Haha. An expert in the American residential real estate market? I bet you don't know very much. Haha.
Never claimed I was. But any idiot can see what went wrong in the US, Ireland, UK, Spain and many other places.
People were warning about the housing bubble for years and years but no one did anything about it because the banks and financial institutions were earning trillions on selling and reselling financial products that had the US mortgage market at its core. And as long as the housing market was going up up and up then there was no reason to pull the brake because people were greedy and getting rich.
When reality finally settled back into the US housing market and prices started to fall and banks realized that more and more of the financial assets they had been peddling to people around the world and making a killing off.. were in fact worthless, then you had the start of the financial crisis.
It does not take any "expertise" to understand when a large number of home owners for a decade plus re-mortgaged and re-mortgaged because their homes value went up and up and up, and then used that extra income to consume and driving the US economy.. that when the value of the homes suddenly goes down (a lot even), then you have a lot of people sitting in homes that are worth less than the mortgage they have taken out in it.
This intern means the banks have to start taking losses and when the snowball effects starts, then welcome to the financial crisis. This in tern again drives prices even more down since the market has become a buyers market not a sellers.. and if buyers cant get loans or are insecure about the future, then sellers are forced to lower prices even more and so on and so on. Add to the fact many loose their homes because of the crisis, and suddenly the market is flooded with homes for sale... which again drives prices down.. that is of course unless banks sit on homes and waiting for better times, which banks do. This of course is also dangerous as hell because when prices finally do stabilize and even go up, then if the banks start selling off the homes they have been sitting on, then suddenly the supply on the market is flooded yet again (if they are not careful), and that in tern yet again will drive down prices if you are not careful.
At some point the markets will get into a sort of equilibrium yet again, but that can take a considerable amount of time considering the time it took to get the peak in the first place.
And as long as the banks are sitting on hundreds of billions if not trillions of debt that they have no idea what the value is, and there is no incentive by regulators or even the markets to deal with it, then nothing will happen. Home prices can fall another 15% but if the banks wont loan people money to buy, then prices can easily fall even more.
So no amount of tax breaks, special programs from the government or wishful thinking can do anything about the problem since the core of the problem is yet again.... the banks and the last decade plus of excess of greed. Hell unemployment can go to 6% and growth to 5%, but as long as the banks refuse to loan money.. then well.
No there is more hurt on the way, but I believe we are at the start of the end of the tunnel (at least), both in the US and around the world when it comes to housing prices.