[quote=Nor-LA-SD-GUY2]
Something no one wants to hear but it’s the truth.
It’s So Simple,
Housing is 20% of the economy in most locals (not all but most)
Agents, escrow, insurance, finance , landscape, builders,… etc the list goes on.
YOU WILL NEVER HAVE AN ECONOMIC RECOVERY UNTIL THE MAJORITY OF UNDERWATER HOME OWNERS ARE NO LONGER UNDER WATER,
One way or the other..
[/quote]
I think you’re mostly right here, despite the hyperbole. We actually have had a small recovery, which is miraculous under the circumstances. But I think you’ve also jumped to the conclusion that if real estate hits bottom, then there will be a recovery. Not so fast. It’s not just real estate that drives so many local economies. It’s construction. The bottoming out of housing prices and reduction of inventory overhang by itself will not guarantee that construction picks up. (In the short term it will. Guaranteed. Because builders build. It’s what they do. Until they can’t sell what they build.)
For some local economies, it will. But others just don’t need any more housing. The country as a whole isn’t over-built for 18 months. It may be over-built for closer to 5 years. Some markets for a generation. And more construction in over-built locales will just put additional downward pressure on prices.
So I think you’re right, but maybe a bit too optomistic. Fixing the underwater homeowners, by itself, may not even help much.
The real recovery, including massive job creation, will have to come from somewhere else. Given the current political climate and the current corporate zeitgeist, I haven’t a clue where that would be.
