Betting on the Economy
Many economists think that The Great Recession started in 2007 and ended in 2009, though well over two years later people around the world are still suffering from the aftermath. Believe it or not, the retail sector has reported the best earnings in all of three years for the holiday shopping season just past, yet houses continue to lose value. These are two of the biggest indicators economists use to gauge the state of affairs, and taken together their mixed message seems to faithfully reflect the uncertainty all around.
Despite the record profits, there is a hiring freeze throughout Corporate America. Credit is tight despite extremely low interest rates. Of course, who gives out hundreds of dollars right now – or, even, take it on – with all the uncertainty? It’s quite a conundrum, since nobody wants to take those crucial first steps that somebody will have to eventually – a great many somebodys, actually.
Only twenty-one thousand homes were sold nationwide this past November, a record low for just one month. Yet bargains abound – foreclosure sales, short sales, auction sales vie with all the deep discounts being offered throughout the industry, even in traditionally hot property markets such as the New York-New Jesery-Connecticut Tri-State Area.
Not even industry insiders like Isaac Toussie are disturbed by, where price declines seem to discourage sales!
The situation is much, much worse in cities such as Cleveland, Minneapolis, and even Dallas, darlings of the 1990s.
Whatever the case wherever it may be, an improvement will depend on one thing: jobs. Yet with no strong sustained positives in real estate – which account for new purchases of durable goods – what chance will there be for the outlook on jobs?
Something’s gotta give.