35 Reasons Why You Should Move Away From California

Wouldn’t it be wonderful if there was a “reboot” button for an entire state?  Because the truth is that if an entire state ever needed to completely start over it is the state of California.  At this point it has become the epicenter for just about everything that is wrong with America, and each year it just keeps coming up with new ways to become an even worse cesspool of social decay and depravity.  Millions of people have already left the state, and millions more are thinking of leaving.  One recent survey found that 47 percent of all Californians are thinking about moving out of the state in the next five years, and a different survey discovered that 53 percent of those currently living in the state would like to leave.  If about half the people in your state are seriously considering leaving, it is safe to say that things have gone horribly wrong.  But instead of changing course, those running California continue taking the state down a very self-destructive path.

It is such a shame, because California should be one of the greatest places in the world to live.  The weather is wonderful most of the year, the state still possesses extraordinary natural beauty, and the tech industry provides plenty of high paying jobs.

When I was growing up, millions of young Americans dreamed of moving there and living “the California dream”, and when I was a young man I seriously explored the possibility of moving there myself.

And the truth is that a lot of great things have come out of the state.  The following comes from a recent article by Ann Coulter

In the last century, every great thing started in California: surfing, jeans, Disneyland, tax revolts, McDonald’s, movies, car culture, the Grateful Dead, right on red turns, Merle Haggard, skateboarding, Apple computer, and the last two elected Republican presidents not named “Bush.”

But now I don’t know why anyone would want to live there.

If you currently live in California, I am about to tell you a whole bunch of reasons why you should leave.  In fact, if I could get everybody to leave the state, I would.

However, if you feel specifically called to stay, then that is what you should do.  Without a doubt, light is needed the most where things are the darkest, and California needs as much light as it can get right now.

Unfortunately, I believe that it is too late for the state as a whole.  It is headed for a date with destiny, and most of the nearly 40 million people that live there have absolutely no idea what is coming.

If you live in the state and you do not know what you should do, I would get out while you still can.  The following are 35 reasons why you should move away from California…

1. Incredibly high taxes.  At this point, California has the highest marginal tax rate in the entire country.

2. Absurd housing costs.

3. The median home value in the state is now more than half a million dollars, and that is about twice as high as the national average.

4. It has been estimated that it now takes approximately $350,000 a year to live a middle class lifestyle in the city of San Francisco.

5. Endless wildfires.

6. Epic mudslides.

7. Horrific traffic jams.

8. Los Angeles has the worst traffic congestion in the entire world.

9. The education system is awful.

10. Medical tyranny.

11. One of the highest poverty levels in the United States.

12. Thousands of drug addicts are literally pooping in the streets.

13. Almost half of all the homeless people in the entire nation live in California.

14. The state is literally being overrun by millions of rats.

15. Los Angeles has been ranked as the second most rat-infested city in the country.

16. At this point things are so bad that even Los Angeles City Hall is being overrun by rats.

17. Illegal immigration is out of control, and the sanctuary cities in California are making things even worse.

18. Rising gang activity.

19. High crime rates.

20. There is now a law in California that protects shoplifters.  So for those that enjoy shoplifting, this might actually be a reason to move into the state.

21. The drug war that has been raging in Mexico is increasingly spilling across the border.

22. California has been ranked as the worst state in the nation to do business year after year.

23. California is also one of the most litigious states in the entire country.

24. The once pristine beaches in the state are now being “completely overrun with fecal bacteria”.

25. Nancy Pelosi.

26. Kamala Harris.

27. Governor Gavin Newsom.

28. The lieutenant governor, the attorney general, the secretary of state and the state treasurer are all Democrats.

29. Democrats make up nearly two-thirds of the California State Senate.

30. Democrats make up more than two-thirds of the California State Assembly.

31. Both of the U.S. senators and 46 out of the 53 members of the House of Representatives that California sends to Washington are Democrats.

32. Much of the population is openly hostile to those that identify as conservatives.

33. California has been on the cutting edge of America’s moral decay for decades.

34. There have been more than 100,000 earthquakes in the state so far this year.

35. One day the “Big One” will hit California, and the geography of the state will be dramatically altered.  The devastation will be unlike anything we have ever witnessed, and the death toll will be unimaginable.

If Donald Trump wins the next presidential election, there is a group of activists in California that plan to get a “Calexit” referendum on the ballot for the following election.

