Housing Market Cooldown

In what has been seen as the hallmark of the recent economic recovery, the housing market that has exploded over the last three years is showing signs of cooling off.

Today, with regards to the New York housing market, the New York Times had this to say -

"More sellers are putting their homes on the market, houses are selling less quickly and prices are no longer increasing as rapidly as they were in the spring, according to local data and interviews with brokers." and "In Manhattan, the average sales price fell almost 13% in the third quarter."

Back on August 29 I stated that I believed the following would happen:

3. A moderate to severe US economic collapse that would lead to further calls for 'free trade' and globalization. (I.E. - The American Union)

With regards to point #3, I see several things that are extremely troubling -

Now I don't believe that it takes a genius to figure out that the housing market will at least temporarily collapse, but I am going several steps further here. I am on record predicting that this will lead to something, specifically a call to globalize the western hemisphere into a 'competitive market', the new American Union. I have also heard rumors that this will come complete with a brand new currency, the Amero.

The Real Effect
I believe that this will spread in this country gradually at first, but as the pinch of natural gas prices (40% higher in Wisconsin) combined with still increasing gasoline prices begin to strip Americans free cash, we will begin to see many people selling off properties in an attempt to capitalize on unrealistically high housing prices. After all, if you can't afford to heat one house, can you afford to heat two?

I strongly believe this will lead to a panicked sell-a-thon which will flood the market with overpriced housing, driving the prices down to at least pre-bubble levels. This will leave many holding large outstanding debts as much of their investment's value plummets.


Edited for appearance and labels on 4/13/2010.