The housing market is entering ‘a mini ice age’, with anybody who bought between 2006 and 2008 among the biggest losers, a top firm of accountants has claimed.

It warns Britain’s 18million homeowners that prices may not recover to their peak levels for more than a decade.

The report, from Pricewaterhouse Coopers, says there is a ‘near 50 per cent chance’ that prices will still be underwater in 2020, when adjusted for inflation.

At the price peak in 2007 the cost of the average property was just under £200,000.

But the same home is currently worth £160,000, a fall of £40,000, equal to 20 per cent of the property’s value at the peak.

John Hawksworth, chief economist at PWC, said: ‘There is a near 50 per cent chance that real house prices in 2020 could be below 2007 levels.’

He blames the housing crisis on a long list of woes, from the battle to get a mortgage to the poor pay rises or pay freezes being given to workers.

In a warning to homeowners worried about the value of their house, he said: ‘It is likely to be a long and bumpy road to full recovery.’

The PWC report, published today, also lists the ‘losers’, if its bleak prediction about the housing market is correct.

The worst-hit will be people who bought ‘at or close to the top of the market’, that is between 2006 and 2008.

Many will be in negative equity because they took out a massive mortgage to buy the property, possibly 125 per cent of the property’s value, but it is now worth less than the size of their loan.

Other ‘losers’ will be people who want to move to London or the rest of the South East from elsewhere in Britain.

This is because prices continue to rise in London, unlike any other region, which means the capital is becoming increasingly unaffordable for those who live elsewhere but want to move.

It comes as a separate report, from the Royal Institution of Chartered Surveyors, also warned of the country’s ‘depressed’ property market.

One estate agent, from Bridlington, East Yorkshire, said: ‘I have seen the ups and downs of the property market over the past 40 years.

‘But this is the longest and deepest I have experienced and I still cannot see any improvement for the next couple of years.’

RICS said the typical estate agent is selling just one property a week, which is locking people into homes which they are desperate to sell.

Another agent, from Hampshire, said buyers are ‘very price conscious’ and offering ‘five to 10 per cent below even reasonable asking prices.’

The nightmare facing first-time buyers is one of the biggest problems facing the housing market, according to PWC.

The Council of Mortgage Lenders said yesterday a young person is typically force to put down a deposit worth 20 per cent of the purchase price.

Before the credit crunch struck in 2007, the average deposit of a first-time buyer was just 10 per cent.

Nicholas Leeming, business development director of Zoopla.co.uk, the property website, warned the housing market will ‘remain in the doldrums’ unless the mortgage freeze stops.

Peter Rollings, chief executive of the estate agents Marsh & Parsons,  said: ‘The reality is that getting a mortgage remains an uphill battle for the average first-time buyer.’

The PWC report is based on ‘real’ house prices, which means it is looking at house prices after stripping out the impact of inflation.

Overall, it predicts ‘real’ house prices will rise just one per cent between 2007 and 2020.

Source.

We are not going to go into the lured details regarding residential and commercial real estate, but we are going to give you some highlights. We began telling subscribers to sell real estate in June of 2005, long before anyone else. We picked the top just as we did in September 1988 at the top.

Residential real estate won’t hit bottom until 2013 and who knows how long it will bump along the bottom. At the end of the year we have a whole new generation of sub prime and ALT-A mortgages coming due for reset. In addition there are the pick and pay loans that are in trouble, and 52% of problems lie, if you can believe it, in prime loans. Residential real estate countrywide is off 32% with a number of areas off 50% or more. In the next two years that national figure will show losses of 45% to 50%, and the former 30 hot city markets will be off 50% to 70%. We predicted this in November of 2004. All the savings of America for three generations of Americans will be lost, and these same Americans will be saddled with horrendous amounts of debt spawned by our Wall Street controlled Treasury and the Federal Reserve. These are the bankers who have robbed you and will continue to rob you until you are destitute and enslaved.

Over the next four years $1.5 trillion or more in commercial real estate loans will come due. About 50% are in deep trouble. From the top in 2007 their values are off 35% to 40%, so they only have 30% to 35% to go. Losses could be as high as $700 billion. The fallout will affect all banks big and small. The reality of losses will be devastating.

Lenders, mostly banks, already broke, are going to get hit very hard and many will go under. All debt in real estate is in serious trouble. That is why we believe more than 2,000 banks will go out of business over the next 1-1/2% to 2 years. That is why you should have no CDs and only three months expenses in the bank for operating and 6 months for businesses. That money should be in gold and silver related assets.

