Every time I think the economy is rebounding, it seems to stall. And why? Because I think the average person is so afraid of being burned that they stop short and retreat after venturing back into the market or the mall. I'm not talking about professional investors. I'm talking about all those so called average people -- the ones we need to keep a healthy economy in motion.
Although there is somewhat of a rebound in economic activity, this recovery pales in comparison to recoveries of the past. If we ask why, we see the housing market with a huge overhang of distressed properties. The number of foreclosures in the pipeline coupled with the number of bank short sales will keep pressure on pricing ( which will hold down housing starts) for several years. It is not wonder that what confidence there is , is very fragile.I think we are in for a few years of weak confidence.
There is no doubt that the Bottom has fallen quite decisively out of US Housing.The more important question is -Are we at the bottom or is there further room to fall???
If you look at various proposals circulating through Congress today-I am afraid to say that the level of Support provided to Housing by the US Govt (through Direct and Indirect Subsidies) is about to fall drastically[Some of the Biggest Supporters of Housing as a means of Growth and prosperity in Congress have either been voted out or have have decided to move to the other side.
So with the Artifical Prop of Support offered by the Govt. out of the way.its now a question entirely of Demand and Supply.
And atleast for the next 5 years or so,there is way too much Supply and not enough Demand[As we see Consumers continue to Save and rebuild their Savings].
Also,Banks continue to tighten lending rules drastically.So no cheap/easy loans to right this ship either...
The Sandpaper approach(sliding up and down without decisive moves eitherways) is the best way to describe the US Housing market today.
When the financial crisis first hit, there was lots of talk about getting away from an economy based on consumerism and debt. Now that the economy and financial system have supposedly been "saved," that talk has died down ... And we're back to talking about consumer confidence. More proof that are economy is bound for a bigger day of reckoning than we've just had ... After the next bubbble around the corner perhaps.
I don’t think we have hit bottom on the housing market because the foreclosure inventory is still so high and not going anywhere fast. Once these are addressed and the job market rebounds I think housing will slowly come out of the abyss—it will be a long time till we are all seeing that housing growth that made everyone feel rich!
I agree, we definitely have not hit bottom yet. I see numerous houses empty in my neighbor, some of which are foreclosures and short sales. Meanwhile housing values continue at low levels with minimal growth and the unemployment rate remains high (9.5%, where I live). Unfortunately, I believe we will fall a bit more before we see the bottom.
Remodeling is picking up, and that's always a good sign. The National Association of Home Builders said today the remodeling index is back to the highest level since the fourth quarter of 2006. We're not out of the woods yet--the rate is still less than 50, which means more remodelers report market activity is lower (compared to the prior quarter) than report it is higher. But it's a sign of life anyway.
Remodeling is picking up, and that's always a good sign. The National Association of Home Builders said today the remodeling index is back to the highest level since the fourth quarter of 2006. We're not out of the woods yet--the rate is still less than 50, which means more remodelers report market activity is lower (compared to the prior quarter) than report it is higher. But it's a sign of life anyway.
Oh, I forgot to mention, guess what's holding people back from remodeling?
"many home owners are still slow to commit to remodeling due to feeling uncertain about the economic recovery and difficulty obtaining loans," said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP, a remodeler from Ft. Collins, Colo.
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