Friday, September 02, 2011

The $4 Trillion Dollar Question | The Big Picture

The $4 Trillion Dollar Question | The Big Picture
This analysis is by Dhaval Joshi, a financial analyst, reprinted on Barry Ritholtz's blog (highly recommended). It appeared in June 2010 but I just ran across it. Here's the lead:

"Can the US economy really return to “business as usual” when it has 4 million houses surplus to requirement, when 1 out of 4 mortgages are in negative equity, and when by our calculation, it is burdened with $4 trillion of excess mortgage debt, equivalent to 30% of GDP?"


Fred Pilot said...

Of course the US economy can recover despite the drag of the housing market. It can do so by finding other means of creating and measuring wealth other than housing. It's called economic diversification.

Anonymous said...

Well part of the problem will also be resolved/alleviated by the fact that much of the HOA property has become undesirable and therefore unmarketable because of the very existence of the HOA. It would be nice to know how many of the 4 million homes mentioned in the articles have that undesirable attribute of being burdened by an HOA corporation.

Now when you realize that many of them won't sell, you'll realize that the surplus has been over-estimated. The government should raze those houses just as they are doing in other parts of the country.