The only word to describe what has been and is continuing to happen in real estate is catastrophic. By way of comparison the losses in the Lehman collapse were piddling. If you include the derivatives it was about $775 billion. In real estate we are talking trillions. The result was that stock markets lost between 10% and 50% of their value after Lehman collapsed. Irrespective of stimulus, government and Fed loans and bogus earnings, once the effect of losses are realized, the Dow will again test 6,500 to 6,600 and in all likelihood break that level and fall to 4,000 to 4,500, with probably some way to go on the downside. The Lehman and Bear Stearns affairs forced the Treasury and the Fed to feed $12.7 trillion directly into the system with a total commitment of $23.7 trillion says our US inspector general. Not only did the US provide a rescue but so did members of the G-20, all of which are presently trying to withdraw the stimulus that kept deflationary depression at bay. The financial elites, particularly of London and NYC, have been temporarily saved, but that game is not over yet. The withdrawal of trillions of dollars from the world economy will collapse it and the Illuminists are well aware of that. The goal has always been the pauperization of the multitudes worldwide in order to implement world government and the new world order. The enslavement of mankind. That is what this is all about and you had best come to grips with what they intend to do. These people have bankrupted almost every country in the world in this deliberate process. That is why sovereign debt is the next area they have zeroed in on as one of the last main cogs of stability to be destroyed along with the devaluation of most currencies.

That brings us to the deliberate destruction of Greece. No one involved didn’t know that Greece and Italy presented bogus numbers to qualify for the eurozone some ten years ago, but they all looked the other way. Greece has been the leader in the global shipping industry and so has suffered as global trade has fallen. It has killed their balance of payments. The drop in tourism has also badly hit their economy. This is their part of the price to be paid for the phony war on terrorism. The elitists found Greece to be easy prey along with hedge funds and the likes of Goldman, Morgan and Citi. Their moves set up the initial stages for what will be the deflationary takedown of the world economy financially and economically.

Greece’s debt to GDP is estimated to be 120%, far worse than Russia’s debt when they defaulted 12 years ago – some $430 billion. German banks hold a great deal of the debt for not only Greece, but for Spain, Ireland and Portugal, some $700 billion worth. As you know all of these countries are in trouble financially, as well as England, which will sell more than $300 billion in bonds this year, all of which will be monetized. This will create more British inflation to be added to the current 3.5% official inflation now in place. Real inflation is double that and it is going to get much worse. It is no wonder British interest rates are 1% higher than German rates. Last year the Bank of England monetized almost all the liquidity they injected into the British market. As the year wears on liquidity will get tighter as borrowed liquidity is to be returned to lenders. For all eurozone banks that number is about $600 billion, which came from the Fed, although they won’t admit it. This is one of the main reasons Ron Paul wants to audit the Fed. That is to expose the Fed’s illegal role in US foreign policy. The weakness in the pound, as we pointed out in previous issues, along with the dollar and other currencies, has lost 2/3’s of its purchasing power, as we pointed out again and again for 6-1/2 years.  That measurement is versus gold. How much longer do you believe others will hold pound, euro and US dollar paper, not long? Dollar Forex holdings have dropped from 64.5% to 60 ¾% in just the last year. Global monetary and fiscal problems worsen every day and there is no end in sight. We know there is something very big underway when Warren Buffett, who’s firm recently paid a $100 million fine for accounting fraud is dragged out frequently to tell the people things are going to get lots worse. Charlie Munger said the same thing last week as further warnings are fed to the public.

Germany is playing a key role in all of this, particularly in Europe. Germany never saw a bubble in its stock market nor in its housing market. Germans have been frugal doing what any sane society should have done. They never had cheap credit, soaring salaries or big government goodies like those countries on the edge; Greece, Spain, Ireland, Portugal and Italy. It must be said though that part of German success was exporting to theses bubble countries. The cry now from purchased economists is Germany must buy in order for the rest of Europe to economically survive. Others are envious of Germany’s trade surplus, which is the second largest in the world after Saudi Arabia. That surplus is what is used by the rest of the eurozone nations to stay solvent. Definitely a 2-edged sword. Is it any wonder 67% of Germans have for 11 years wanted to dump the euro. Germany was forced to take on Greece and Italy knowing they did not qualify and Ireland was subsidized into the zone and should have never been allowed to join. Germany is being penalized holding down salaries to the point of stagnation and cost cutting, whereas the other players simply ran economically and fiscally wild. Germany will not join the culture of debt and cannot be expected to pay for others profligacy.

