Housing Bodes Ill

Well, Mama's good mood didn't last, did it? Here's what my friend, the ray of sunshine, is saying today:

Part of the problem is that foreclosures and forced sales due to impending default and foreclosures are now pushing way more homes on the market. Absolutely every bit of objective evidence seems to show that more and more homes are due to be forced back on the market by resets and recasts for several years. It is mind-boggling to contemplate the situation. We have a sharply reduced pool of buyers due to tightened underwriting and appraisal standards, combined with rapidly growing supply. If no new home were built in the US for a year, market supply would probably continue to rise for the entire year just because of the number of individuals who must sell their homes. We are also in the early stages of recession....

Both condo and single-family sales patterns show that the market in the NE is actually recovering somewhat, and that the market in the South has taken another downturn, while the West is tanking to a historic degree.

Given these conditions, many homes in the West are likely to lose about 35% of their value from the peak. The situation depends on neighborhoods. The worst losses will be seen in the recently developed areas and neighborhoods, whereas the areas with older housing will hold their values better.

In another post she shares her concerns about how Americans will act during a coming economic crunch:

History shows patterns of economic distress in human populations which produce social distress, upheaval and often a targeting of foreign groups within a country. The irrationalism of Communist and other forms of "right-thinking" are reemerging in the right and conservative groups now. This is not a favorable social development, because the US is moving into bad economic times and certainly will continue to deal with problems and attacks from radical Muslims.

This concern has bothered me for some time. We do not live in a pre-Depression America. The notion of stealing if you were poor was not the dominating mentality. People were, on the whole, far more church-going, community-spirited and moral. My husband's great-grandfather literally gave away the store. My grandma's family and farm fed any hungry person who stopped by.

Will ConAgra feed the suffering hoards? Are there enough community farms to feed the hungry should the bottom drop out? Would the suffering lash out? What kind of social unrest nips at the heels of a serious economic down turn?

We are a fat and complacent country. While people here are good and generous, I worry about prolonged and chronic economic stress.