The economic bad news is not all reflected in current real estate prices in the US.
Prices are already down from between 30% to 50% in certain areas. Are further falls likely? You bet they are!
Household income is going down fast and it is already at 1990 levels. The unemployment rate for the young is at 20% - near the Great Depression level. As a result young people are staying with their parents rather than setting up new households.
As Bill Bonner says in Money Week "The Great Correction is far from over. We're expecting a long period of stagflation, depression and de-leveraging.
Prices don't go up in a credit contraction they go down. Could we be witnessing the start of a long trend that takes US prices down another 50%."
Is it really that different in the UK?