Those activists don’t want to be part of a country that would elect Trump two times, because they consider their values to be completely and utterly incompatible with Trump’s values.

But what is happening in this nation is far bigger than just Trump.

To me, it would be wonderful if the rest of the nation decided that their values were completely and utterly incompatible with California’s values.  We desperately need to turn America around, and the way to do that is to head in a completely opposite direction from the way that California is going.

Sadly, it does not appear that is going to happen.  California may be racing ahead of most of the rest of the country, but our final destination will be the same.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

It Is Time To Go: Over Half Of All California Voters “Have Considered Leaving The State”

Why in the world does anyone still want to live in California?  Great weather and good paying jobs are the two biggest positives that residents often point out, but the high cost of living and the absolutely ridiculous housing prices often eat up all of the extra money that Californians think that they are making.  In fact, it was recently reported that it now takes approximately $350,000 a year to live a middle class lifestyle in the city of San Francisco.  If you have a ton of money, it can partially insulate you from the problems that are increasingly ravaging the state, but unless you never go out in public nothing is going to insulate you completely.  Cities all over the state are degenerating into drug-infested, crime-ridden hellholes that are literally being overrun by millions of rats.  California has some of the worst traffic in the entire world, unchecked illegal immigration is causing a whole host of social problems, and gang activity has become a massive problem.  On top of everything else, California is being constantly hit by wildfires, mudslides, earthquakes and other natural disasters.  In fact, scientists tell us that it is just a matter of time before “the Big One” hits, and that is probably one of the best reasons to leave California while you still can and never look back.

Yes, there are some California residents that continue to insist that it is a great place to live.

But if California is so wonderful, why have more than half of all California voters “considered leaving the state”?  The following comes from the Los Angeles Times

Just over half of California’s registered voters have considered leaving the state, with soaring housing costs cited as the most common reason for wanting to move, according to a new poll.

Young voters were especially likely to cite unaffordable housing as a reason for leaving, according to the latest latest UC Berkeley Institute of Governmental Studies poll conducted for the Los Angeles Times. But a different group, conservatives, also frequently suggested they wanted to leave — and for a very different reason: They feel alienated from the state’s political culture.

With the way the state is being run, conservatives have been moving out of California in large numbers for years.  In fact, I have a number of really good friends that left the state for political reasons and will never return.

On the other hand, California’s reputation for handing out free goodies has been a magnet for another class of people.  Today, almost half of all homeless people in the entire nation live in the state of California, and this has become such a huge crisis that it literally makes headlines all over the globe.

For example, the following comes from an article in a British news source

Cali Carlisle admits she is a heroin addict — ‘but in a healthy way,’ she insists, even if the visual evidence belies that claim.

Her nose is the brightest shade of red imaginable. She constantly picks at scabs all over her body. Her home is a makeshift bed beneath Interstate 80 in Sacramento.

And Monday was her 26th birthday. Not that you would ever guess. Anyone looking at her would think she is at least 15 years older.

This is the cold, hard reality of the glorious drug lifestyle that so many go to California to experience.

Every year, thousands upon thousands of young people that once had bright futures ahead of them end up on the streets, in prison or dead due to this raging epidemic.

And one of the places where it is the worst is in the capital of the state itself.  Not too long ago, a salon owner in Sacramento made headlines all over the nation when her rant about homelessness on social media went viral

“I just want to tell you what happens when I get to work,” stated Liz Novak, a local salon owner, to the media about what she’s had to deal with trying to conduct business in Sacramento.

“I have to clean up the poop and the pee off of my doorstep. I have to clean-up the syringes. I have to politely ask the people who I care for – I care for these people that are homeless – to move their tents out of the way of the door to my business.”

She ultimately had to move her salon completely because it became clear that things were not going to get better any time soon.

In the state of California today, virtually everything has been defiled.

At one time, California was teeming with natural beauty.  But today the entire state has become a trash dumpster, and that includes California’s once pristine beaches.  Just check out what Dr. Drew Pinsky recently told Laura Ingraham

“There is an organization out here called Heal the Bay which keeps tabs on safety of our beaches in Southern California, from Orange County to Ventura. Since the rains last Winter, [Heal the Bay] has been giving our beaches C’s to F’s, and F means completely overrun with fecal bacteria. What comes with that are other things like syringes, Hepatitis A and other infectious diseases.”

