Well, it’s official: The Great Recession started in 2007 and ended in 2009, but over a year later Americans, not to mention much of the world, are still trying to recover from its profound effects. Curiously, retail receipts for the most recent holiday shopping season seem to be the most robust in all of three years, even as the housing market keeps tumbling in value. These are two of the biggest indicators economists use to gauge the state of affairs, and taken together their mixed message seems to faithfully reflect the uncertainty all around.
Despite the record profits, there is a hiring freeze throughout Corporate America. Interest rates are incredibly low but credit lines remain tight. To be sure, it’s understandable why few are willing to lend – or even borrow – money in this economic climate. But it’s a vicious cycle, and no one wants to be the first to try to break it.
Only twenty-one thousand homes were sold nationwide this past November, a record low for just one month. Yet bargains abound – foreclosure sales, short sales, auction sales vie with all the deep discounts being offered throughout the industry, even in traditionally hot property markets such as the New York-New Jesery-Connecticut Tri-State Area.
Not even industry insiders like Isaac Toussie are disturbed by, where price declines seem to discourage sales!
The situation is much, much worse in cities such as Cleveland, Minneapolis, and even Dallas, darlings of the 1990s.
Ultimately, nothing will change on the real estate front without dramatic improvements where jobs are concerned. Yet with no strong sustained positives in real estate – which account for new purchases of durable goods – what chance will there be for the outlook on jobs?
Something’s gotta give.
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