Now what?
That’s a pretty fair question to ask as the economic news gets darker with each passing day despite all efforts,thus far, from our government.
As a Reuters story says today, “consumer confidence plumbed historic lows in January and home prices fell at a record pace in November…”
Of course, a big reason remains the general unwillingness of banks to take all that taxpayer money they have received and step up their lending.
If you believe the “experts” (and, face it, who can nowadays?) the banks won’t continue lending till they can unload all that bad debt on their books and that is not likely to happen unless the government, in effect, nationalizes the banks in exchange for, in effect, wiping out all that bad stuff that has ground things to a halt for the most part.
Real estate remains the key, most believe, to helping resolve this financial crisis. But, that has not happened as yet.
What needs to be seen is whether recent decreases in mortgage rates have sparked some real life into the real estate market?
The answer appears to be, sort of. True, sales of homes that have been foreclosed upon have gone up of late…meaning those lucky enough to have both money and a really good credit score…were able to pick up some bargains.
But it is not nearly enough.
Home prices took yet another nose dive in November from the previous year…down a record 18.2 percent.
And, says Reuters, “prices in 20 metropolitan areas tracked by the Home Price Index fell 2.2 percent from October. Prices in 11 metro areas fell at record rates from a year earlier, while the drop in 14 citites was more than 10 percent below the year-earlier level.”
Of course, no one knows how this picture will change…if at all…once President Obama’s financial rescue plan passes Congress, in one form or another?
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Article Author:
Charles FeldmanCharles has written 147 articles for us.
Visit Charles's Website: http://www.thefeldmanblog.com
Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog.
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Charles Feldman
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What I have noticed is that as rates drop, there is a refi boom. Loan Officers are busy spending their time closing refis and Realtors are stuck hoping for buyers. I do not believe that rate alone is the answer to the probelm.
Thanks for the post – what we need to see is new policy regarding the housing market coming from Obama’s administration come into effect, but its not going to be a 1-2-3 process, time needs to be given, economy has been hit hard and its going to take allot to get out of the slump
Its definitely going to take a while for the economy to at least return to normality as its not a simple task to repair the damages done by the previous administration to not only the US but the world economy in general. All countries seem to be suffering and come 2010, there are hopes of recovery.