On top of everything else, seismic activity is a constant threat.

There have been more than 1,500 earthquakes in California and Nevada over the past 7 days, and these days that is considered to be a slow week.

Of course most of the earthquakes are very small, but scientists assure us that one of these days “the Big One” will hit the state.  When that day arrives, the geography of the state will be radically changed, and the death and destruction will be off the charts.

We live at a time when our planet is being greatly shaken, and many believe that what we have seen so far is just the beginning.

The coastline of the state of California lies directly along the infamous “Ring of Fire”, and scientists have been persistently warning us that the San Andreas fault is “locked and loaded” and could possibly “unzip all at once”.

It is such a shame what has happened to the state.  California should be one of the most beautiful, prosperous and enjoyable places to live in the entire world.  Unfortunately, Californians have been making exceedingly poor choices for decades, and the consequences of those decisions will be extremely bitter indeed.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time. Of course the most important thing that we can share with people is the gospel of Jesus Christ, and if you would like to learn more about how you can become a Christian I would encourage you to read this article.

California Nightmare: Over Half Of The People Living In The State Wish They Could Leave

This just shows what can happen when you let crazy people run a state for several decades.  In the 1960s and 1970s, the possibility of moving to the west coast was “the California dream” for millions of young Americans, but now “the California dream” has turned into “the California nightmare”.  According to a brand new survey, 53 percent of those living in California are considering leaving the state, and there are certainly lots of reasons to hit the road and never look back.  The cities are massively overcrowded, California has the worst traffic in the western world, drug use and illegal immigration both fuel an astounding amount of crime, tax rates are horrendous and many of the state politicians appear to literally be insane.  And on top of all that, let us not forget the earthquakes, wildfires and landslides that are constantly making headlines all over the world.  Last year was the worst year for wildfires in California history, and these days it seems like the state is hit by some new crisis every few weeks.

But none of those factors are the primary reason why so many people are eager to leave.

According to a brand new survey by Edelman Intelligence, the main reason why so many are considering leaving the state is the high cost of living

A growing number of Californians are contemplating moving from the state — and not due to wildfires or earthquakes but the sky-high cost of living, according to a survey released Wednesday.

The online survey, conducted last month by Edelman Intelligence, found that 53 percent of Californians surveyed are considering fleeing, representing a jump over the 49 percent polled a year ago. The desire to exit the nation’s most populous state was highest among millennials, the survey noted.

Thanks to absolutely ridiculous construction restrictions, it has become increasingly difficult to build new housing units in the state.  But meanwhile, people from all over the world continue to move there because they are attracted by what they see on television.

As a result, the supply of housing has not kept up with demand, and prices have shot through the roof in recent years.  The following numbers come from CNBC

Statewide, the median home value in California was $547,400 at the end of 2018, while the U.S. median home value was $223,900. By comparison, the median home value in New York state stood at $289,000 and $681,500 in New York City; New Jersey was $324,700.

Yes, there are a lot of good paying jobs in California, but you better have a really, really good job to be able to afford mortgage payments on a home worth half a million dollars.

Of course many Californians find themselves greatly stretched financially by out of control housing costs, and so more of them than ever are moving in with roommates.  In fact, one recent report found that the number of married couples in the U.S. that are living with roommates “has doubled since 1995”

The number of married couples living with roommates has doubled since 1995, according to a recent report from real estate site Trulia. About 280,000 married people now live with a roommate — and that’s particularly true in pricey cities like those on the West Coast.

The reason: Housing costs a ton. In Honolulu and Orange Country, Calif., the share of married couples with roommates is between four and five times the national rate. San Francisco, Los Angeles, San Diego and Seattle also have sky high rates of married couples with roomies. Those same cities all have well above average rental and housing costs (Trulia notes that housing costs in all these markets have risen more than 30% since 2009), with residents of uber-pricey San Francisco requiring more than $123,000 in income to live comfortably, one study showed.

In addition to housing costs, many Californians are greatly frustrated by the oppressive levels of taxation in the state.

At this point, the state has the highest marginal tax rate in the entire country

At 12.3 percent, California led the 50 states in 2018 with the highest top marginal tax rate, according to the Federation of Tax Administrators. And that doesn’t include an additional 1-percent surcharge for those Californians with incomes of $1 million or more.

