I understand that the country voted for change in November, but is this really what we had in mind? It's seems like we now have a government that has completely lost it's mind and is running amok, spending hundreds billions, probably trillions, of dollars with no real idea of whether any of this spending will make a dime's worth of difference to solve our current economic woes.
We get corporate bailouts followed by "stimulus" plans that nobody read, followed by mortgage bailouts, and every time one is announced the stock market plummets, 401Ks get smaller and the public confidence goes down.
As this because we feel the government needs to "do something" even if that something makes the situation worse not better. Has anyone ever considered that sometimes there are events in our lives that are just too big for the government to stop?
If a hurricane were heading toward us, would we start clamoring for the government to "do something" to stop the hurricane? Of course not. Why? The hurricane is something too large for the government to do anything about. If it were to try all the resources used to try and stop it would be wasted. The government can warn us it is coming, tell us to get out of the way, help clean up the mess after it has passed and even help us rebuild. But stop it? Impossible.
Has anyone ever considered that we may be in the midst of an economic and financial hurricane that is simply too big and too powerful for the government to stop? Has anyone considered that all the money (debt) being used to try to stop it is simply being wasted and we will have nothing to show for it but the debt payments?
As a real estate broker, times are tough and we all hope things improve soon. But it's hard to see that doubling down on the irresponsible policies of the previous administration is the way out. I am personally tired of listening to all the chatter about what the economists say. In my opinion, economists are nothing more that a modern version of the court astrologist.
What would seem to work is common sense. If too much risk, too much debt an too much spending got us into this mess, then less risk, less debt and less spending would get us out. Since the lunatics in the government are doing the exact opposite, it's hard to be confident. God help us all.
Saturday, February 21, 2009
Saturday, February 7, 2009
2009 Starts Where 2008 Left Off
With a new year comes the hope of some good news, especially when it comes to the Monmouth County housing market. Sadly, this year has picked up where last year left off.
I would like to report that the January sales figures showed improvement from a year ago, but sadly, that is not the case. Hard is it is to believe the market continues to grow weaker, sales continue to decline and prices continue to fall.
There is a bit of a new wrinkle to January's sales figures. Last year the condo market some more strength, although you could hardly describe it as strong, than the single family market. The reverse now seems to be the case. In December 2008 and now in January 2009, the closings for condominiums plummeted. Condo closing in January 2009 were almost 60% fewer than for January 2008. The end result of this is that January ended with almost 27 months of standing condominium inventory. Remember, six months of inventory is considered a level that leads to stable prices. Twenty seven months can only mean one thing, look for condo prices to get hit hard in the the early part of the year.
The single family market continues to weaken, just not a dramatically. Closings reported for single family homes were off about 23% in January this year when compared against January last year. Keep in mind, sales of single family homes were off about 22% in 2008, so the latest figures give no indication that the market is bottoming out. Standing inventory for single family homes in January was just over 22 months. You know what that means for prices, down they go.
So far the incredible amounts of money that the government has thrown at the problem has had not visible effect. The focus continues to be on the supply side of the equation, but that would not appear to be where the problem lies. Right now there are only slightly more homes for sale around the county than there were in 2006. So why is there so much pressure on prices? Sales have plummeted.
If our government wants to approve things, they needs to focus on the demand side of the problem. Until there is a greater appetite for real estate, the situation will continue to be bad. I have to admit, as a veteran of 30 years in this business, I am getting tired of reporting the same distressing news month after month. I would like to be able to say there is a light at the end of the tunnel, even if it is a freight train coming straight at us. But there is no light, in fact we may not even be in a tunnel.
Hopefully things will improve soon. The government is about to pass the largest single expenditure legislation in the history of the world. Perhaps that will help. If it doesn't, watch out!
I would like to report that the January sales figures showed improvement from a year ago, but sadly, that is not the case. Hard is it is to believe the market continues to grow weaker, sales continue to decline and prices continue to fall.
There is a bit of a new wrinkle to January's sales figures. Last year the condo market some more strength, although you could hardly describe it as strong, than the single family market. The reverse now seems to be the case. In December 2008 and now in January 2009, the closings for condominiums plummeted. Condo closing in January 2009 were almost 60% fewer than for January 2008. The end result of this is that January ended with almost 27 months of standing condominium inventory. Remember, six months of inventory is considered a level that leads to stable prices. Twenty seven months can only mean one thing, look for condo prices to get hit hard in the the early part of the year.
The single family market continues to weaken, just not a dramatically. Closings reported for single family homes were off about 23% in January this year when compared against January last year. Keep in mind, sales of single family homes were off about 22% in 2008, so the latest figures give no indication that the market is bottoming out. Standing inventory for single family homes in January was just over 22 months. You know what that means for prices, down they go.
So far the incredible amounts of money that the government has thrown at the problem has had not visible effect. The focus continues to be on the supply side of the equation, but that would not appear to be where the problem lies. Right now there are only slightly more homes for sale around the county than there were in 2006. So why is there so much pressure on prices? Sales have plummeted.
If our government wants to approve things, they needs to focus on the demand side of the problem. Until there is a greater appetite for real estate, the situation will continue to be bad. I have to admit, as a veteran of 30 years in this business, I am getting tired of reporting the same distressing news month after month. I would like to be able to say there is a light at the end of the tunnel, even if it is a freight train coming straight at us. But there is no light, in fact we may not even be in a tunnel.
Hopefully things will improve soon. The government is about to pass the largest single expenditure legislation in the history of the world. Perhaps that will help. If it doesn't, watch out!
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