Real Estate Depression
A real estate depression makes it difficult for real estate professionals to make a living
It’s time to enjoy the last few days of summer – if you’re not looking for a job or facing foreclosure. And, if you know you’re facing tough times, it’s hard to enjoy the last few days of summer. So many Americans are looking for a job (16.5 million, conservatively), or are facing foreclosure (as many as 10 percent of all homeowners).
This morning, NeighborWorks America announced it has counseled one million homeowners facing foreclosure since 2008.
RealtyTrac announced foreclosures are up 4 percent, and it’s looking likely that 4 million Americans will face foreclosure this year. Mortgage interest rates are at 60-year lows and yet fewer people can qualify for a refinance, thanks to sinking property values and credit issues.
This week, one of the Federal Reserve Board governors told the New York Times that the country is in a strange middle ground, somewhere between a weak recovery and falling off a cliff. I’ve been feeling for awhile that trouble lies just below the surface of the so-called recovery. It’s an election year and the economy feels very dicey.
Some things are better. But for anyone connected with the real estate industry, it’s not. Let’s call it what it is, folks, a real estate depression: New construction is down 75 to 80 percent, home buyer demand has fallen 40 to 50 percent since the end of the home buyer tax credits, the Fed is going to start buying back its own debt, and mortgage interest rates continue to fall, reflecting what most folks feel is going on in the world economy.
Trust me – if world investors had a better place to put their money, they wouldn’t be buying Treasuries.
Take a deep breath – and let’s hope the folks in DC start coming up with a few more innovative ideas for job creation.
Please leave your comment here, and be sure to tune into this Sunday’s Ilyce Glink Show on WSB. We’ll pick up the conversation then and update the numbers of the week.
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I’ve got an idea for our government bail out guru, next time you want to bail out a bank tell them you get 1,000.00 for every mortgage you fix or refinance, I bet it won’t take two years to hear back from my bank on making home affordable
You know, Bob, I think they tried it – and apparently, $1,000 to fix or refinance a mortgage didn’t seem to be sweet enough. Then they upped it further. Still, not much has happened. And, I’d like to point out that Fannie and Freddie were NOT supposed to get that money until loan mods were finalized and what I’m starting to hear is that they were getting cash all along for pouring folks into trial loan mods. It’s an absolute irresponsible disaster and I can’t imagine what anyone in the Obama administration is thinking. What a nightmare! Thanks for your comment.
I think you’re starting to see the big picture. You still related to it through the focus of your career. You see it as a real estate depression, when in reality it is just a depression. All sectors of the economy have a high amount of “slack” – retail sales numbers are falling, car sales are falling, etc.
Until system issue are resolved in our economic system, our path will continue downward. Trade tariffs need to be renegotiated if we are to preserve any manufacturing in the United States.
The trade policies of the past 30 years have been the single largest destroyer of the American middle class. Without the middle class, the professional class will see its ranks thinned as many businesses that depended on middle class income fail.
Some of the problems are the results of an aging demographic, this cannot be changed, but it can be mitigated by proper economic policies.
The first thing to do in an emergency, is to realize it is an emergency, either the government is blind or incompetent, in either case the results are the same. A failure to act in any meaningful way, and to keep pretending we are in a recovery, when clearly we are not.
We as a nation have been here before and have survived, but it will take leadership and ideas, both of which are in very short supply currently in our nation. Our government is intellectually bankrupt and morally and financially corrupt.
Nothing gets better until something changes and apparently nobody in Washington or Wall Street wants to change the status quo.
I probably do see this as a “real estate-driven” depression, but definitely the real estate sector is in a depression. No question about it. You might be interested in today’s show notes that I’ve just posted (for August 15, 2010) because I delve further into the word “modest” which is now being used to describe the so-called recovery. I don’t think either political party has the guts to change things. Which is a very terrifying place for the electorate to be. Thanks for your comments.