In a recent poll German banks said they will not buy more Greek sovereign debt. Greeks are demonstrating in the streets because the party is over and they want it to continue forever. Greece’s problems are somewhat similar to those of the states in the US. An economic depression, large budget deficits and giant falls in revenues. Costs have to be cut and people have to be laid off. Like in Greece, California, New York, Pennsylvania, New Jersey and other states are running out of money. Greece wants Germany to help and now 67 years after the war wants its gold returned, some $70 billion. Germany couldn’t deliver the gold if it wanted too, because the US refuses to return their gold, probably because they secretly sold it to suppress gold prices. At the same time the states in the US are selling municipal bonds like mad to stay afloat with yields of only 3%. The problem is we have an unsound credit system. Last year the Fed bought 80% of Treasury debt and monetized it. In addition, they bought $1.2 trillion in MBS and Agencies at least half of which was monetized. The system in the eurozone and in the US is impaired and nothing is being done to fix it. It’s one band-aid after another. All these nations can think of is reflation. The wrong path and example still exists. Trillions in deficits as far as the eye can see to underpin the stock and bond markets and make it appear that there is economic recovery, when in fact the world is going deeper into the hole. The stability of asset prices, incomes and corporate cash flow and revenues for government are a mirage. It is a classic Ponzi scheme.

This past week the Dow declined 0.7%; S&P fell 0.4%; the Russell 2000 fell 0.5% and the Nasdaq 100 fell 0.3%. Banks rose 1.7%; broker/dealers lost 0.7%; cyclicals dipped 0.4% and transports rose 1.8%. Consumers fell 0.4%; utililties 2.5%; high tech 1.0%; semis 1.4% and Internets 1.2%; biotechs rose 1.5%. Gold bullion fell about $3.00 and the HUI lost 1.6%. The USDX fell 0.4% to 80.31.

Two year T-bills fell 14 bps to 0.73%, the 10-year T-notes fell 16 bps to 3.62% and the 10-year German bunds fell 18 bps to 3.10%.

The Dubai government stirred up markets this week by its decision to delay the debt payments which its flagship holding company and corporate biggie, Dubai World owes. The company is under heavy debts tallying up to tens of billions that were used to fund the real-estate projects from the Middle East to Las Vegas. The surprising move has come at a time when many economic indicators, including oil prices, were showing positive signs.

The debt crisis in Dubai is raising a new fear amongst investors throughout the world- that of a potential government default by nations which are heavily indebted. Investors feared on Friday that this move by the Dubai government would bring the global markets into the same kind of chaos which was witnessed in the early part of this year. But while losses were reported in Asia, the markets began to get stable as the trading day progressed in Europe and the U.S. The European stocks finished higher by 1.2% and the Dow Jones Industrial Average closed just 1.5% lower by the end of Friday.

The effect was felt deeper in the sovereign-bond market. On the concern that emerging-market nations might have difficulty in paying back their debts despite the global economy coming out of recession, the cost of insuring against defaults rose in Turkey, Bulgaria, Russia, Brazil, Mexico and Hungary.

According to investors, an Islamic bond, sukuk, issued by one of Dubai world’s subsidiaries, fell to 57 cents on Friday from 110 cents on Wednesday. Dubai’s troubles are not limited to the Middle East, and have raised concerns over the ability of Greece and Hungary to pay off their debts.

The credit derivates market also highlights the concern over the creditworthiness of the governments, as investors are insuring themselves against bond defaults by paying prices which are much higher.

Dubai’s example shows how quickly countries can slide off the path to recovery and land into trouble. According to analysts, it would take years for the Dubai real estate market to come back to levels as high as they were in 2008.

The investment and spending spree reached its peak in 2008 when oil reached $140 a barrel. But, the slide towards Wednesday’s standstill had begun later that year by the time of Dubai’s biggest bash at the opening of a hotel on the man-made Palm Island. Since then, international players started to bow out of Dubai’s property market, prices descended, projects began being cancelled, and government and private developers began shedding workers and stopped bill payments.

Via Global Crisis News.

The National Inflation Association is pleased to announce that its first ever documentary, Hyperinflation Nation, surpassed 25,000 views on YouTube within 36 hours of its release and is currently the third top news video of the day.

Hyperinflation Nation features Peter Schiff, Ron Paul, Jim Rogers, Tom Woods and Gerald Celente; and is dedicated to preparing Americans for hyperinflation. The documentary shows how Federal Reserve Chairman Ben Bernanke was wrong about the Real Estate and automobile markets; and how the Federal Reserve’s monetary policy could lead to the destruction of the U.S. dollar.