Ouch.

But at least the weather is nice.

Yesterday, I wrote an article entitled “Rats, Public Defecation And Open Drug Use: Our Major Western Cities Are Becoming Uninhabitable Hellholes”, and it sparked something of a firestorm.  More than 1000 comments have already been posted on that article, and a few hearty individuals actually tried to convince the rest of us that life on the west coast is not actually all that bad.

I’m sorry, but if your city has far more intravenous drug users than it does high school students, that is not somewhere that I would want to raise a family

According to a report from the Chronicle, San Francisco now has more intravenous drug users than high school students. San Francisco, which operates 15 high schools, currently has 16,000 students enrolled grades nine through twelve.

By comparison, the northern California city currently has 24,500 “injection drug users.” That is approximately 8,500 more drug users than high school students.

As I mentioned yesterday, the city of San Francisco gave out 5.8 million free syringes to drug users last year.

When you have such widespread drug use, people are going to commit a lot of crime and they are going to do some really weird things.  Just consider the following example

Authorities are searching for a man seen on security footage licking the doorbell of a California home and relieving himself in the family’s yard.

Police have identified the man as Roberto Arroyo, 33, and say that he spent three hours around the Salinas home of Sylvia and Dave Dungan.

The couple had been out of town, during the strange incident, but their children were sleep inside the family’s home. They noticed something amiss when they woke up to multiple alerts from their surveillance system, which notifies the homeowners whenever there is movement near the front door.

A lot of really good people used to live in California, but they left because of stupid stuff like this.

In fact, quite a few of my best friends are people that have moved out of the state within the last 10 years.

Over the past decade we have seen a mass exodus out of California.  And according to Kristin Tate, the author of a new book entitled “How Do I Tax Thee?: A Field Guide to the Great American Rip-Off“, the “upper-middle class” has been moving out of the state faster than anyone else…

The largest socioeconomic segment moving from California is the upper-middle class. The state is home to some of the most burdensome taxes and regulations in the nation. Meanwhile, its social engineering — from green energy to wealth redistribution — have made many working families poorer. As California begins its long decline, the influx outward is picking up in earnest.

Overall, approximately 5 million people have packed up and permanently moved out of California within the last 10 years.

Unfortunately, the entire nation is slowly becoming just like California, and if we don’t turn things around eventually there will be no place left to go.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Stocks Plunge, Consumer Pessimism Grows And U.S. Home Sales Just Hit Their Lowest Level In 3 Years

It appears to be more likely than ever that the U.S. economy is heading for a recession.  On Tuesday, the Dow Jones Industrial Average was down 301 points as investors were rattled by several very important pieces of news.  Back in 2008, home sales began to fall precipitously just prior to the financial crisis in the second half of that year, and now it is happening again.  Of course home sales are always going up and down, but the numbers that we are seeing now are definitely very unusual.  According to the National Association of Realtors, existing home sales just hit their lowest level in 3 years

U.S. home sales tumbled to their lowest level in three years last month and house price increases slowed sharply, suggesting a further loss of momentum in the housing market.

The National Association of Realtors said on Tuesday existing home sales declined 6.4 percent to a seasonally adjusted annual rate of 4.99 million units last month — the lowest level since November 2015.

And when you compare December 2018 to December 2017, the numbers look even worse.  According to Wolf Richter, last month existing home sales were down 10.3 percent on a year over year basis…

Sales of “existing homes” — including single-family houses, townhouses, condos, and co-ops — in December, plunged 10.3% from a year earlier, to a seasonally adjusted annual rate (SAAR) of 4.99 million homes, according to the National Association of Realtors this morning. This was the biggest year-over-year drop since May 2011, during the throes of Housing Bust 1

Those are absolutely horrible numbers, but thanks to high interest rates they aren’t going to get much better any time soon.  Just like a decade ago, this is going to be a very tough time to be in the real estate industry.

During the “boom years”, the west was the hottest region for real estate in the entire nation, but now it is leading the way down.  And last month was just abysmal, with sales falling 15 percent in that portion of the country…

  • Northeast: -6.8%, to an annual rate of 690,000.
  • Midwest: -10.5%, to an annual rate of 1.19 million.
  • South: -5.4%, to an annual rate of 2.09 million.
  • West: -15.0%, to an annual rate of 1.02 million.

