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.
I’ve been writing about these topics on my Moneywatch.com blog. You can join me there.
You might also find helpful information about the five pillars of personal finance at the Equifax Personal Finance Blog.