Hyperinflation Nation goes into detail about the gold, silver and agriculture markets, and explains how they could become the new boom industries of the next decade.

Watch the documentary now:

PART 1

PART 2

PART 3

From CNN Money:

More than 20% of American homeowners owe more on their mortgage debt than they can sell their homes for, according to an industry report released Wednesday.

The real estate Web site Zillow.com reported that 21.8% of all U.S. homes, representing more than 20 million residences, were in a “negative equity” or “underwater” position after prices dropped more than 14% nationally in the year ended March 31.

“A combination of falling prices and low down payments has left many borrowers underwater,” said Stan Humphries, Zillow’s vice president in charge of data and analytics. “In some markets, more than half of all homes are in negative equity.”

No “glimmers of hope” there…

A vast “shadow inventory” of foreclosed homes that banks are holding off the market could wreak havoc with the already battered real estate sector, industry observers say.

Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.

“We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market,” said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. “California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.”

In a recent study, RealtyTrac compared its database of bank-repossessed homes to MLS listings of for-sale homes in four states, including California. It found a significant disparity – only 30 percent of the foreclosures were listed for sale in the Multiple Listing Service. The remainder is known in the industry as “shadow inventory.”

“There is a real danger that there is much more (foreclosure) inventory than we are measuring,” said Celia Chen, director of housing economics at Moody’s Economy.com in Pennsylvania. “Eventually those homes will have to be dealt with. If they’re all put on the market, that will add more inventory to an already bloated market and drive down home prices even more.”

More than one-third locally

In the Bay Area, a Chronicle analysis of data from San Diego’s MDA DataQuick shows that more than one-third of foreclosures are in shadow territory – that is, they are not registering in county records as having been resold.

For the 26 months from January 2007 through February 2009, banks repossessed 51,602 homes and condos in the nine-county Bay Area, according to DataQuick. Yet in the same period, only 30,823 foreclosures were resold, leaving about 20,000 bank repos unaccounted for.

Turnaround usually quick

Realtors say foreclosures generally go on the market a month or two after the bank takes title and then sell fairly quickly, often getting an accepted offer within a week or two of being listed and then closing escrow within 30 days. That means that foreclosures should register as being resold within three months.

But taking the foreclosures in any given month or selection of months and looking at what happened three months later also reveals a big gap between what banks took back and what they resold.

Tom Kelly, a spokesman for banking giant Chase in Chicago, said the bank sells foreclosed homes in a timely fashion.

“We try not to be in the business of owning homes,” he said. “Our goal is to get them back on the market as quickly as possible. We want to maximize what we sell them for and yet do it quickly.”

Kelly was at a loss to explain the shadow inventory phenomenon other than the quantities involved.

“The inventory might be growing because there is just a lot of volume coming in. That would not surprise me,” he said.

Locally, the monthly number of foreclosures has decreased since peaking at 4,321 in August 2007. That has allowed foreclosure resales to start closing the gap.

Most observers say the recent fall-off in foreclosures came because California and many banks implemented foreclosure moratoriums in the fall, not because the problem has diminished.

Only 65.5 percent resold

A second DataQuick study of all Bay Area homes repossessed by banks in the 18 months ending January 2009 tracked how many of those homes had resold by mid-March. It found that 65.5 percent had resold. Discovery Bay’s ForeclosureRadar.com compared its database of Bay Area foreclosures to MLS listings for the past 120 days and found that fewer than one-fifth of the foreclosures showed up as for-sale listings.

“Foreclosure numbers are artificially depressed,” said CEO Sean O’Toole. He puts California’s shadow inventory at about 100,000 homes.

So why aren’t banks selling off their foreclosures?

Observers say several factors are at work.

– The “pig in the python”: Digesting all those foreclosures takes awhile. It’s time-consuming to get a home vacant, clean and ready for sale. “The system is overwhelmed by the volume,” Sharga said. “In a normal market, there are 160,000 (foreclosures for sale nationwide) over the course of a year. Right now, there are about 80,000 every month.”

– Accounting sleight-of-hand: Lenders could be deferring sales to put off having to acknowledge the actual extent of their loss. “With banks in the stress they’re in, I don’t think they’re anxious to show losses in assets on their balance sheets,” O’Toole said.

– Slowing the free-fall: Banks might be strategically holding back some foreclosures so prices don’t fall as fast. “They want to be careful about not releasing them too quickly so they don’t drive prices down and hurt the values,” O’Toole said.

Read the full article on The San Francisco Chronicle.