Unfortunately, these are exactly the kinds of numbers that we would expect to see if the U.S. economy was heading into a recession.

Investors were also rattled on Tuesday by news that trade talks between the U.S. and China seem to be breaking down

Stocks fell to their lows of the day after the Financial Times reported the U.S. canceled a trade meeting with Chinese officials. CNBC later confirmed the report through a source. White House economic advisor Larry Kudlow denied the reports, saying the meetings are not canceled, giving stocks a boost into the close. China and the U.S. are trying to strike a permanent trade deal with the U.S. Both countries have been in a trade war since last year, slapping tariffs on billions of dollars worth of their goods.

We’ll see what happens, but the Chinese appear to be dragging their feet, and it does not look like there will be a major trade agreement between the two sides any time soon.

And when you throw in the fact that we are in the midst of the longest government shutdown in all of U.S. history, it becomes exceedingly clear that the elements for a “perfect storm” are definitely coming together.

In fact, Peter Schiff is entirely convinced that the coming recession is already “a done deal”…

“And they think simply because the Federal Reserve is no longer hiking rates that they no longer have to worry about the Fed pushing the economy into a recession. Well, it’s too late for that. The rate hikes of the past have already guaranteed that the economy is headed for recession. It doesn’t matter whether they continue to raise rates in the future. The recession is a done deal. It’s just now you have that calm between the storm while investors are still clueless and haven’t yet connected those, what should be, very obvious dots.

When the next recession comes, you will know who to blame.  Every time the Federal Reserve has engaged in a rate hiking program since World War II, it has always ended in either a recession or a stock market crash.  The Fed is the reason why the U.S. economy has been on a roller coaster ride for decades, and now we are steamrolling directly toward the “bust” portion of this cycle.  If we ever want to end this madness, we need to abolish the Fed, and that means that we need to send people to Congress that are willing to take action on these things.

Sadly, it is probably going to take a major collapse before abolishing the Fed becomes a big political issue again.  Economic issues have been on the back burner for a while, but that may be about to change, because pessimism about the economy is growing.  According to Gallup, the percentage of Americans that believe economic conditions are worsening has risen by 12 points over the past two months…

Americans are not feeling very confident about the economy these days.

Almost half (48%) of Americans say economic conditions are worsening, up from 45% in December and 36% in November, according to a recent poll by Gallup, a Washington, D.C.-based research and consulting firm.

This is more evidence of the national psychological shift that I have been talking about.  People are starting to realize what is happening, and they are becoming deeply concerned about what the future holds.

Well, the truth is that things are going to get a lot tougher.  But instead of getting down in the dumps about it, we need to prepare for what is ahead, and we need to be ready to implement some positive solutions in the aftermath of the coming crisis.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters.  His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News.  From there, his articles are republished on dozens of other prominent websites all over the nation.  If you would like to republish his articles, please feel free to do so.  The more people that see this information the better, and we need to wake more people up while there is still time.

 

Much Worse Than Expected: Experts Shocked As New Home Sales Plunge 8.9 Percent

The U.S. economy is definitely deviating from the script, and we just got more evidence that “Housing Bubble 2” is bursting.  Experts were expecting that new home sales in the U.S. would rise in October, but instead they plunged 8.9 percent.  That number is far worse than anyone was projecting, and many in the real estate industry are really starting to freak out.  And to be honest, things look like they are going to get even worse in 2019.  One survey found that the percentage of Americans that plan to buy a home over the next 12 months has fallen by about half during the past year.  Mortgage rates have steadily risen as the Federal Reserve has been hiking interest rates, and at this point most average Americans have been completely priced out of the market.  Home prices are going to have to come way down from where they are right now, and just as we witnessed in 2008, rapidly falling home prices can put an extraordinary amount of stress on the financial system.

It is hard for me to put into words just how bad this latest number is.  Even though I write about our growing economic problems on a daily basis, even I didn’t expect to see a number anywhere near this bad.  Sometimes a really bad number from one part of the U.S. can drag down the overall number, but that wasn’t the case this time.  According to Reuters, there were “sharp declines in all four regions”…

Sales of new U.S. single-family homes tumbled to a more than 2-1/2-year low in October amid sharp declines in all four regions, further evidence that higher mortgage rates were hurting the housing market.

