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View Diary: Housing Crisis, Potential Recession Loom Large in Battleground States (174 comments)

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  •  There is a lag in the numbers (1+ / 0-)
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    irishwitch

    since many of the banks are working with some homeowners now that they have discovered that they would have to discount the homes they have already taken and cannot sell.  The banks have no desire to be in the real estate business and see it as a distraction.
    Once the banks accept that they will have to eat their losses, the real hit will become evident. If I remember correctly, in the 1980s, Midwest farmland was bid up to $3500 to $4000 an acre, only to fall back to $1200 an acre when the institutional investors realized that they had tied up a lot of their liquidity in a nonliquid investment and also figured out that they had purchased at the top of the cycle.

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