It is supposed to be–United we stand, divided we fall. But when it comes to our now divided federal government, only time will tell whether that axiom is true or false. And what of the real estate mess in the land? Will the Republican takeover of the House translate into higher home prices and the beginning of a new real estate boom?
As has always been the case since the Great Recession first took root and then rapidly spread around the globe, the answer to both questions is–jobs! Yep. That’s pretty much it. We long ago went through the subprime folks and have for some time now been dealing with homeowners (and former homeowners) who just can’t keep up with their mortgage payments because they either no longer have a job, or the job they do have no longer pays a good wage. In the case of small business owners, business has yet to return to anything like normal, leaving them just as vulnerable as employees.
The Obama administration’s plan for mortgage modification, by just about any measure, has been a bust.
The “un” and “under” employment rates nationwide remain high and the situation is many communites–and among many different groups of Americans- is still worse.
The Republicans claimed going into the midterm elections that their policies will do more to create jobs than Obama’s and the Democrats. Perhaps they will. But before anyone gets too worked up about this, one way or the other, keep in mind that the Democrats still control the Senate and a Democrat still resides in the White House.
In short, don’t expect radical change.
Without radical change, it seems unlikely that the employment picture is going to brighten much anytime soon. And, remember what I said at the outset: as long as people in this country are without jobs, real estate prices are not likely to bounce back in the near future.
Without a new –and more radical plan–to modify mortgages, foreclosures will probably continue at the current pace. That will serve to lower home prices even more.
The great thing about elections in this country is that candidates can–and do–say anything they want. Now that the election is over, the real test is to come: Will the president now have to compromise with the GOP? Will the Republicans want to compromise with the Democrats? Will this politically divided government somehow pull a rabbit out of its hat (some might argue the animal might be pulled from a different place?) and come up with real programs that will create real jobs that pay a real living wage that will give people real money to buy real homes and pay off real mortgages?
Until we start getting answers to these questions, do not expect a meaningful recovery in the real estate market anytime soon.
I realize that the market is not monolithic: that there are pockets of the country where prices might be bouncing back somewhat. But not in the key epicenters of the real estate fiasco: states such as Florida, Nevada, Arizona and California, to name but a few.
The fact is, these states have so many people ,until they start to experience a turn around, hopes for a nationwide real estate revival remain dim.