The Commerce Department said on Wednesday new home sales dropped 8.9 percent to a seasonally adjusted annual rate of 544,000 units last month. That was the lowest level since March 2016. The percent drop was the biggest since December 2017.

But of course it isn’t as if this latest report is coming out of nowhere.  The truth is that new home sales have fallen in four of the last six months, and so a very clear trend is now developing.

Sadly, most mainstream economists still don’t seem to be understanding what is happening.  According to Reuters, the consensus estimate was that we would see new home sales rise 3.7 percent in October, and so an 8.9 percent plunge came as a real shock.

New home sales have now missed expectations for seven months in a row, and the similarities to 2008 are starting to become undeniable.

Sales of previously owned homes have been falling as well.  In fact, in October we witnessed the largest drop for previously owned home sales in four years

Sales of previously owned U.S. homes posted their largest annual decline since 2014 in October, as the housing market continues to sputter due to higher mortgage rates that are reducing home affordability.

If you want to blame someone for this mess, blame the Federal Reserve.

They created a “boom” in the housing market by pushing interest rates all the way to the floor during the Obama years, and now they are creating a “bust” by aggressively jacking up interest rates at a pace that our economy simply cannot handle.

If we had allowed the free market to be setting interest rates all this time, we would not be on such a roller coaster ride.

Just like during “Housing Bubble 1”, millions of Americans have been buying houses that they cannot afford, and that could mean another massive wave of mortgage defaults as this new economic downturn intensifies.  At this point, the debt to income ratio for mortgages insured by the FHA is at an all-time record high

One worrying indicator: The average debt-to-income ratio for mortgages insured by the Federal Housing Administration, which makes up about 22% of the housing market, is now at its highest level ever.

This is yet another indication that we are even more vulnerable than we were just prior to the subprime mortgage meltdown during the last financial crisis.

Let me try to shed some light on what is coming next.  Even if economic conditions remained stable, housing prices would need to start falling dramatically in order to attract buyers.  In fact, we are already starting to see this happen in southern California and other markets that were once extremely “hot”.  As housing prices fall, millions of Americans will suddenly find themselves “underwater” on their mortgages.  In other words, they will owe more on their homes than their homes are worth.  During the last recession, many “underwater” homeowners ultimately decided to walk away rather than continue to service ridiculously bloated mortgages.

But the truth is that economic conditions are not likely to remain stable.  In fact, many are projecting that the approaching downturn will be even worse than 2008.

In such a scenario, millions of Americans will lose their jobs, and that means that millions of Americans will suddenly not be able to make their mortgage payments.  As a result, mortgage defaults will skyrocket and home prices will drop like a rock.  Just like last time around, there could be people that wake up one day and realize that they owe two or three times as much money on their mortgages as their homes are currently worth, and the stampede of people walking away from “underwater” mortgages could become an avalanche.

Needless to say, millions of mortgages suddenly going bad is a scenario that our financial system is not equipped to handle.  What happened in 2008 was absolutely catastrophic for our large financial institutions, and what is coming is going to be even worse.

Of course the big financial institutions will want the federal government to bail them out, but there may not be much of an appetite for more corporate bailouts this time around.

And considering the fact that we are already 22 trillion dollars in debt, we can’t exactly afford to be throwing money around.

The Federal Reserve has set the stage for a giant mess, and it is going to shake the housing industry to the core.

We should have learned from the mistakes that we made in 2008, but we didn’t, and so now we are going to pay a very great price for our negligence.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

 

In California, Home Sales Are Plunging Like It Is 2008 All Over Again

What goes up must eventually come down.  For years, the California housing market was on the cutting edge of “Housing Bubble 2” as we witnessed home prices in the state soar to absolutely absurd levels.  In fact, it got so bad that a burned down house in Silicon Valley sold for $900,000 earlier this year, and a condemned home in Fremont sold for $1.2 million.  But now things have changed in a major way.  The hottest real estate markets in the entire country led the way down during the collapse of “Housing Bubble 1”, and now it looks like the same thing is going to be true for the sequel.

According to CNBC, the number of new and existing homes sold in southern California was down 18 percent in September compared to a year ago…

The number of new and existing houses and condominiums sold during the month plummeted nearly 18 percent compared with September 2017, according to CoreLogic. That was the slowest September pace since 2007, when the national housing and mortgage crisis was hitting.

Sales have been falling on an annual basis for much of this year, but this was the biggest annual drop for any month in almost eight years. It was also more than twice the annual drop seen in August.

