Monday, April 18, 2011

Less than Optimistic

http://www.msnbc.msn.com/id/42644103/ns/business-eye_on_the_economy/

http://www.oregonlive.com/business/index.ssf/2011/04/home_builders_sentiment_more_p.html

For reference a rating above 50 indicates a favorable outlook on home sales, below indicates a negative outlook.

This suggests that the outlook for housing is only getting worse. This does not bode well for those individuals hoping to have their home appreciate in value anytime soon. Home building is like a self-perpetuating cycle in that the reasons individuals don't buy homes (i.e. loss of job) increases the number of others who don't buy homes (very poor English).

What I am trying to say is that home building creates on average 3 jobs per house. By individuals not purchasing homes it is further preventing others from purchasing homes in terms of a new house not being built.

A good quote from one of the articles "
High unemployment, tighter lending standards and bigger requirements for down-payments are keeping many people from buying homes. A record number of foreclosures are forcing down home prices, leaving would-be buyers worried that the market has yet to bottom out."

Thoughts?

2 comments:

  1. I read some of the comment feed on the first article and it was interesting to see what people of different political affiliations projected were the best remedies for the recession in the housing market. One right-winger suggested "we implement business friendly, factory friendly, and oil producing friendly policies," and one more left-sided thinker stated "Why can't business/factory/oil be the "friendly" parties and invest in more jobs instead of outrageous payoffs for CEO's?"

    My assumption is that the recession will have to continue running its course for another few years, and that there is no single solution to boosting the housing market. If there is some way that the government can help improve the situation, it probably lies between party lines.

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  2. The decrease in home prices brought on by the foreclosure crisis will take a while to work itself out. These houses need to be flushed out of the market before any real appreciation can occur. While I understand the frustration, are tighter lending practices really all that bad? Loose practices are what got us into this mess in the first place. So, it stands to reason that if these practices were in place, the economy might have a much different look right now.

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