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Housing sales way down, with real estate recovery remains in financial crisis

Dave Masko's picture

NEWPORT, Ore. – Springtime home rentals and sales are in financial crisis here in Newport “like the rest of the country” as weary Americans ask what’s happening; meanwhile, the final report of the “National Commission on the Causes of the Financial and Economic Crisis in the United States” answers “it’s due to inflated housing values," while continued weak housing sales and rising foreclosures drive the cost of home prices to “their lowest level in nearly nine years,” states the National Association of Realtors.

When Congress and President Obama created the “Financial Crisis Inquiry Commission” to investigate the causes of the most devastating financial and economic crisis since the Great Depression, they should have talked to Newport real estate investor Arnold G. Hansen who said in a recent interview that “tenseness and fear is stopping Americans from buying homes due to the government bailing out Wall Street and the auto industry and not taking care of the small investors who’ve taken a bath due to inflated housing prices over the past decade.” Hansen also noted that he’s not surprised that the National Commission found “greed” as the key reason why the recession happened and continues.

American bankers greed still killing housing market, states Commission

The National Commission disclosed “reasons” why the country’s housing industry is teetering on the edge with no relief in sight. The Commission found:

-- “Widespread failures in financial regulation, including the Federal Reserve’s failure to stem the tide of toxic mortgages.”

-- “Dramatic breakdowns in corporate governance, including too many mortgage bankers acting recklessly and taking on too much risk.”

-- “An explosive mix of excessive borrowing, and risk by households and Wall Steet that put the financial system on a collision course with crisis.”

-- “Systemic breaches in accountability and ethics at all levels.”

Gluttonous investors and double-dealing bankers were in the housing “rip-off” business

“You look at Wall Street and all the banks that got bailed out by Presidents Bush and Obama, and you think why didn’t more people go to jail for screwing the American public in such a very bad way,” adds Hansen who’s real estate holdings along Newport’s beach front is teetering on financial collapse.

Moreover, the National Commission report noted how the housing crisis was “the result of human action and inaction, not of Mother Nature or computer models going haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand and manage evolving risks within a system essential to the well-being of the American public.”

“The Financial Crisis Inquiry Report, the Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States” was released this week in book form, and is available free at local libraries.

Also chilling, the National Commission report notes that the recession and the national housing crisis was “avoidable, and a result of human actions, inactions and misjudgments. Warnings were ignored.”

The Commission also determined that “The greatest tragedy would be to accept the refrain that no one could have seen this coming, and thus nothing could have been done. If we accept this notion, it will happen again.”

Oregon and other states suffering due to nobody buying houses

Meanwhile, Americans continue to drive Oregon’s timber industry into deeper recession due to fewer home starts needing lumber and other building materials, and poor “recession era” home sales are not helping with record-setting foreclosures here in Newport where wealthy bankers, lawyers, doctors and other professionals – who own massive beach-front homes and property – are pulling the plug and trying to sell.

“It’s sort of a game for the rich ones, like the doctors from nearby Salem and Eugene who view their beach homes like so many nickels and dimes in your pocket that they want to spend or play around with. These rich ones aren’t getting hurt, but the little guy is over and over,” explains Hansen who claims the real estate market along the Oregon coast has been the worst he’s ever seen in 20 years of selling real estate here.

“You would think we could blame it on the Tsunami or something, but it’s people who are so weary of this recession that are not buying homes right now,” he said.

Home sales worst in nearly 10 years, with no sign of growth in 2011

The National Association of Realtors said home sales in February were “down 9.6 percent from 5.4 million in January.” The Association also noted that the number of foreclosures is in the tens of millions over the past few years and “record numbers of foreclosures are expected in 2011.”

The Association also reported this week that “tight credit” is making the task of getting a mortgage for regular Americans very difficult, if not almost impossible in this very weak economy.

Moreover, record high employment – that’s over 20 percent in many Oregon coastal communities – is also a key factor as to why American are not buying homes right now.

Also, local condo sales in the trendy Nye Beach area of Newport are “almost non-existent” said one local realtor who point to a national drop in condominium sales “of more than 10 percent for about 620,000 condos sold nationwide since the start of 2011.”

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