Those numbers are staggering.

And it is interesting to note that sales of new homes are being hit even harder than sales of existing homes…

Sales of newly built homes are suffering more than sales of existing homes, likely because fewer are being built compared with historical production levels. Newly built homes also come at a price premium. Sales of newly built homes were 47 percent below the September average dating back to 1988, while sales of existing homes were 22 percent below their long-term average.

At one time, San Diego County was a blazing hot real estate market, but now the market has turned completely around.

In fact, the county just registered the fewest number of home sales in a month since the last financial crisis

A combination of rapid mortgage rate increases and decreased affordability, San Diego County home sales collapsed 17.5% to the lowest level in 11 years last month, in the first meaningful sign that one of the country’s hottest real estate markets could be at a turning point, real estate tracker CoreLogic reported Tuesday.

In September, 2,942 homes were sold in the county, down from 3,568 sales last year. This was the lowest number of sales for the month since the start of the financial crisis when 2,152 sold in September 2007.

And it can be argued that things are plunging even more rapidly in northern California.

In the San Francisco Bay area, sales of new and existing homes were down 19 percent in September on a year over year basis…

Home sales in the San Francisco Bay area have been falling for months, but in September buyers pulled back in an even bigger way.

Sales of both new and existing homes plunged nearly 19 percent compared with September 2017, according to CoreLogic. It marked the slowest September sales pace since 2007 and twice the annual drop seen in August.

If a new real estate crisis is really happening, these are precisely the kinds of numbers that we would expect to see.  If you still need some more convincing, here are even more distressing numbers from the California real estate market that Mish Shedlock recently shared

  • The California housing market posted its largest year-over-year sales decline since March 2014 and remained below the 400,000-level sales benchmark for the second consecutive month in September, indicating that the market is slowing as many potential buyers put their homeownership plans on hold.
  • Existing, single-family home sales totaled 382,550 in September on a seasonally adjusted annualized rate, down 4.3 percent from August and down 12.4 percent from September 2017.
  • September’s statewide median home price was $578,850, down 2.9 percent from August but up 4.2 percent from September 2017.
  • Statewide active listings rose for the sixth consecutive month, increasing 20.4 percent from the previous year.
  • Inventory reached the highest level in 31 months, with the Unsold Inventory Index reaching 4.2 months in September.
  • September year-to-date sales were down 3.3 percent.

Of course a similar thing is happening on the east coast as well.  At this point, things have cooled off so much in New York City that it is being called “a buyer’s market”

New York City’s pricey real estate has become a “buyers market,” new data suggests, characterized by lowball offers and a rise in the number of properties staying on the market for longer.

The latest figures from Warburg Realty show that among higher-priced homes, New York City is in the throes of a “major shift” that reflects a cooling market, the likes of which hasn’t been seen in almost a decade.

“Offers 20 percent and 25 percent below asking prices began to flow in, a phenomenon last seen in 2009,” wrote Warburg Realty founder and CEO Frederick W. Peters in the report, which surveys real estate conditions around the city.

In the final analysis, it is no mystery how we got to this point.

During the Obama era, the Federal Reserve pushed interest rates all the way to the floor for years, and this caused “Housing Bubble 2” to become even larger than the original housing bubble.

Now the Federal Reserve has been aggressively raising interest rates, and this is now busting the bubble that they created in the first place.

So if you want to blame someone for this mess, blame the Federal Reserve.  The Federal Reserve has created huge “booms” and “busts” ever since it was created in 1913, and hopefully the American people will be outraged enough following this next “bust” to start calling for real change.

I have been calling for the abolition of the Federal Reserve for years, and there are many others out there that also want to return to a free market financial system.

History has shown that free markets work exceedingly well once you take the shackles off, and as a nation we desperately need to return to the values and principles that this nation was founded upon.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

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Evidence The Housing Bubble Is Bursting?: “Home Sellers Are Slashing Prices At The Highest Rate In At Least Eight Years”

The housing market indicated that a crisis was coming in 2008.  Is the same thing happening once again in 2018?  For several years, the housing market has been one of the bright spots for the U.S. economy.  Home prices, especially in the hottest markets on the east and west coasts, had been soaring.  But now that has completely changed, and home sellers are cutting prices at a pace that we have not seen since the last recession.  In case you are wondering, this is definitely a major red flag for the economy.  According to CNBC, home sellers are “slashing prices at the highest rate in at least eight years”…

After three years of soaring home prices, the heat is coming off the U.S. housing market. Home sellers are slashing prices at the highest rate in at least eight years, especially in the West, where the price gains were hottest.

