up all around where I live in south Florida, with brightly-colored sales flags and dozens of beautifully decorated model homes in endless developments.

On the weekends, just for entertainment, I’d spend a whole afternoon looking through them, faking that I was a legitimate buyer. Elaborately decorated, the spectacle of these $300,000 to million dollar marvels was breathtaking, as I was garnering free home-decorating ideas.

With no expense spared, these homes were decorating fantasies; from breath-taking chandeliers to  gorgeous pools with elaborate waterfalls cascading over huge rock displays. As you ambled from one house to another,  even “fake” rocks outside piped upbeat music. It was a glorious time…

And then the crash hit – BOOM! Prices literally fell 50% or more, seemingly overnight. The nightmare of the housing crash which heralded in the Great Recession began. Now, some experts say another housing crash is looming.

Let’s explore that premise.

Young people, specifically millennials, are not buying homes. Simply put, they don’t have the money. Many are saddled with high student loan debts and they are experiencing much higher unemployment rates than the older baby boom generation.


Student Loan Debt Increases from 2005-2014

Because of their financial woes, 31% of 18-34 year-olds are forced to live with their parents. They are considered a key demographic for first-time home buyers. And it’s not that the rest of the population can afford a down payment either, because wages are down across the board.In addition, the following data points to a downturn in the housing market:

Percentage of Homes that Had to Drop Their Asking Price
During Peak Summer Month of July

Real estate prices are predicted to fall between 15%-40% or more in the next 1 to 3 years

Joshua Pollard, who in February 2005-2013, was Vice President of US Housing at Goldman Sachs, is so concerned, he has submitted a report to the President. (Not sure why he thinks he cares, but anyway…)

In his report released on September 17,  Pollard has forecasted an imminent 15% decline in home prices over the next three years. In the report he states,

“…we note that each 1% increase in mortgage rates drops home values by 4%.  At a 2% fed funds rate, where Fed officials and investors expect to be by the end of 2016,
today’s over-valuation of 12% grows to 20%.

House prices are 12% overvalued today. They have already started to decline.
Today’s mis-valuation matches the excess of 2006-07, just before the Great Recession. Respectfully, the United States can not afford another housing driven recession…
5 of the last 7 US recessions were led by a weakening housing market…
I am lamentably confident that home prices will fall by 15% within three years.”

And on another sour note, I present Harry Dent’s analysis. Dent writes an economic newsletter that reviews the economy in the US and around the world through demographic trends focusing on predictable consumer spending patterns, as well as financial markets, and has written nine books, of which two recent ones have been bestsellers.

“Don’t even think about buying a home (or worse an office) until at least early 2017.”

housing-bubblr

From his latest book The Demographic Cliff, Harry Dent says,

“In Chapter 3 of The Demographic Cliff, I explain why the housing market will never be the same in this post-bubble era. We’re approaching the point when there will be more sellers from the aging of the massive baby boom generation than younger buyers from the millennial generation that peak between age 37 and 41.

The numbers are similar to workforce growth where I subtract retirees from new tenants. For housing, I subtract the sellers at age 79 from the peak buyers at age 41 and then I can calculate “net” demand for housing for decades into the future.

Net demand has been falling since 2000, despite a slight bounce up in 2014. That small spike was almost in line with the slight rebound home prices had in 2012.

Once we slide into 2015, it will fall again and hit negative net demand from 2029 to 2039. Once there are literally more sellers than buyers, we won’t need any new homes built!

Housing should slow from 2015 forward — and economists are more confident than ever that we are in a sustainable recovery. The most affluent households also peak this year and will go off the “demographic cliff” like the average household did after 2007.

Once I describe a fall in real estate worse than the one that happened during the years of 1925-1933, I find it quite easy to talk younger households out of buying a home. But it is still proving difficult for me to talk older households out of buying a house.”

Principle #5 of bubbles (page 146, The Demographic Cliff) states:


“Bubbles tend to go back to where they started or a bit lower.
Real estate prices will fall at least 40% from where they are now.
Don’t even think about buying a home (or worse an office) until at least early 2017.
Let the coming stock crash and depression see its first and likely worst phase.”

So what’s all this talk about the great housing market? Yes, housing has recovered significantly since the housing crash of 2007, but is now poised for another similar crash, as all economic signs point towards a continuing economic decline.

If you are considering buying a home now, it is probably not a good move, unless it is a foreclosure or a short sale, and a REALLY good deal. If a crash occurs, housing prices could fall by 15%-40% or more in the next couple of years.

Article authored by Carol Serpa. You can find the original story right here.

