By Tom Townsend
As the numbers continue to stack up in the never ending saga, it is interesting to be able to obtain a comparative analysis of just how big the entire U.S Mortgage crisis is ? Unless you you recall previous word events and add them into the mix you really have no idea of the entire current and potential impact to the overall economy.
Last week on a trip to California, I read a rather lengthy article in the WSJ that really puts this entire issue into perspective.
In a simple explanation you can say that that the current status rival the Savings & Loan meltdown back-in the late 80’s and early 90’s. The ultimate extent of the crisis will depend on how steep the values in America homes fall over the course of the next 6 months when added to ARM resets and additional foreclosures.
When you look at this purely from a dollars stand point, it has the potential to really put a dent in the overall U.S and World Economies when you compare it to say our GDP (Gross Domestic Product).
I broke down the article statistics into the the two charts you see here. This really gives you a better idea of the situation. From a purely dollars sense, at present we are better off then the Savings & Loan fiasco and the Japanese meltdown back in the ate 90’s. The over all impact to to our GDP should we end up in the worst case scenario losses upwards of $400 Billion into late 2008, we would still fare a skosh better than the S&L and much better then Japan did with shier Banking issues.
While the Florida Tampa Bay Area Housing Market continues to have it’s share of problems, I was surprised to see just how bad the California Real Estate markets really were. I am working on another post for later in the week that covers my trip and some thoughts on the East Coast vs. West Coast Housing markets.
DISCLAIMER: Since the Wall Street Journal requires a subscription to read the entire article I searched and found an alternate location. The site that I am linking to here is just for the WSJ article content: U.S. Mortgage Crisis Rivals S&L Meltdown. It appears to be a site with an Agenda and I don’t condone the site message or anything else that might be on the site.
Related Posts:
;)
;)
Wow! This is a great post! Thank you for doing the work that I'm sure that it took! To me, the problem isn't the housing market, it's fixing the credit markets. Which our current administration seems to be hesitant to do.
They need to stop trying to fix this from the top down and instead work it the other way. Stabilize the people in danger of losing their homes and you stabilize the housing markets!
Bob Mitchell
ValueList Real Estate Services, Inc.