It is quite interesting that prices are being cut fastest in the markets that were once the hottest, because that is exactly what happened during the subprime mortgage meltdown in 2008 too.

In a previous article, I documented the fact that experts were warning that “the U.S. housing market looks headed for its worst slowdown in years”, but even I was stunned by how bad these new numbers are.

According to Redfin, more than one out of every four homes for sale in America had a price drop within the most recent four week period…

In the four weeks ended Sept. 16, more than one-quarter of the homes listed for sale had a price drop, according to Redfin, a real estate brokerage. That is the highest level since the company began tracking the metric in 2010. Redfin defines a price drop as a reduction in the list price of more than 1 percent and less than 50 percent.

That is absolutely crazy.

I have never even heard of a number anywhere close to that in a 30 day period.

Of course the reason why prices are being dropped is because homes are not selling.  The supply of homes available for sale is shooting up, and that is good news for buyers but really bad news for sellers.

It could be argued that home prices needed to come down because they had gotten ridiculously high in recent months, and I don’t think that there are too many people that would argue with that.

But is this just an “adjustment”, or is this the beginning of another crisis for the housing market?

Just like a decade ago, millions of American families have really stretched themselves financially to get into homes that they really can’t afford.  If a new economic downturn results in large numbers of Americans losing their jobs, we are once again going to see mortgage defaults rise to stunning heights.

We live at a time when the middle class is shrinking and most families are barely making it from month to month.  The cost of living is steadily rising, but paychecks are not, and that is resulting in a huge middle class squeeze.  I really like how my good friend MN Gordon made this point in his most recent article

The general burden of the American worker is the daily task of squaring the difference between the booming economy reported by the government bureaus and the dreary economy reported in their biweekly paychecks. There is sound reason to believe that this task, this burden of the American worker, has been reduced to some sort of practical joke. An exhausting game of chase the wild goose.

How is it that the economy’s been growing for nearly a decade straight, but the average worker’s seen no meaningful increase in their income? Have workers really been sprinting in place this entire time? How did they end up in this ridiculous situation?

The fact is, for the American worker, America’s brand of a centrally planned economy doesn’t pay. The dual impediments of fake money and regulatory madness apply exactions which cannot be overcome. There are claims to the fruits of one’s labors long before they’ve been earned.

The economy, in other words, has been rigged. The value that workers produce flows to Washington and Wall Street, where it’s siphoned off and misallocated to the cadre of officials, cronies, and big bankers. What’s left is spent to merely keep the lights on, the car running, and food upon the table.

And unfortunately, things are likely to only go downhill from here.

The trade war is really starting to take a toll on the global economy, and it continues to escalate.  Back during the Great Depression we faced a similar scenario, and we would be wise to learn from history.  In a recent post, Robert Wenzel shared a quote from Dr. Benjamin M. Anderson that was pulled from his book entitled “Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946”

[T]here came another folly of government intervention in 1930 transcending all the rest in significance. In a world staggering under a load of international debt which could be carried only if countries under pressure could produce goods and export them to their creditors, we, the great creditor nation of the world, with tariffs already far too high, raised our tariffs again. The Hawley-Smoot Tariff Act of June 1930 was the crowning folly of the who period from 1920 to 1933….

Protectionism ran wild all over the world.  Markets were cut off.  Trade lines were narrowed.  Unemployment in the export industries all over the world grew with great rapidity, and the prices of export commodities, notably farm commodities in the United States, dropped with ominous rapidity….

The dangers of this measure were so well understood in financial circles that, up to the very last, the New York financial district retained hope the President Hoover would veto the tariff bill.  But late on Sunday, June 15, it was announced that he would sign the bill. This was headline news Monday morning. The stock market broke twelve points in the New York Time averages that day and the industrials broke nearly twenty points. The market, not the President, was right.

Even though the stock market has been booming, everything else appears to indicate that the U.S. economy is slowing down.

If home prices continue to fall precipitously, that is going to put even more pressure on the system, and it won’t be too long before we reach a breaking point.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

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