Latest Housing Numbers Reveal Disturbing Trends

Home For Sale

There was much celebration regarding the jump in July housing starts and permits, which literally blew away Wall Street expectations, being the highest since November 2013.

So is this the housing recovery everyone’s been waiting for?


Sadly, no, because one glance at the internal numbers reveal
that virtually all of the surge higher was due to a big jump
in multi-family starts
.

In other words, building more rental apartments for a growing population that rents, and to house multi-generational families with young people in their 20s and 30s financially-forced to live with their parents. The increased housing starts are simply building a future for American renting serfs.
The disturbing and unmistakable trends are:

  • Home ownership is stagnant.
  • Americans are renting rather than buying, because they can’t afford to buy.
  • Millions of people are paying more than 50% of their income on rent
  • Young people, well into their 30s, are living with their parents, because they can’t find decent paying jobs that afford them to move out.

An analysis of the situation reveals a bleak situation for housing. First, let’s look at the  amount of young people forced into living with their parents. For the 25-34 year old age group, the percentage living with their parents over the past decade has almost doubled. This is no surprise, considering that in July young people ages 25-54 lost 142,000 jobs. No wonder 1 in 4 still lives with their parents.

Record Number of Young Adults Living With Parents

“Real estate tends to be a big plus for an economy when it happens organically with rising incomes, good overall employment prospects, and first time buyers leading the charge,” says the Dr. Housing Bubble Blog.”Builders realize there is pent up demand but not for expensive new homes. New demand is in the form of rentals, where little savings are required and incomes are less scrutinized. Multi-generational households being brought on by adults moving home is something that is very real”.

Picture

“The data is clear and most of these adults are living at home because they are financially strapped. These people are not in the market for purchasing a Barbie-sized pizza box, let alone venturing out to land a rental. However, should things improve and their incomes stabilize, the first step out will be into a rental. That is usually the normal trajectory.

It is an interesting case to see so many young adults living at home. All the data points to financial struggles. These people aren’t planning some creative backdoor arbitrage to leverage into an overpriced home.

No, most have no money for a rental let alone a home purchase. This is a nationwide trend. Yet builders are now realizing people need to live somewhere and living with mom and dad forever is not going to be a viable option for most (especially if you are still in dating mode). Building more rentals likely makes sense given the movement towards a permanent serfdom for many.”

If you think rising rental prices are coming because of big surges in income, think again. More Americans, to the tune of 11 million, are increasingly paying over 50% of their income for rent. Rising rental prices are due to increased demand, not that people can afford it. They must afford it, as they need a roof over their heads. The chart below shows that there is a 50% increase in the last decade of those who pay more than half their income on rent:


“Americans are simply spending more of their disposable income on rent and this likely has the consequence of hitting other areas of consumer spending (which we are seeing).
What is clear is that the nation continues down this road of housing feudalism and rentals are becoming an option for more Americans. “Even the National Association of Realtors realizes that household formation is critical to a healthy housing market:

“(NAR) More people should mean more housing demand. But that is not always the case. What really matters is household formation. One household can be one person living in a city apartment. One household can also mean a family of six living in a suburban home. Population growth therefore can be accompanied at times by no growth in households if a young adult moves in with a parent(s).

Currently, there are a record number of such cases. Such crowded living arrangements do not create housing demand.”

Picture


Household formation is what drives housing demand. Historically 1.2 to 1.4 million households were formed each year. Right now the rate is around 500,000 per year,
less than half of the historical norm.
People and families are living together because
they can’t afford to get a place of their own.

The population is going up but how does this help if a large part of it is coming from lower income workers?It should come as no surprise that first time buyers have been pummeled in this market:


Since 2005, we have added close to 7 million renter households. Home ownership has been virtually stagnant over this decade.  People forget that 7 million Americans lost their home to foreclosure.

“Since 2005, we have added close to 7 million renter households. Homeowner households have been virtually stagnant over this decade (of course you have one-off changes like someone losing their home to foreclosure and someone buying). Yet somehow, people forget that 7 million Americans lost their home to foreclosure since the bubble burst.”

With rental prices soaring, it is now likely a higher percentage of young people will live at home, since many are being priced out of rentals, let alone buying a home.

These are all disturbing trends for the housing market. This is what happens when you have a bleak, failing economy, such as we have in America.

Article authored by Carol Serpa. You can find the original story right here.

UK homeowners start to panic sell in the face of house price uncertainty

London Skyline - Public Domain

Panic selling is expected to sweep Britain as homeowners try to cash in on record high house prices before the market starts to cool, new data finds.

