Will Markets Ever Really Recover?
By John Hines
It’s the million dollar question, and it’s a heated topic of conversation after years of turmoil in the nation’s housing markets — Will housing markets ever recover?
The question is talked about and debated around water coolers, business offices and even corporate board rooms and seems to have a constant flow of interest in forums on the Internet. The short answer is “Yes in some places, and not so much in others.”
Congress is working on dozens of regulatory overhaul provisions intended to better protect consumers in arrangements with banks and companies selling financial products, above all else mortgages. The House version of the bill has been approved, but won’t be voted on by the Senate until next year after its debated.
Racked by tricks and a record volume of securities sold on Wall Street to investors combined with the sale of billions of dollars of mortgages made to borrowers that could have destroyed the World economy, housing markets are trying to find stabilization.
The financial crisis that started as a way of raising all-time profits on Wall Street has delivered the most severe blow to the U.S. economy since the Great Depression. Bankers, loan agents, mortgage brokers, Wall Street traders, investors in securities and derivatives and in real estate made fortunes. And it all came at the expense of millions of every day citizens who either lost homes or properties as a result or are at risk of losing them.
As most of us now realize this crisis wasn’t started over night and it certainly isn’t going to come to an end quickly. Plans call for government programs to be expanded to provide more lending to businesses because the government is the only entity big enough and powerful enough financially to handle the magnitude of the crisis.
Housing Predictor is releasing its annual forecasts for more than 250 local markets, and as we issue the forecasts you’ll notice that some markets are projected to appreciate in 2010. With rock bottom prices Cleveland, Ohio in the center of the old rust belt and other markets in Ohio are forecast to experience housing inflation.
For Clevelanders’ it’s about time things are looking up, but many will ask whether the Cleveland market is just on a temporary bounce driven by more artificial government engineering. We think Cleveland housing prices went so low and things got so bad with a huge volume of foreclosures that Cleveland is near the bottom of its market and things are looking up going into 2010.
There are other places in Florida and other states that aren’t so fortunate. And still others in California showing strong indications that a bottom of the market is finally falling into place. Once the second most depressed economy in the country, West Virginia is looking at a healthier future. Oklahoma is holding up well. Michigan home sales are soaring. A turn around is setting up in Louisiana, and there are all sorts of other changes developing around the country.
However, never in the history of the U.S. economy have housing markets been under so much pressure because as a nation we have never experienced such a high volume of foreclosures. Congress and the Obama administration are making efforts to help, but without a full blown program to get lenders and the government to work together on the foreclosure crisis more housing markets will be in for a bumpy ride.
Will housing prices ever really recover then? — You might ask again. Yes, when the powers at be decide to take the bull by the horns and wrangle in the financial powers that got us into this mess. Will that ever happen? That’s really the million dollar question!