A lot of the apologetics claim the last downturn followed the massive aerospace layoffs. I don’t discount that, but when they say things are different this time around I agree. Different because this time the housing downturn is causing the job layoffs.
Think about it: realtors, brokers, appraisers, notaries, contractors, plumbers, builders, carpenters, electricians, roofers, just in the immediate path. Then you’ve got supply houses, materials warehouses, the companies that supply them, all the way to the retail chains of Lowes, Depot, Sears even Wal-mart. On the financial side you have the mortgage specialists, MBS traders, investors, PMI companies, and banks galore.
Foreclosures are just now hitting the scene. What’s going to happen when they make it all the way up the food chain?
The economy will survive, but I think prices are going to be hit harder than most people expect. The jobs that helped people barely afford an overpriced house are getting hit as a result of the bust.