Sentiment towards selling is rising as fears grow that property values could reverse after a period of frenzied house price growth, according to the latest Halifax Housing Market Confidence Tracker.

Nearly 60pc of those polled by the lender believe they should sell within the next year, compared to 32pc.

This is the highest score of this measure since the survey’s inception.

The wave of sales have already started according to Halifax’s latest figures, as home sales during April to June were 21pc higher than in the same three months last year.

(Read the rest of the story here…)

Homeownership Rate for Americans Under 35 Is The Lowest Ever Recorded

Home For Sale

The homeownership rate for Americans under 35 years of age peaked in 2004 and has been trending generally (but not persistently) downward since then, according to data released this week by the Census Bureau.

In the second quarter of 2014, the rate of homeownership among householders who are under 35 dropped to the lowest number ever reported since the Census Bureau first started recording quarterly homeownership rates 21 years ago.

In a news release published this week, the Census Bureau said that the homeownership rate among householders under 35 was 35.9 percent in the second quarter of 2014. That number was not only lower than any quarterly rate going back to the fourth quarter of 1993 (the first quarterly rate reported) but was also lower than any of the annual homeownership rates for under 35s that the Census Bureau has published since 1982.

(Read the rest of the story here…)

Inside the Tiny House Movement where more and more Americans have rejected tradition for a simpler lifestyle

Tiny House In Portland, Oregon - Photo by Tammy

Once upon a time an American family’s home was their castle and the bigger the better, but growing concerns about meeting mortgage payments and the environmental impact of large houses has helped fuel a new movement of people who are happy to live small.

The Tiny House Movement is a growing group of people who are happy to downsize the space that they live in and enjoy simplified lives as a result.

While the average American home is around 2600 square feet, the typical small or tiny house is around 100-400 square feet.

(Read the rest of the story here…)

U.S. homeownership rate slides to lowest level since 1995

Home For Sale

The share of Americans who own their homes slipped again in the second quarter to its lowest level in nearly two decades.

Just 64.8% of U.S. homes are owner-occupied, the Commerce Department said Tuesday, down from 65% in the first quarter and the lowest count since the third quarter of 1995. The figures are adjusted to account for seasonal variations.

In Los Angeles and Orange counties, 49.1% of homes are owner-occupied. That’s the lowest rate of any big metropolitan area in the country.

Relatively high housing prices, tight credit standards and a still-soft job market are prompting more Americans to put off owning a home, housing economists say.

(Read the rest of the story here…)

Whoa: San Francisco median home price hits $1 million

San Francisco - Public Domain

If San Francisco needs a new name in the zany plan to create six Californias, they might as well call it “Millionaireville.”

According to DataQuick, the median home price in San Francisco in June hit the seven-figure mark for the first time. It was also the first time that any of the Bay Area-counties had hit the seven-figure median.

While good for sellers and brokers, the million-dollar mark is sure to fuel the growing class wars in the city over real estate. Many longtime renters are being displaced as values soar and rents jump. More traditional buyers are also being outbid by highly paid tech workers and overseas buyers who are paying all cash.

“It’s really hard to buy if you don’t have cash or 50 percent down and make an offer that is non-contingent,” real estate broker Cece Doricko told SFGate.

(Read the rest of the story here…)

Wealthy Chinese Are Buying Up Real Estate All Over America

China

Chinese buying was up more than 70% to $22 billion — nearly 1 in 4 dollars of all foreign purchases, according to the National Association of Realtors.

Canadians are actually No. 1 in terms of total homes bought, but the Chinese buy much more expensive homes: An average price of $591,000.

The Chinese also bring a lot of cash to the table: More than three-quarters of their purchases were all-cash buys.

California is the biggest market for the Chinese, accounting for a third of their purchases.

Washington State, however, is coming up quickly, accounting for 9% of buys. It’s followed by New York, Pennsylvania and Texas.

(Read the rest of the story here…)

Stick A Fork In Yet Another ‘Housing Recovery’: Starts Tumble, Multi-Family Permits Collapse Most Since Lehman

Housing Crash 2013

Blame it on the… spring?

Moments ago, in addition to reporting CPI numbers which showed that the Fed has already met and surpassed its 2.0% inflation target (credible or not), the Dept of HUD released Housing starts and Permits data for the month of May. It was, in a word, disappointing. It was so disappointing in fact, that both housing starts and permits not only missed expectations, but tumbled from the previous month by the most since January and the great “Polar Vortex” which was the kitchen sink used to explain the collapse in US GDP in Q1. Perhaps it was the early arrival of El Nino?

(Read the rest of the story here…)

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