Foreclosure Auctions Signal That an End to the Foreclosure Crisis Is Nowhere in Sight

The foreclosure crisis is continuing and according to some experts — and a bit of hard evidence — there’s no end in sight; at least not yet. This runs contrary to what you may be reading in the newspapers every day, ie, the spate of good economic news coming from Wall Street. According to the 4/20 CNN.com article, Recession is easing - Fed vice chairman, “The deep U.S. economic recession is showing signs of letting up and of ending later this year . . . ”

Foreclosure Auctions Signal Crisis Is Nowhere Near the End

But, Wall Street recovers miuch faster than the rest of the economy. And if the foreclosure auctions that are taking place around the country are any indication, the foreclosure crisis is in a self-perpetuating cycle, as explained in The New York Times article, For Housing Crisis, the End Probably Isn’t Near, ie:

The glut of foreclosed homes creates a self-reinforcing cycle. Falling prices lead to more foreclosures. Foreclosures lead to an excess supply of homes for sale. The excess supply then leads to further price declines. Jan Hatzius, the chief economist at Goldman Sachs, says that the “massive amount of excess supply” means that home prices nationwide will probably fall an additional 15 percent.

When Will the Foreclosure Crisis End?

As discussed in the article here, An End to the Foreclosure Crisis? 4 Key Indicators That Signal It’s Over we have a ways to go before the foreclosure crisis ends simply because job losses are stilll mounting, banks have tightened lending practices and consumers are hoarding money.

Until these factors turn around, the foreclosure crisis may continue in the “dog chasing its tail” spin cycle.

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