This chart tells the future

This chart tells us two things about the future.

First, that it takes about five to six years after a price slump before foreclosures hit the peak. During the last housing bubble, prices stopped increasing in 1990. However, foreclosures peaked in 1996.

Second, the peak will be a lot higher this time. California is just one year into the housing crash. However, foreclosures are fast approaching the horrendous peak recorded in 1996. In fact, the acceleration in foreclosures is nothing short of frightening.

Just push that graph out about a year, and foreclosures will easily exceed the levels recorded in 1996.