Work with me people!

Depending on your role in this housing debacle, I think we see a bit of denial still (shockingly), a lot of fear (homebuilders, lenders, realtors), some desperation (foreclosures, bankruptcies) and the first scenes of true panic (Northern Rock savers, Fannie Mae investors)

But where would you say the majority of Americans are today?

It's been illuminating to follow this chart these past few years. It simply showed us when it came to the Housing Ponzi Scheme what was happening, and what was to come, no matter what realtors on commission wanted you to believe.

People ask me all the time "when will it be safe to buy a house again"?

The answer? When the majority are disgusted by real estate as an investment. When there's true capitulation and despondency. And of course, when you can buy a home and rent it out for positive cash flow. We're still not even close.

Come on! Work with me people! Fear has to be here by now, eh? Let's get this crash over already and move on.

As the CEPR pointed out in their housing crash report the other day, Americans will be best off if we get this housing crash over quickly, versus the 10+ years Japan wasted.

If home prices are simply "Marked to Market", the old prices and expectations thrown away, then we could move on.

Home would start selling again. Builders could eventually start building again. Losses would be known, retirees would be able to prepare, new home buyers wouldn't go bankrupt, and existing home debtors wouldn't go out spending money they don't really have.

Or we can do this the long and painful way.

So work with me, people of America. Your home isn't worth anywhere near what it would have sold for in 2005. The funny money days are over. "Liar's Loans" are no more. Housing speculation is dead for a generation. The Ponzi Scheme is over.

And your house is worth what it was in 2000, at best.

Now deal with it.

Here's the thinking from the CEPR on this:

It is worth noting that from the standpoint of current homeowners and prospective homebuyers a quick unraveling is more desirable than a gradual one, even if the macroeconomic consequences may be more severe.

If a homeowner has a house that will lose a substantial portion of its value over the near future, then she will be better situated to deal with this loss of wealth if it happens sooner rather than if it is delayed for a substantial period of time.

For example, if the homeowner is preparing for retirement, she would benefit from knowing sooner rather than later how much equity she can actually expect to have accumulated from her house. This would allow her to plan her savings, and possibly her retirement decision based on her actual wealth rather than wealth that is only a bubble illusion.

HousingPANIC Stupid Question of the Day

Gotta be Fear by now, eh? I know people are dumb, but they can't be THAT dumb, can they?

Stop denying Denial. It's Fear my friends. Fear.

HSBC moved $10 billion from the "denial" column straight to "capitulation" the other day.

The entire subprime industry, which fell off a cliff in the past few weeks, went from "euphoria" to "despondency" overnight it seems. And the contagion will spread. It always does during a the mania unwinding stage.

1.9 million American homes currently listed in foreclosure are in "desperation" stage.

2.2 million Americans who took out toxic loans and are expected to default, well, they've gotta be in "fear" stage now if they're paying attention.

Millions of REIC employees / contractors / commission hungry sharks are in "fear" stage today, wondering when the axe will fall, and how long they'll have to eat ramen.

The 2.1 million homedebtors with an empty home on the market and no buyers in sight have gotta be in some stage of "fear", "desperation" and yes, "panic" today.

One would-be real estate mogul who is now selling off his portfolio of failure and days away from bankruptcy and a knock from the FBI, well, even he's evidently moving past denial lately.

HP'ers, you'd have to be insane, clueless, corrupt, stupid and seriously the greatest fool on earth if you're still in "euphoria" or "anxiety" stage. Man, the train left the station, a long, long time ago. When will Americans (and the world) finally get on board? Or are they?