The following information sounds ominous. Do you suppose anyone up in Washington cares?
A U.S. Labor Department study shows that down at the middle and lower ends of the wage scale - where people often drive pick-ups - real earnings have gone nowhere since 1979. Median wage earners realized a total gain over the entire quarter century of just 2.3%. Low wage earners lost 3.7%. While the picture is dark at the center and below decks, the upper berths on this vessel have enjoyed sunshine and smooth sailing - with real earnings up 20.3% since 1979.
“Meanwhile, local homeowners say it’s a bleak housing market these days, even with some price slashing going by some motivated sellers.
‘We have an oversupply of houses and few buyers out there, for whatever reasons.’“‘The experienced agents are telling me this is one of the worst markets they’ve seen,’ remarked Sue Kappel, who has operated since 1972.
From the East Coast, we get word that the housing market around Washington, D.C., once one of the hottest, is cooling off fast.
The anecdotal evidence is not too thin to conclude that the housing market is not just liable to a mild 5% decline, which would wipe $1 trillion from household wealth. Rather, it is likely to see a full-scale retreat, in which the bids disappear altogether. Some experts are predicting as much as a 20% to 40% collapse in prices, which would be as much as $8 trillion in “wealth” knocked off homeowners’ balance sheets.
On to those poor people who are no longer homeowners! The foreclosure rate is climbing; now, one out of every 1,245 households is in foreclosure. But we note that that still leaves plenty of room for growth.